While I can’t claim this is fact, I would bet it’s hard to find a presidential inauguration day probably since the Great Depression–and maybe not even then–when the Dow dropped so steeply–and, in fact, as I just glanced back at The Wall Street Journal, the newspaper says that the 332-point drop yesterday was the worst performance ever for the stock market on inauguration day. Inauguration Day is usually a time of optimism and American celebration (ok, so 2001 was not that much of a happy day). But, it really shows how difficult a time we are in.

   And part of the mess is this:

Shares of the biggest names in American banking plunged Tuesday as some investors feared that the government would need to nationalize the most deeply wounded financial institutions, wiping out stockholders.

   And…

Shares of U.S. banks were down about 20% to their lowest level in more than a decade. Shares of Citigroup Inc. fell 20%, to $2.80 a share. Bank of America Corp. shares were down 29%, to $5.10. The low-single-digit prices of Citigroup and Bank of America shares are a sign that investors are deeply worried about the viability of the industry, from the largest national banks to smaller regional players. (Please see articles on pages C1 and C2.)

Shares of State Street Corp. fell 59% on Tuesday after the normally staid bank reported nearly $9 billion in unrealized losses. The decline of State Street shares was worrisome because the bank is considered low-risk and plays a crucial role managing cash for big companies and investors. State Street, which remains profitable, said the losses came from declines in its investment portfolio and its exposure to investment vehicles that issue asset-backed securities.

   I’m sympathetic, somewhat, to shareholders. But, I also think tough luck: if we have to nationalize banks–not a bad thing at all–to make sure that average people get loans and small businesses can function, let’s get on with it.