What does it say about the banking system when the world's savviest investor through one of the best insurance companies stops insuring deposits?

The subsidiary, Kansas Bankers Surety Co., is notifying about 1,500 banks in more than 30 states that it will no longer offer a program called "bank deposit guaranty bonds." KBS is an 18-employee subsidiary of Berkshire Hathaway, according to the parent firm's 2007 annual report. It is one of a handful of firms that offer such insurance, a big selling point for banks trying to attract wealthy customers.

Two people briefed on the matter said the order was made Monday by Mr. Buffett, Berkshire Hathaway's chief executive. Chuck Towle, a senior vice president at KBS, declined to comment on why his firm was leaving the business. "We have decided to do so," he said. "We'll work with each individual bank and work it out with them."

I keep getting asked whether or not its time to buy the banks.  Eleven banks have been shuttered so far.  Estimates of eventual bank closings are as high as 200.  Given that we are just at the beginning of this process, I am avoiding the banks.