The meltdown on Wall Street that has essentially frozen up the credit market may be trickling down, affecting corporations and even local governments, according to Bloomberg News.

Goodyear Tire & Rubber Co., Duke Energy Corp., Gannett Co. and Caterpillar Inc. have all recently tapped emergency lines of credit. Calif. Gov. Arnold Schwarzenegger has said that his state may be forced to ask for emergency federal loans if the credit market remains as tight as it is now.

Last week a deal for the sale of Wachovia to Citigroup appeared to be almost finalized. However, legal action taken over the weekend by Wells Fargo has allowed the company to re-enter the bidding process.

Over the weekend an appellate court overturned the ruling of a lower court essentially blocking the sale of Wachovia to Wells Fargo. The company now believes that the deal will go through allowing its acquisition of Wachovia.

Neel Kashkari is expected to be named the interim head of the newly created Office of Financial Stability as early as today, according to Bloomberg. Kashkari will be handed the reins to the largest government intervention in U.S. history by leading the agency in charge of managing the $700 billion bailout package President George W. Bush signed into law Friday.

Kashkari currently acts as assistant secretary for international economics and development at the Treasury Department. He is a top aide to Treasury Secretary Henry Paulson and a former executive vice president of Goldman Sachs & Co. Goldman Sachs is also the previous employer of Henry Paulson.

It has become commonplace to hear reports of new casualties among the economic titans, but the struggling economy has taken its toll on mid-sized businesses as well, according to The Deal Newsweekly.

Middle-market deals, those valued between $100 million and $1 billion, have fallen off recently as the credit market ceased functioning. Companies are finding it more and more difficult to raise private equity as the “contagion” of Wall Street spreads throughout the system. Many had hoped that the dysfunctional financial system would take its toll at the top – picking off Merrill Lynch, Lehman Brothers, Bear Stearns and others – but leaving mid-sized businesses relatively unscathed. As has been the case with most of the market optimism at the beginning of this downturn, the idea that middle-markets would persevere is quickly going out the window.