WaMu – One Of Nations Largest Banks Collapses

As the debate over a $700 billion bank bailout rages on in Washington, one of the nation’s largest banks – Washington Mutual Inc. – has collapsed under the weight of its enormous bad bets on the mortgage market.

The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion.

Earlier, urgent efforts to lash together a $700 billion rescue plan for the national economy appeared to be stalling Thursday night, hours after key lawmakers had declared they had reached a deal.

Weary congressional negotiators hurried back to work, joined by Treasury Secretary Henry Paulson in an effort to revive or rework the proposal that President George W. Bush said must be quickly approved by Congress to stave off economic disaster. Congressional leaders said Federal Reserve Chairman Ben Bernanke might come to Capitol Hill, too, if enough progress was made.

The meetings were to continue into the night.

After six days of intensive talks on the unprecedented package proposed by the Bush administration, with Wall Street tottering and presidential politics intruding six weeks before the election, there was more confusion than clarity.