Be afraid. Be very afraid.

Be afraid; be very afraid. The credit crisis is now spreading like financial Black Death. As the property market tanks, companies like Edinburgh-based Scottish Equitable have rushed to help their investors by refusing to let them take out their money - it’s in their best interests after all - while Equitable continue to charge fees.

Fear is stalking the stock markets again as new hideous creature emerge from the sub-prime slime. Latest addition to the banking bestiary are the monolines, curious financial organisms that normally hide from the light of day.

Monolines are insurance companies that insure bonds held by banks and governments against default. But the problem is that they have too little money to meet the defaults of the sub-prime based bonds they insure. They are haemorrhaging cash and some of the biggest ones may not survive.

Which means even more trouble for stricken banks like Northern Rock. The government has been unable to get anyone to insure Rock bonds and no one seems to wants to take on the bank’s debts. Except the public - which is why nationalisation has emerged as the most favoured outcome, advocated by the Economist and the Financial Times. But it would be the biggest nationalisation since Rolls Royce in 1971, and Gordon Brown is desperate to avoid it.

Nationalisation of the Rock could make Gordon the proud owner of the one of the biggest portfolios of sub-prime loans in Britain. What would the government do if the property market continues to fall, and lots of Northern Rock mortgage holders default like in America? Would he foreclose? Throw thousands out of their homes?

To avoid this nightmare, the government is now proposing to nationalise Northern Rock’s debts, but not its assets. Under plans which will be unveiled next week, the government is reportedly offering to sell Northern Rock to anyone who'll take it, without asking for the public’s money back - at least not for many years. This is what Sir Humphrey would call a “courageous move”. It would effectively mean the government was underwriting a private company - probably Richard Branson's Virgin - and that the new owners would have a gun to its head.

If the EU allows it the ploy would at least keep some of Northern Rock’s liabilities off the government balance sheet. The British public have already put £25bn into Northern Rock, and guaranteed another £27bn of Rock assets. Under nationalisation, these would all become part of government borrowing. This financial black hole could make British Leyland and the old coal in dustry look like great business opportunities.

And the economy is clearly going downhill fast. Debt-ridden consumers can’t spend, no one wants to buy property any more and the banks are losing billions every day. Even the company that owns Postman Pat is in trouble. Hang on to your cats; it’s every man for himself.