Government May Buy Ownership Stakes in Banks

We now have the worst credit crisis since the Great Depression on our hands. How did it get this bad? The long and the short of it is greed. However, banks' poor decisions on sub-prime loans certainly played a part. Personally, I feel that the banks are in such bad shape that the government will have to buy shares of the banks to prevent a complete collapse. Can you imagine what would happen if the banking system fails? It would be unimaginable. Certainly another depression would follow.

An administration official, who of course spoke on the condition of anonymity, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to inject fresh capital into financial institutions and get ownership shares in return. This official said all the new powers granted in the legislation were being considered as the administration seeks to deal with a serious credit crisis that has caused the biggest upheavals on Wall Street in seven decades and continues to roil global markets.

So we are left with either a total collapse by the banks or the government owning them. I don't like either option, but the latter might be the lesser of two evils.