John Hempton has been blogging for some time about the ability of big U.S. banks to muddle through their current problems and recapitalize via earnings. He put up two posts in the last two days that pulls a lot of his earlier writings together. If you want a blueprint for how the financial crisis is likely to play out read them.
The approach the administration has evidently adopted to solve the financial wreck is pretty much the same that Hempton has been suggesting for some time. Note, however, that his solution only works for very large banks. You don't have to go too far down the food chain to run into seizure as the only solution for troubled banks. That means there are going to be a lot more community bank failures before this is over.