Jamie Dimon, chief executive of JP Morgan Chase, said that the bank holds a credit card portfolio of $150 billion. He estimates that credit card losses could reach 9% or $13.5 billion in the third quarter, and up to 10.5% by the end of the year.

Particularly disturbing are the losses that JP Morgan Chase & Company (NYSE: JPM) acquired when it purchased WaMu. Mr. Dimon went on to say that if unemployment rises to 10%, losses on the WaMu portfolio could reach a whopping 24% of the $25.9 billion portfolio. This would amount to a loss of $6.21 billion.

A lot of observers have been complaining that federal bailouts of failed financial institutions have been too generous.

Now the Washington Mutual's holding company is making exact opposite claim, suing the Federal Deposit Insurance Corporation. The company claims that the fire sale to JPMorgan Chase (NYSE: JPM) violated its rights, arguing that a more orderly liquidation would have provided greater value to the company's constituents.

The New York Times took a look at the problems that led to the collapse of Washington Mutual: Fraudulent mortgage applications were approved with nothing in the way of oversight from the boss -- who was snorting methamphetamine every morning. Meanwhile, the CEO took home $88 million between 2001 and 2007 before the company collapsed under the weight of the billions of dollars in bad loans it had made.

According to the Times, "By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower's income and assets -- often with no documentation required -- so long as credit scores were adequate, according to Ms. Zaback and other underwriters."

It's great that former employees and the media are stepping forward to tell this story now -- after shareholders have been wiped out along with homeowners -- but where were regulators and Wall Street analysts back when this stuff was happening?

Here is a roster of some of the fallen ones.

Jimmy Cayne Former CEO Bear Stearns - latest compensation $32.1 million. He led Bear Stearns for 15 years. He resigned last January. Bear Stearns was acquired by JPMorgan Chase (NYSE: JPM) for $10.00 a share. He and his wife purchased two luxury apartments at the Plaza.

Richard Fuld Former CEO Lehman Brothers - Latest compensation $34.4 million. Subpoenaed by federal investigators to determine if he misled investors at Lehman. Executives at Barclays Capital (NYSE: BCS) bought Lehman's US assets.

Kerry Killinger Former CEO WaMu - latest compensation $4.5 million. He became CEO in 1990 and built WaMU into one of the largest US mortgage writers. He offered sub prime mortgages which led to WaMU's rapid growth. He was ousted in September when WaMU was sold to JPMorgan.

Angelo Mozilo Former CEO Countrywide - latest compensation $132 million. He helped build Countrywide into one of the country's largest lenders. A host of class action lawsuits have been filed against Countrywide, which is under investigation by the SEC. Countrywide was sold to Bank of America (NYSE: BAC) in January.

This post is part of our feature on Money Winners of 2008. See all 20.

This past year has been a pretty rough one for CEOs in general. The stock market has tanked since October of last year, dragging down strong companies' share prices to some extent and weak companies' even further. It has been even worse for most financial executives, who have been ousted as their stocks fall to roughly zero and their company goes bankrupt or is taken over by a stronger institution. While many of these CEOs have golden parachutes that open upon their dismissal, much of their compensation is in the form of the company's stock and when that value dwindles, they feel the pain as well. One of our other 2008 Money Winners, Alan Fishman, who walked away with more than $11 million for three weeks work at Washington Mutual, had 600K shares of WM that he saw evaporate.

James "Jamie" Dimon, CEO and chairman of JPMorgan Chase (NYSE: JPM), has not had this kind of trouble over the past year, which places him squarely in the minority among his peers and makes him a money winner. Strictly speaking, Mr. Dimon raked in a salary for this year of "just" $1 million. His bonus allows for an additional $14.5 million, and the way things have been going for JPM, I'd wager a hefty portion of my savings that he gets the full amount. Plus on top of that, he has exercised options worth about $40.1 million this year, bringing the grand total compensation to $55.6 million.

All is not well in Seattle for executives at Washington Mutual. The Seattle Times has reported that some 3,400 WaMu employees, mostly from the company's headquarters, are to be let go by JPMorgan Chase & Co. (NYSE: JPM). The good news for workers is, it appears that employees at WaMu's branch operations will, for the most part, be spared the ax.

These types of staff dismissals should come as no surprise in an era when companies are quickly consolidating just to survive. I suppose that it's fairly standard practice for an acquiring company to thin out the executive herd of any distressed company which it has recently purchased. In regard to this particular instance, The Seattle Times quotes JPMorgan CEO Jamie Dimon as stating: "We are going to build a great company for the long run. Unfortunately, that entails tough decisions in the short run." Tough decisions always tend to ooze downward.

To the credit of JP Morgan & Chase, the executives who are to receive their walking papers at WaMu, will apparently be sent off with moderate severance packages. However, this does little to lessen the pain of good jobs lost. Additionally, The Seattle Times article opens a discussion about the ramifications of this deep payroll cut and operations consolidation upon the local commercial lease space market in a city with an impending surplus of commercial office space.

Preliminary indications are that JPMorgan's consolidation of WaMu in to the 42-story WaMu Center will put approximately 500,000 square feet of commercial lease space back into the hands of Seattle landlords. At least one commercial real estate broker in Seattle indicated that WaMu's withdrawal from commercial space there could lead to slight downward pressure on rents. However, citing a rental office inventory of approximately 37 million square feet, Oscar Oliveira, a senior vice president with brokerage Colliers International, is quoted by The Seattle Times as stating: "It adds a couple percentage points to the vacancy rate... The bank's moves alone won't push lease rates down..."

If you're a fan of found humor as strange juxtapositions, FailBlog.org definitely belongs in your RSS feed. But it's rare that the site contains brilliant -- and unintentional -- commentary on the state of the economy.

FailBlog posted this picture of the neon sign at a Washington Mutual branch office. All that's left is "Was." Before it collapsed in the largest bank failure in history, Washington Mutual was a leader in banking and home loans. It was picked up off the scrap heap by JPMorgan Chase (NYSE: JPM).

More gallows humors: Andy Kessler has suggested that after Bank of America (NYSE: BAC) completes its acquisition of Merrill Lynch (NYSE: MER), the combined company should rename itself "Lynch America Countrywide."

Everything is upside down these days. The folks with all the money and multi-million dollar bonuses are begging for a handout on the pretext that the economy will crash if they do not get one. We're not talking money for coffee or a snack, we're talking billions of dollars.

It is crashing anyway, or at least sinking. It is just a matter of what it takes down along the way. Apparently, the folks at the Treasury and Federal Reserve are now convinced that it will be everything.

The survivors are pawing at the defeated as Wells Fargo tries to grab Wachovia despite its previous tentative agreement with Citigroup Inc. (NYSE: C). While Citigroup gained a point in Wachovia deal over the weekend, the balance has since tilted in favor of Wells Fargo again.

Bank of America (NYSE: BAC) gobbled up Countrywide (done) and Merrill Lynch (NYSE: MER) (a work in progress), while JPMorgan Chase (NYSE: JPM) corralled Bear Stearns and Washington Mutual (NYSE: WM).

Sadly, only the federal government was big enough to swallow the problems of American International Group (NYSE: AIG), Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Otherwise,those in the know think world financial markets would have crumbled due to the collateral damage, (pun intended).

When I posted Congress is screwing up -- think backstop not bailout!, I was concerned with the psychological effect as much as the financial effect of not approving the funding, but no doubt the people suffering the most are not those who created the pain.

In short order, the shareholders of Washington Mutual (NYSE: WM) have lost billions. A tier-1 private equity investor, TPG, has lost $1.3 billion on the company. And, unfortunately, thousands of WaMu employees have lost their jobs.

However, there are some winners. For example, there are the short sellers. JP Morgan (NYSE: JPM) is also likely to do well since the firm bought WaMu's assets for a mere $1.9 billion.

But there appears to be yet another interesting beneficiary: Alan Fishman. He is WaMu's CEO, who took the top job 18 days ago.

As should be no surprise, he signed a juicy contract: a $7.5 million signing bonus and a lump-sum payment for severance that comes to $6.15 million. In other words, if he leaves the company, he'll walk away with $13.65 million.

That's a pretty good deal in light of the fact that WaMu is the biggest bank collapse ever.

Moreover, I suppose it is yet further evidence of why Americans have low regard for the financial system. And despite huge bailouts, it's probably a good bet that little will change.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

The report gave WaMu three stars (out of five) and advised investors to "hold" the stock. Its three star rating meant "total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis."

While the report noted that the risk of the stock was "high," it set a twelve month "target price" of $4 and justified its projection with some very sophisticated reasoning involving price-to-book multiples.

The analyst predicted an "increase in net margins in 2008" and noted that WaMu was likely to "... benefit from an improving yield curve, the addition of higher-yielding credit card receivables, and the repositioning of its balance sheet, which included the sale of low-yielding loans and securities."

On September 25, 2008 -- one day after this report was issued -- the FDIC seized WaMu and sold its banking assets to JP Morgan Chase (NYSE: JPM) for $1.9 billion.

WaMu closed yesterday at $1.69. It is likely shareholder value will be destroyed.

I am sure there are many instances where Standard & Poors and other analysts got it right. But the inability of its analyst to look a mere twenty-four hours into the future and see total disaster is a prime example of why investors need to fundamentally change the way they invest.

The concept of studying the markets to find inefficient pricing in any particular stock has little credible evidence to support it. Part of playing this game involves reading analyst reports, listening to the financial media and relying on brokers and advisors who claim to have a skill that does not exist.

This elaborate dance continues because there are so many financial interests that benefit from the process.

Unfortunately, yours is not among them.

Dan Solin is a Registered Investment Advisor and the author of The Smartest Investment Book You'll Ever Read (Perigee Books, 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, 2008).

In what I feared might become a regular feature here, the Federal Deposit Insurance Corporation (FDIC) arranged for the takeover of the 13th failed bank of 2008 Thursday. As I posted, the FDIC likes to close banks on Friday after hours so it can reopen as branches of the acquiring bank on the following Monday morning. But since this is history's biggest bank failure, the FDIC couldn't wait for the weekend. The bank in question is the $310 billion (assets) Washington Mutual (NYSE: WM).

This is history's biggest bank failure -- it's almost eight times bigger than the previous record holder, Continental Illinois. In this case, JPMorgan Chase (NYSE: JPM) was the rescuer, buying WaMu from the FDIC. This follows JPMorgan's purchase of Bear Stearns back in March in which the Federal Reserve provided a $29 billion loan. But this deal will cost JPMorgan far less -- a mere $1.9 billion, and it will write down WaMu's loan portfolio by 10% in the process. To further bolster its position, JPMorgan will raise $8 billion in capital.

What does JPMorgan get for all this? Branches for one thing -- 5,400 in 23 states -- and it will shutter 10% of the combined branches. What JPMorgan does not get is much of the junk that WaMu carried and by that I refer to "senior unsecured debt, subordinated debt, and preferred stock of WaMu's banks, any assets or liabilities of the holding company, Washington Mutual Inc.; or [WaMu's] lawsuits."

In an enormous and startling turn of events, the Federal Deposit Insurance Corp. has taken over Washington Mutual (NYSE: WM), forcing it into an arranged marriage. According to reports in the Wall Street Journal, the FDIC reached out to the nation's biggest banks, asking them to make an offer. JPMorgan Chase (NYSE: JPM) was the one to step up to the plate, taking over the bank's deposits and branches. The value of the deal, and the fate of the bad assets, isn't currently known; but equityholders and senior debt holders will be wiped out.

Depositors leery of the bank's failure were part of the problem; $16.7 billion in deposits have been taken out of the bank since September 15. According to the WSJ, the FDIC fund won't be affected by the takeover.

One of the many lingering questions about the government's $700 billion buyout of the financial services industry is what to do about Washington Mutual Inc. (NYSE: WM).

The Seattle-based bank, which under former Chief Executive Kerry Killinger racked up billions of dollars in losses following a disastrous acquisition and lending strategy, is reportedly trying to sell itself. Officials with the Office of Thrift Supervision are eager for a "speedy" sale, according to the Financial Times. JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC), Citigroup Inc. (NYSE: C), HSBC and Banco Santander all have expressed an interest in WaMu, the paper said.

More speficially, they are probably most interested in Washington Mutual's network of more than 2,300 "consumer and small business banking stores" throughout the country. And what about the company's radioactive loan portfolio? That, fellow taxpayers, is all yours.

How much subprime sludge is on WaMu's books is not clear. As of June 30, it had assets of more than $309.7 billion. WaMu is expecting $19 billion $4.5 in loan losses during the quarter. The losses may lost as much as $19 billion over the next two-and-a-half years though analysts are expecting the red ink to be more like $28 billion, according to BusinessWeek. To make matters worse, WaMu does about half of its lending in California, one of the states hit hardest by the subprime crisis.

TheStreet.com's Jim Cramer says there are some events out there -- WaMu being the biggest -- that make the plan worth adopting.

The vote from Monday's market was pretty resounding: The plan won't help. Or if it does, it will be too costly and there are too many details that can't be worked out.

So should it just be let go?

I am a big believer in the plan because there are some events out there that would make the plan worth adopting no matter what. And the biggest event is Washington Mutual (NYSE: WM) (Cramer's Take). Here's a firm that just had its debt downgraded again last night, and if you read the ratings downgrades you can't see how the feds can avoid seizing it.

But what happens when they seize it? The thing is so mammoth that it would overwhelm the FDIC. Although with this administration's magic-wand philosophy, maybe we can just get some stopgap funding. Or maybe we just say, "As long as there are no lines outside WM, we are fine." But at a certain point, no investors are going to want to buy any of this company's debt and the losses could be too great.

Almost two months have passed since I posted Serious Money: Tempting fate with 10 financials - the results of buying into the following pool of financial stocks at a time when the "hate 'em" factor was at a peak, or so I thought. Now things are even worse, much worse, and a new market bottom was reached only last week.

Trying to predict where this market will go is not possible, but there are many ways to play it. I chose to buy into a pool of financial stocks, believing the survivors would post gains that would overshadow the losers.

When I last updated this story, the pool of stocks was up 26%. Things have gotten worse, but the group is still up 13.89% plus the dividends. This is better than any of the indices, although it is much more speculative.

There was plenty of big news since the last report. While Lehman Brothers Holdings (OTC: LEHMQ) went bankrupt, MBIA Inc (NYSE: MBI) made up for it by more than doubling. Meanwhile, Merrill Lynch (NYSE: MER) is in survival mode supported by a Bank of America (NYSE: BAC) buyout offer. Seven stocks are up, two are down and one is gone (returns from July 29 prices):