As discussed Monday, the financial system continues to collapse.

While the Treasury’s $700 Billion Proposal is in a stalemate, the US government has siezed Washington Mutual.

For more information about the Treasury’s plan read the following link from the Wall Street Journal.

While the congress debates the details of the plan, hundreds of economist urge congress not to rush on a rescue plan. Read more at Bloomberg.com

Meanwhile, Washington Mutual has $307B assets and $188B in deposits. However the US government has closed the back and sold it’s assets to JPMorgan Chase & Co for $1.9 billion. From a financial standpoint, this just doesn’t make sense… JPM has recieved two deals of a life time in one year! There is definitely something strange about this deal.

The Office of Thrift Supervision said, “With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business.” FDIC Chairman Sheila Bair said the bailout happened on Thursday night because of media leaks, and to calm customers. Usually, the FDIC takes control of failed institutions on Friday nights, giving it the weekend to go through the books and enable them to reopen smoothly the following Monday.

Read more about WaMu’s story, the largest U.S. bank failure in history!

How will anyone ever want to buy financial stock if the government can seize them at a moment’s notice when the markets are close. The only people who lose here are the private investors!