Will Stocks Ever Recover?

In the article "Worries Over Banks Keep Pulling Stock Markets Back", author Jack Healy touches on the scary possibility of the nationalization of banks, or government controlled banking. This is very disturbing to many, but Wall Street relaxed somewhat with the Obama administration's reassurance that they still strongly believe in a privately held banking system. That is, with proper regulation from the government. All three major markets took major hits and finished low. The misery isn't just confined to the US. Markets from eastern Europe and Asia suffered as well, due to investors fears that government controlled banks would essentially wipe out shareholders. Senator Christopher J. Dodd, Chairman of the Senate Banking Committee, had this to say about the current situation: “I don’t welcome that at all, but I could see how it’s possible it may happen,” Mr. Dodd said. “I’m concerned that we may end up having to do that, at least for a short time.” Banks are short on cash and don't have the cash to lend. There is no solution, and time is just making it worse.

The nationalization of banks is indeed a scary prospect. While it may seem necessary right now, even a good idea, it's a little too close to socialism to suit many. Government control of banks to socialism is probably stretching it a little bit, but it is still a slippery slope. This country was founded on the belief of capitalism and free trade, and one would wonder what the founding fathers would think if they saw the mess that we are in now.

Personally, I feel that limited government regulation of banks is a necessary evil in today's volatile market. We have to stop the bleeding at some point. I think that bad lending practices and bad management coupled with immeasurable greed have sent the economy into this spiral. More government regulation could have possibly prevented this situation, or at least lessened the blow the economy took. Let's just hope the bailout works and things take a turn for the better, SOON.