Nationalization Nervousness

Today's -1%+ market decline was atttibuted to increased fear of bank nationalizations. Will shareholders of America's banks wake up tomorrow to find their shares completely worthless because they have been seized by the government? I think not. As bad as the credit crisis has become, nationalization is probably not the best answer. There is a way to help stem the crisis without resorting to such draconian measures. A temporary suspension of fair value accounting rules would buy time for the banks to sort out some of their problems. If assets do not have to be immediately written down to levels that represent a worst case scenario, the banks would not have to raise capital in the current environment. This would allow some breathing room for the banks and time for the economy to improve. Opponents of the suspension of FAS 157 point to the need for transparency. I for one, would rather preserve capitalism than transparancy at this particular time.