In the biggest bank failure in history, JPMorgan Chase will acquire massive branch network and troubled assets from Washington Mutual for $1.9 billion.

JPMorgan Chase acquired the banking assets of Washington Mutual late Thursday after the troubled thrift was seized by federal regulators, marking the biggest bank failure in the nation's history and the latest stunning twist in the ongoing credit crisis.

Under the deal, JPMorgan Chase will acquire all the banking operations of WaMu, including $307 billion in assets and $188 billion in deposits.

To put the size of WaMu in context, its assets are equal to about two-thirds of the combined book value assets of all 747 failed thrifts that were sold off by the Resolution Trust Corp. - the former government body that handled the S&L crisis from 1989 through 1995.

In exchange for scooping up WaMu, JPMorgan Chase (JPM, Fortune 500) will pay approximately $1.9 billion to the Federal Deposit Insurance Corporation.

Americans don't need to worry about another depression. But no matter what happens with the bank bailout, the economy is unlikely to turn around soon.

First, the good news: Even if warnings of economic catastrophe aren't enough to win approval of a controversial $700 billion Wall Street bailout, the economy is not at risk of falling into a depression, most experts agree.

During the Great Depression, unemployment shot up to as much as 25% in 1933. That came after the gross domestic product, the broadest measure of economic activity, plunged 13% the previous year.

Millions of people lost their savings when banks closed without any insurance for its customers' deposits. Few economists are predicting economic pain of that magnitude.

Now the bad news: Even if the plan to buy up bad mortgage debt from troubled banks and Wall Street firm does pass, it probably won't be enough to stop the economy from getting worse than it is today.

The Bush administration sketched out a multi-faceted effort
on Friday to confront the worst U.S. financial crisis in decades,
outlining a program that could cost taxpayers hundreds of billions of
dollars to buy up bad mortgages and other toxic debt that has unhinged
Wall Street.

President Bush, flanked by Treasury Secretary Henry Paulson and Federal
Reserve Chairman Ben Bernanke, acknowledged that the program will put a
"significant amount of taxpayers' money on the line."

The administration is asking Congress to give it sweeping new powers to
execute the plan. Paulson said it "needs to be big enough to make a real
difference and get to the heart of the problem."

Paulson gave few details but said he would work through the weekend with
leaders of Congress from both parties to flesh out the program, the
biggest proposed government intervention in financial markets since the
Great Depression. Members of the Senate Banking Committee said they had

We are in historically unprecedented times. The foundation is being laid for a default of USTreasurys in the wake of the greatest regulatory failure in modern history, and the collapse of the US financial system. Anyone who cannot see that suffers from poor vision, chronic nostalgia, low mental wattage, a paycheck from Wall Street, a post in financial press media, or owning an Economics advanced degree. So many changes come with each passing day, not week, that it boggles the mind. Many of us predicted $100 updays for gold, and we almost saw one. The wheels came off the US financial wagon long ago, but only now that fact is being recognized. The monetization largesse finally has gone beyond the corrupt bailouts of fraud kings on Wall Street. My longstanding forecast has been that when the monetary inflation machinery spits output beyond the sanctimonious walls of the Wall Street whorehouses, INTO THE MAINSTREAM, that the gold price would rise substantially.

Wall Street ignored gold and silver during most of the 1970’s hyper-profitable bull market. They were either outright hostile, or acted as though the metals didn’t even exist. I got no respect, even though the first edition of my book sold 2.6-million copies and was near or at the top of The New York Times best-seller list in both hard and soft cover for two years, and I was all over the media; Wall street Week, Oprah twice, Regis and Kathy Lee three times, etc, etc. They were usually hostile also. Wall Street paid little attention to gold until it reached about $650, far too late for them to have much of a chance for their clients to make money.