I, personally, still don't think this recession will be particularly "bad", but it will be painful, if only because this recession will expose just how hollow the American economy has become and how fragile our prosperity is.
For a rundown on the state of (formerly) American Banking, nothing compares to http://calculatedrisk.blogspot.com/ I won't cite a particular post, but there are several there right now that will sober anyone up. BofA in Fed-sponsored negotiations to acquire bankrupt Countrywide is a good rumor as I write this -- that BofA is negotiating is confirmed fact, but the Federal Reserve sweetening the deal with guarantees is the rumor. If we are that desperate, we are desperate.
The list of leading American banks going abroad for major ($5 and $10 billion) equity investments is also scary news. The American banking system is being sold off. The impetus is pending end-of-quarter and end-of-year financial statements. Without the additional capital in place,
This is a very big deal. And, of course, perfect storm material, if there ever was any.