For all the talk of distress in 2009, we certainly didn't seemany deals transpire. Yet there are high expectations that tradeswill begin to ramp up and some of the pent-up capital waiting totake advantage of the distressed market will see some play. Thatcould lead to a better sense of valuations, though there is stillspeculation as to whether we've hit bottom.

One thing that is certain is the coming year will bring us onestep closer to working through the glut of troubled assets. As forwhat factors will shape that resolution, many industry observerssuggest investors pay close attention to the Federal DepositInsurance Corp., special servicing, asset valuation, REITs and thegovernment's plethora of programs.

It's an understatement to say the FDIC had a very active year in2009. With an estimated ISO failed banks by press time, the agencyhas been seizing assets and moving them through auctions and othernote sales. At the end of Q3 2009, the FDIC insured $S.3 trillionin bank deposits with an $8.2-billion deficit, says Linus Wilson, afinance professor at the University of Louisiana at Lafayette.