Is Washington Mutual's predicament funny? Only partially. WaMu billed itself as a bank that was different from the rest of the financial institutions out there. And perhaps the way it treated its customers -- at least according to its ads -- was superior to other banks. But a bank that invests poorly -- that lends money to subprime mortgage candidates -- deserves its fate. Washington Mutual reaped what it sowed -- "WaMu" will be remembered for its great commercials and shoddy investing. JP Morgan (JPMorgan Group) was getting a bargain when it purchased Washington Mutual's customers. And that's what they bought, really -- banking customers. Why? Because the holdings for Washington Mutual were heading down the tubes! WaMu is but one of our now bankrupt banks, and WashingtonMutual will remind us how important our FDIC insurance really is. Granted, JP Morgan now has the accounts for WaMu customers, but it could have been worse -- taxpayers could have been paying for Washington Mutual's losses through the FDIC. The debate now remains as to which would've been better -- FDIC insurance paying back the customers, or a goverment bailout like we saw with AIG. (We disagree with the whole notion of the bailout. It may successfully postpone the problems we're seeing with failing banks today, but toying with a free market system is like attempting to control nature: it can't be done. You can shelter yourself from the storm, but you can't buy the sky.) People with Washington Mutual accounts have been rescued by JPMorgan through the free-market system. Can we say for sure that other failing groups wouldn't also be similiarly saved? They say people wouldn't be able to get financial aid for schooling, or mortgages, or car loans -- but see what happens in the case of WaMu: another party steps in to take advantage of the loss. Would tuition costs remain the same if there were a sudden drop in student enrollments? No! Colleges and universities would lower their prices to affordable levels. Many ivy league schools have millions -- MILLIONS -- of dollars in holdings. They could afford to run with NO tuition for years. The billions of dollars that we see disappearing from Washington Mutual's coffers aren't truly vanishing -- they were withdrawn en masse by customers who saw the writing on the wall. In one week, the rush on the bank at WaMu branches left Washington Mutual with little cash assets left, and the inability to liquidate its other assets, because they were tied up in terrible investments -- sub-prime mortgages! Wisdom should have prevailed, rather than greed; what seemed like easy money was, in reality, phantom cash. It's possible to make a profit when you get lucky with such investments -- getting out before the other guy does -- but fiduciary "chicken" is foolhardy at best. WaMu executives have learned this lesson, albeit too late; other bankers should learn from it, too. Perhaps we can blame the Fed for the lowered interest rates that encouraged such insane lending practices, but this is dubious blaming. Lenders got greedy, borrowers got greedy, and only the few who got out in time made a profit. Rest in peace, Washington Mutual. You had funny commercials, but unfunny commercial behavior.