Nationalization is inevitable—and sooner rather than later.

That according to the Financial Times’s New York banking reporter Francesco Guerrera. I like that the paper’s editors let a news reporter use his accumulated knowledge to write a column like this.

Guerrera goes so far to say Bank of America and Citigroup are “likely” to be nationalized. Anybody want to take the other side of that bet? I didn’t think so, but it’s a measure of how false the old conventions of journalism force us to be that this piece seems edgy—Murrow-like even.

The game is up: within the next few weeks, if not days, the US government will have to step in and nationalise one or more banks.

The likely candidates to the dubious honour of being owned by Washington Inc can be found at the end of a sad trail of credit losses, management mishaps and share price collapses.

Come on down, Citigroup, Bank of America and a motley crew of regional and community banks.

I especially like this part:

Why am I so sure? Because, as the US banking guy for the Financial Times, for the past year I have had a ringside seat to the demise of the global banking sector.

The destructive blend of ineptitude, myopia and greed that led to the crisis has made it impossible for piecemeal solutions to work.

When commentators warn that a failure by the latest US rescue plan would lead to a “Japanisation” of the financial sector, they are missing the point. It is too late to worry about banks turning into “zombies” – they already are.

Yes. The real problem here is that almost no individual thinks that these banks aren’t insolvent. It’s the system that’s in denaial—seemingly incapable, like Japan in the 1990’s of admitting the obvious and swallowing hard and paying the price. Far from bringing needed “change,” Obama, by selecting the insider Geithner as Treasury Secretary, has bought into these toxic beliefs. Here’s Guerrera trying to shake us out of it:

Crushed under a pile of toxic assets, paralysed by wafer-thin balance sheets and deserted by fearful investors, once-mighty institutions such as Citi and BofA are barely able to perform basic functions such as lending and underwriting.

In fact, the only reason they have not joined Lehman Brothers, Bear Stearns and Washington Mutual on the financial scrapheap is that taxpayers have propped them up with more than $500bn in cash injections and guarantees.

The kicker:

Banks will not like it – and Citi, for one, is already agitating for yet another bail-out without nationalisation. But as the financial chain comes under unprecedented strain, the time has come to take out its weakest links.

Righto! Applaud the FT for giving Guerrera the freedom to, you know, tell the truth—and make a call.