Most American economists and the big end of Wall Street are ignoring the increasing failure rate among American banks, such is their desire to glimpse the bottom of the recession.

On Friday, five small local banks failed across the US; four were shut, one was sold off in the bloodiest day in US banking for years. That took this year’s total bank closures to 45, up from 25 in all of 2008 and just three in 2007. More banks have failed so far this year than in the last three years in the US, and 2009 is on track for well over 100 failures.

Using the cheap money provided by the Fed (0.25% cost), the JPMorgans, Goldman Sachs and Morgan Stanley are off hiring staff, paying big salaries, playing the markets, funding hedge funds and generally acting as if the December quarter and their near death experiences didn’t happen. For Bank of America and Citigroup, times are not as carefree, but they safe from collapse at their own hands.