About a month ago I wrote an article that outlined What Happened to Bank of America?

The Nationalization of Banks and the Continued Deterioration of the Financial System…

Update: Here we are, a month later and the strain on Bank of America and Citi is so great that the nationalization of these two major financial institutions is of great concern to equity holders, who would be wiped out by a government takeover.

Earlier in the week, you had Alan Greenspan, the former fed chief who is seen as a spokesman for laissez faire capitalism suggest that it may be in the country’s best interest to nationalize these institutions. Even Republican Senator Lindsey Graham of South Carolina stated as much on ABC’s “This Week”. There are legit positives of a temporary government takeover. The government would be directly in charge of lending money to credit worthy applicants which would help get money flowing through the economy and relieve some of the strain from the credit crisis.

So Sean Hannity and Glenn Beck, are these guys socialists as well in cahoots with the Obama Administration?!

On Friday , the administration came out to try to calm the markets down over this worry. “This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government,” White House press secretary Robert Gibbs said

Bank of America shares closed Friday down 3.56% to $3.79, while Citi shares fell 22.31% to $1.95.

Will it happen? Do you think it is a good idea, or a dangerous, slippery slope for American Capitalism?