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A person familiar with the situation told Dow Jones Newswires that the government is considering a total bailout plan of €300 billion to €400 billion ($402 billion to $536 billion), which includes state guarantees and the option to get a direct stake in banks. As part of this, the government is mulling recapitalizing financial institutions by injecting €50 billion to €100 billion in capital, the person who declined to be named said.

“These figures are currently being discussed but there is no final decision yet and everything is still in flow,” the person said. The Cabinet is expected to debate the rescue plan on Monday.

The shop at the Austrian Mint usually specialises in selling collectors’ coins. But these days, a number of customers are buying bullion there – in bulk.

I saw one middle-aged couple handing over thousands of euros in cash, in exchange for dozens of 1oz Vienna Philharmonic gold coins.

A little later, a Viennese pensioner took a thick wad of 500-euro notes out of her handbag, and gave it to the sales assistant. He sold her a large gold bar, which looked as though it weighed a kilo.

“I have taken one piece of gold,” she told me.

Then his daughter drove him to jail. Grandpa had time to do.

His crime? He had disobeyed a court order that he sod the lawn at his Beacon Woods home.

His bail? Zero.

Prudente, 66, must stay in the Pasco County jail in Land O’Lakes until the required sod work is completed, under a September court order signed by Circuit Judge W. Lowell Bray.

“He’s in prison for God knows how long because we can’t afford to sod the lawn,” said his sobbing daughter, Jennifer Lehr.

Prudente has owned a home in the deed restricted community since 1998. The covenants require homeowners to keep their lawns covered with grass.

Earlier this year, the Beacon Woods Civic Association took Prudente to court after he failed to install new sod on his browning lawn, which had withered after his sprinklers broke. The association had already sent letters telling him to resod his front and back yards by certain dates.

In an interview at the jail Friday evening, Prudente said he thought he had made a good financial hardship case to the association: His adjustable rate mortgage went up an extra $600 a month. Wachovia repossessed his Toyota Scion. His daughter and her two young children, who had fallen on hard times, moved in with him and his wife, Pat.

“To me, keeping the house is more important than the grass,” said Prudente, a retired registered nurse from New York. “I just ignored them.”

He ignored them, too, after the association filed a complaint in court. He ignored a court order in May, signed by Bray, giving Prudente 30 days to sod the yard.

In June, the court also awarded the association $795 in fees, which included a $645 attorney’s fees and a $150 fee for “an expert witness.”

By September, there was still no sod. Bray found Prudente in contempt of court, but said in his order that Prudente could “purge himself of this contempt” by doing the required work within the next 30 days. That time expired Friday.

“It is clear to the Court that the ability to avoid incarceration is well within the Defendant’s grasp,” Bray wrote.

Representatives of the Beacon Woods association expressed regret Prudente had landed in jail. But they said it was his own fault.

“It’s a sad situation,” said board president Bob Ryan, who added that the association had followed all the correct procedures. “But in the end, I have to say he brought it upon himself.”

Lawyer Thomas Gurran, who represents the association, said in a statement that the association had “just wanted Mr. Prudente to comply with the lawn restriction.” He added that the contempt power of judges is essential to the system.

“Many orders and judgements … would be absolutely meaningless if they could not be enforced by a judge’s contempt power,” he said. “This case is an example of what happens when someone defies an order entered by a judge in our country.”

Prudente’s family said the case had gone too far. Pat Prudente said she and her husband knew they had chosen to live in a community with restrictions. “But they shouldn’t have this much power,” she said.

Back at the jail — where the population is 1,132, well above the 782 capacity — Parente said he was being treated well. He has no criminal record in Florida and said his stay in Land O’Lakes was his first time ever in a slammer.

Leading safe manufacturers contacted by The Times said that they had seen a big increase in demand. Many predicted that fears of meltdown in the banking sector would mean a further rush before Christmas.

One company said that sales had increased by a quarter, while another said that its staff had received calls from panicking investors who now wanted to keep their savings locked away at home.

Russ Reader, the managing director of Leigh Safes, which makes, fits and sells safes, said: “It’s simple: if there’s a lack of confidence in banks, people buy and fit European and insurance-approved safes and put the contents on their home insurance.

“We’ve seen a 25 per cent increase in sales and inquiries over the last four weeks, in particular for higher-grade safes that insurance companies approve for larger sums. It all started with the troubles at Northern Rock and Bradford & Bingley.”

Gunnebo, which owns the Chubb-safes brand, one of the biggest safe manufacturers, saw a 15 per cent increase in sales in September.

Anthony Neary, a partner at Safe Shop, an internet-based sales company, said: “We’ve had three recent calls from people saying that they want to take their cash savings out of the bank and put it into a safe. One was withdrawing £50,000, another £10,000 and the other £4,000. I was staggered. But the last week has seen a sea change in public opinion. There’s no question that people are thinking about it.

“In a month or two I expect a dramatic increase in the sales of residential-user safes.”

Robert Phillips, the managing director of Safe Options, said he had had calls from people claiming to have lost confidence in the banking system and wanting underfloor safes fitted.

The increase in sales of domestic safes is also thought to be linked, in part, to those who had heeded warnings of a potential collapse in the housing market and either sold buy-to-let properties or their own homes and moved into rented accommodation to live off the interest from the wealth they had amassed during the property boom.

Safes are built to comply with a “Eurograde” requirement – the higher the grade, the larger the sum an insurance company will insure cash stored within it.

A spokeswoman for Which?, the consumer organisation, said: “As for where is safest for your money, the first £50,000 of your savings with a financial institution is covered by the Financial Services Compensation Scheme. Which? would advise anyone wanting to protect larger sums of money to spread their savings across a number of banks and financial institutions, so that there is no more than £50,000 in each one.”

The closures are the 14th and 15th bank failures so far this year.

The FDIC said in a prepared statement that Main Street Bank had $98 million in total assets and $86 million in total deposits as of Tuesday. All of Main Street’s deposits were assumed by Monroe, Mich.-based Monroe Bank & Trust, the FDIC said.

The FDIC said that Meridian Bank had total assets of $39.2 million and $36.9 million in total deposits as of Sep. 25. National Bank will buy roughly $7.6 million of Meridian’s assets, while the FDIC will “retain the remaining assets for later disposition,” according to its statement. All of Meridian Bank’s depositors, “including any with deposits in excess of the FDIC’s insurance limits,” will automatically become depositors of Hillsboro, Ill.-based National Bank, the FDIC said.

The unprecedented move will make the government the biggest shareholder in at least two banks.

Royal Bank of Scotland (RBS), which has seen its market value fall to below £12 billion, is to ask ministers to underwrite a £15 billion cash call.

Halifax Bank of Scotland (HBOS), Britain’s biggest provider of mortgages, is seeking up to £10 billion.

Lloyds TSB, which is in the process of acquiring HBOS in a rescue merger, wants £7 billion, while Barclays needs £3 billion.

The scale of the fundraising could lead to trading at the London stock market being suspended. This would give time for the market to digest the impact of the moves.

One consequence of the deal might be that Lloyds could renegotiate the terms of the HBOS takeover, although both sides are still keen for the merger to take place.

An economist who declined to be named said: “This is the biggest risk of the UK’s balance sheet ever undertaken. No-one knows the extent of the toxic assets these banks are exposed to.”

Separately, the future of Morgan Stanley, the American investment bank, is also in doubt today following a sharp sell-off of shares and warnings of a possible credit downgrade from Moody’s the ratings agency.

Mitsubishi UFJ Financial Group is reviewing the terms of a $9 billion (£5.3 billion) capital injection into the bank and may launch a takeover. HSBC, Citigroup, JP Morgan and Deutsche Bank are also assessing the situation. Morgan Stanley’s market value has slumped to $13 billion.

The British bank rescue could leave the government owning 70% of HBOS and 50% of RBS. As a result it could take board seats at both companies and exercise control over future dividend payments.

Crisis talks were taking place this weekend between the Treasury, the Financial Services Authority, the Bank of England and heads of the four retail banks. As part of the fundraising it is likely that banks will also have to own up to future losses from their exposure to sub-prime mortgages and other financial instruments.

Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don’t trust the financial institution named in the buyer’s letter of credit, analysts said.

“There’s all kinds of stuff stacked up on docks right now that can’t be shipped because people can’t get letters of credit,” said Bill Gary, president of Commodity Information Systems in Oklahoma City. “The problem is not demand, and it’s not supply because we have plenty of supply. It’s finding anyone who can come up with the credit to buy.”

So far the problem is mostly being felt in U.S. and South American ports, but observers say it is only a matter of time before it hits Canada.

“We’ve got a nightmare in front of us and a lot of people are concerned it’s going to get a lot worse,” said Anthony Temple, a grain marketing expert based in Vancouver.

The port troubles occur as financial institutions worldwide experience an unprecedented level of failures; even the strongest global banks are taking shelter in government bailouts. Tuesday, the U.K was expected to invest as much as £45-billion ($87.01-billion) in three of the country’s biggest banks, while the U.S. government rushed to put in place its US$700-billion rescue package for beleaguered financial market players. Ottawa has so far resisted pleas for direct financial aid for exporters.

Access to credit is key to the survival of maritime trade and insiders now say the supply is being severely restricted. More than 90% of the world’s trade by volume goes by ship.

The Baltic Dry Goods Index, the main measure of shipping rates, is down 74% from its high back in May when trade with China was still strong.

“The credit crisis has made banks nervous and the last thing on their minds is making fresh loans,” Omar Nokta, an analyst at investment bank Dahlman Rose, said in an interview with Reuters.

While shipping has always been a cyclical industry whose fortunes rise and fall with the global economy, analysts said the current crisis over the drying up of credit is something they have never seen before.

Jason Myers, head of the Canadian Manufacturers and Exporters, said exporters across Canada are getting caught up in the turmoil as customers delay payments, forcing them to shoulder the cost.

“What some companies are saying is we can’t pay you until our customer pays us, so it becomes a question of who bears the financial risk and the cost,” Mr. Myers said. “We’re hearing about it more and more.”

What that means is that manufacturers are getting hit as revenue slows and long-time customers disappear from the order book altogether. As profits decline, investment in product development starts to fall, too, he said.

The Canadian Wheat Board, one of the world’s biggest grain marketers, has yet to refuse a customer because of poor credit, according to a spokesperson. “As of this moment we haven’t run into that problem,” said Maureen Fitzhenry.

Officials at Viterra, Canada’s leading grain handler, were not immediately available for comment.

The meltdown in financial markets has resulted in a dramatic slowdown in maritime trade, with major ports in Canada and the United States preparing for sharply reduced activity after several of the busiest years on record.

Gold traded in a wide range of more than $100 an ounce on Friday, capping a volatile week with gains of only 1.3 percent even as global stock markets lost heavily.

Bullion in overnight trade touched a 2-1/2 month high of $931 as a slide in the global equity markets sent investors racing to a safe haven from the financial crisis.

However, even gold could not withstand relentless selling across all asset classes as investors sought cash to cover margin calls amid steep losses in stocks. It hit a low of

$823.50.

Spot gold dropped to $845.80 at 2:50 p.m. EDT (1850 GMT), down 7.2 percent from Thursday’s nominal close at $911.50.

“It’s total panic. People are so scared that they are looking to liquidate everything that has cash value and to stay away from everything,” said Bruce Dunn, vice president of New Jersey-based Auramet Trading.

Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury’s $700 billion Troubled Asset Relief Program.

The Federal Housing Finance Agency, which placed the two companies in conservatorship on Sept. 7, directed them last month to start increasing their purchases of loans and mortgage-backed securities as the Treasury seeks to absorb underperforming and illiquid assets from financial companies.

“For now, they’re under conservatorship and they have to be used to keep the flow of capital going to the housing market,” former Treasury Secretary Lawrence Summers said in an interview on Bloomberg Television’s “Conversations with Judy Woodruff.” “They’re important to maintaining the flow of government finance” and need to be used actively, he said.

Adding underperforming assets to Fannie and Freddie’s combined $1.52 trillion mortgage portfolios would come at a time when the two mortgage-finance companies already hold as much as $210 billion of bad debt that may be eligible itself for the Treasury’s relief program, their regulator said Oct. 5.