The government's list of troubled banks hit its highest level since 1992 during the second quarter, although the pace of growth continued to slow, according to a government report released Tuesday.

The number of banks at risk of failing rose by almost 7% to reach 829, the Federal Deposit Insurance Corporation said in its quarterly survey of the nation's banking system.

Over the past year, several articles have appeared exactly like this one, and the math never seems to make sense. Does that imply that people are withholding information? Or are the numbers that large that a few billion here or there doesn’t make a difference? I beg to differ about a few billion missing.

The collapse of the housing market, and the increase in mortgage delinquencies and home foreclosures, coupled with the credit crisis have all led to a dramatic increase in bank failures over the past few years. When banks fail, the FDIC is appointed as receiver. Depositors are protected up to the FDIC insurance limit.

Are the markets discounting a V-shaped recovery? Or does the evidence suggest this is still a bear market rally akin to those of the 1930s and 1970s? Editor Justice Litle answers this and more ...