Via Naked Capitalism, we get this mind-boggling article from the Telegraph:

A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees.

It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.

…

Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country’s top four banks - Christiania Bank and Fokus - were seized by force majeure.

“We were determined not to get caught in the game we’ve seen with Bear Stearns where shareholders make money out of the rescue,” said one Norwegian adviser.

“The law was amended so that we could take 100% control of any bank where its equity had fallen below zero. Shareholders were left with nothing. It was very controversial,” he said.

Yes, that’s right, the n-word: the Fed is thinking about nationalizing certain failing banks. If Martin Wolf didn’t shake you awake, this news ought to. We’re talking about America here, where nationalized anything is anathema. If the Fed has contingency plans for doing just that, we know we’re in deep shit. Like in way past our waists.