<div>I heard a joke on Radio Australia about the USSA (United Socialist States of America), regarding the nationalizing of US banks now under way:</div>
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<div><a href="http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/10/11/MNP413EVF4.DTL">http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/10/11/MNP413EVF4.DTL</a></div>
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<div><strong>(10-11) 04:00 PDT Washington -</strong> -- Treasury Secretary Henry Paulson, acting with finance ministers from the Group of Seven industrialized nations, Friday said the government will buy direct stakes in banks to stem a global financial collapse, as it became clear that his original $700 billion rescue, passed by Congress just last week, was not working.</div>
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<div>"The current situation calls for urgent and exceptional action," said the G-7 ministers, which include Paulson's counterparts in Japan, Germany, Britain, France, Italy and Canada. They outlined a five-point plan that also would insure all deposits and use "all available tools to support systemically important financial institutions and prevent their failure."</div>
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<p>The ministers will meet this weekend and markets will be expecting flesh to be added to the still-vague plan. Still, for the United States, the action would be the first time the government has bought stakes in banks since the Great Depression. The G-7's aim is to coordinate a much more powerful global intervention to stem the banking panic and forestall a deep economic contraction.</p>
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<div>The government would end up partially owning some banks that are unable to muster private investors. Others, Paulson said, would be allowed to fail. It will take weeks after the emergency intervention to sort out which banks can be saved, how the taxpayer stakes will be structured, and with what strings attached. </div>
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<div>"They have no choice," said an economist at a major government institution not permitted to speak on the record, but who has analyzed the banking problem for more than a year. "You're about to have a generalized depositor run. They have to come in and recapitalize the banks and guarantee all deposits."</div>
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<div>Vision2020 Post: Ted Moffett</div>