Washington Mutual went under. Seized and sold.

[drone]

Banks played their part for sure. What many people fail to realize is that during the run, banks actually encouraged bad loans. This way they got paid for closing costs, took in a couple years of payments, then foreclosed on the home and sold it for even more money to the next sucker. A great business model all around, until the house prices stopped going up.

JP is loving life. They offered to buy WaMu back in March but were turned down. Now they got them at a bargain. This is actually a good thing though, this keeps WaMu's insured deposits from getting hit, so the FDIC fund remains intact for now. A WaMu failure would have taken about half of it, IIRC.

[KukriKhan]

So, a question:

If WaMu's bad paper (and a mini-run by depositors) made it "unstable" according to regulators, and JP Morgan could afford to fold WaMu's bad paper into its own operation - presumeably at something less than a net loss... do we taxpayers really have to still pump $700Bn of unearned cash into this system? Might the behind-closed-doors dithering on the bailout, actually have been a good thing, and that bailout now be moot? Might the market just correct itself (leaving shareholders flat, of course)?