Well, that was a long way down...

Well, it finally happened. Washington Mutual has gone the way of many other financial institutions that had questionable management: Continential Illinois, Riggs National, et al. However, I can't help but feel WaMu was a root cause of much of the current fiscal crisis.
I was with Whammy through much of the 1990's before my layoff in 2004, and I think I can point to the day the fall began. It started with the appointment of one Mr. C. Davis as the head of the mortgage lending group, coming in from the failed American Savings (that should have set off some warnings right there.) The day he was appointed to his post, WaMu stock showed a drastic fall; apparently even the market knew it was bad news.
From then on, Mr. Davis proceeded to remake this once well managed regional bank into a national 'mortgage banking' franchise, no doubt using his script from American Savings. WaMu soon became a residential lending powerhouse and innovator, coming up with new ARM products that would eventually place more borrowers at risk. And he loosened underwriting, assuring more loans were made to enhance profit.
WaMu had a very low non-performing asset base for a long time, and it was felt they could expand their lending and take on more risk. Hence, the move into subprime and the lackluster oversight of their wholesale lending business. Can anyone say "bite me on the tush?"
By the time management wised up and removed Mr. Davis, the damage had been done. (Don't get me started on his platinum parachute he got when dismissed; look it up on the SEC website.) From here on, WaMu was not going to recover. Kerry's goal of getting the ROA up to competitor levels would never happen without something being done. What to do? Of course, layoffs!
One of the easiest ways to enhance the balance sheet is to reduce expenses, and one of the fastest ways to do that is employee overhead, i.e., salaries. Hence, the start of the ongoing saga of layoffs at WaMu, where they started, ironically, by letting go some of their best people because their salaries were too high. And, ironically, Kerry got raises and bonuses because of his 'effective managing' of the bank through tough times, that is, reducing expenses. Tough management - let people go to save the ship and your own gold mine. The Board is/was as culpable in the failure as any one individual, but they kept Kerry too long. He was a regional bank manager trying to manage a national franchise; he didn't have the savvy to do so. Then, neither did the Board.
I've been thinking since 2004 that WaMu would be bought out. They should have been; they stupidly turned down JP Morgans first buyout attempt this year. They did finally part ways with Kerry; I'm sure he refused a big bonus and compensation package because he couldn't turn around WaMu's fotunes. HA! Not Likely! I'll be honest, I respected Kerry when I worked there in the regional bank times, and a bit into our foray into the national market. But he soon showed he too was consumed by greed and the largess of a Board that was not about to perform its own fiduciary duties.
Now where are they? A part of JP Morgan! And the interim CEO that replaced Kerry Killinger? For a 16-day stint at a failing bank his removal package is obscene. And the OTS in all their glory is letting him take it, not that he has any more conscience when a windfall comes his way than Kerry or Mr. Davis did. But for 16 days? Shame is too kind a word, and again the Board shows it has no sense of responsibility to the Bank, the shareholders, the employees, anyone.
WaMu is where it should be, where it was destined to be from that fateful day Mr. Davis was brought in. Nothing could have stopped the downfall because the egos and greed were just too big. Rest in peace, WaMu. You deserved better.