Just don\u2019t call it \u201cnationalization.\u201d The Bush administration is reported to be considering taking equity stakes in some high-profile U.S. banks as its next measure to contain the global credit crisis. The decision, which is still up in the air, would not require new legislation, but would instead derive from powers already granted by the Emergency Economic Stabilization Act of 2008. Nationalization in fact is rearing its head overseas. Earlier today, facing what its prime minister called the prospect of \u201cnational bankruptcy,\u201d Iceland suspended trading on its stock exchange for two days, and the island nation\u2019s Financial Services Authority took control of the third of the country\u2019s leading banks, Kaupthing, the largest. Under emergency powers granted by Iceland\u2019s parliament earlier this week, the government will also create a new bank to hold most of the domestic assets of Landsbanki, one of the three banks in receivership. In an unexpected ripple from the situation, the United Kingdom used anti-terrorism laws to freeze some of Landsbanki\u2019s assets. About 300,000 Britons hold accounts with Landsbanki\u2019s online arm, and the U.K. has threatened to sue Iceland to recover any lost deposits. The two countries are financially tied in other ways also. Fueled by the boom of the \u201990s, Iceland\u2019s financial sector grew enormously, to where it now has assets estimated at nine times the nation\u2019s $19 billion GDP. Kaupthing alone contributed more than $5.25 billion to financing deals in the U.K. over that past five years. The news in at least one other country was substantially better. In Italy, Finance Minister Giulio Tremonti told the parliament today that the country\u2019s banks are sound and that the national government will step in as needed to prevent any of them are seriously struggling. Following three days of declines, shares in UniCredit SpA, Italy\u2019s biggest bank by assets, climbed more than 9 percent from an 11-year low. Yesterday, Italian Prime Minister Silvio Berlusconi pledged that \u201cNo Italian bank will fail.\u201d Even as everyone eyes the financial crisis\u2019 overseas ripples, more attention is being paid to a report released at the end of September by the non-profit Center on Budget and Policy Priorities that ranked the states that are facing the worst budget shortfalls. The most vulnerable 10 states (for once, the Rust Belt gets off relatively lightly): 1) California: 22 percent of its total budget, or $22.2 billion 2) Arizona: 19.9 percent of its total budget, or $2 billion 3) Florida: 19.9 percent of its total budget, or $5.1 billion 4) Nevada: 16 percent of its total budget, or $1.2 billion 5) Rhode Island: 13.1 percent of its total budget, or $430 million 6) New York: 9.8 percent of its total budget, or $5.5 billion 7) Alabama: 9.5 percent of its total budget, or $784 million 8) Georgia: 8.7 percent of its total budget, or $1.8 billion 9) New Jersey: 7.7 percent of its total budget, or $2.5 billion 10) Maryland: 7.2 percent of its total budget, or $1.1 billion Finally, as the world\u2019s finance ministers and its titans of commerce are racing the clock to rescue the global financial system from a 1929-style mess, a different clock is already outdated and struggling to keep up. The National Debt Clock in New York\u2019s Times Square ran out of digits, and its operator, the Durst Organization, has temporarily dropped the dollar sign to make room for a U.S. national debt that, thanks to federal bailouts in connection with the financial crisis, now exceeds $10 trillion. The Durst Organization, perhaps best known as the developers of the Bank of America Tower now under construction at One Bryant Park in Manhattan, will reportedly replace the current clock some time next year with one that will accommodate figures up to $1 quadrillion. Let\u2019s hope we don\u2019t need it.<\/p>\n","protected":false},"excerpt":{"rendered":"
Just don\u2019t call it \u201cnationalization.\u201d The Bush administration is reported to be considering taking equity stakes in some high-profile U.S. banks as its next measure to contain the global credit crisis. The decision, which is still up in the air, would not require new legislation, but would instead derive from powers already granted by the…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003872732","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n