Meanwhile, we’re seeing more and more institutions become traditional banks. Next up on the list is credit card giant American Express (AXP), which can now accept deposits and permanently access financing from the Fed, reports Martin Crutsinger for the Associated Press. If more companies start making these moves, perhaps there will be greater restrictions on how this Fed money can be spent.

The money should be used to free up lending, but many of these institutions are using it to pay off debt, pay bonuses and buy other banks. Many hope that President-Elect Barack Obama can come in and fix this mess, but who knows what it’s going to look like two months from now when he finally takes office?

Financial Select Sector SPDR (XLF) is down 51% for the year and iShares S&P Global Financial Index Fund (IXG) is down 50.6% for the year.