What a week. Events are again conspiring to ruin Wall Street’s weekend, and stock futures are pointing down.

Where to begin? Well, the outcome of the $700 billion bank bailout has become as cloudy as the skies over Manhattan, and some say the uncertainty threatens to derail the financial system, not to mention tonight’s presidential debate.

And all the politicking and hand-wringing is taking place amid the biggest bank failure in U.S. history. The government shut down Washington Mutual and sold its assets to JPMorgan Chase for $1.9 billion.

St. Louis Fed president James Bullard is speaking on the U.S. economy today, and you can bet he’s got a lot of interesting material to work with.

The dollar is down against an index of major currencies. U.S. Treasuries are mostly higher. Oil prices are lower.

Data on tap includes a final reading on second-quarter gross domestic product growth and a report on consumer sentiment.

In mergers and acquisitions, Industrial and Commercial Bank of China says it’s eager to expand in the Middle East – but it’s wary about the United States.

- Lisa Von Ahn

Like a well-timed lightning flash and a clap of thunder, Washington Mutual was felled late last night as politicians withdrew their shaking hands and started pointing to alternatives. The failure – by far the biggest – looked like another steal of a deal for JPMorgan Chase, which picked up branches and assets from what had been the biggest savings and loan for $1.9 billion. So the once-mighty west-coast lender, which had a market cap of $3.9 billion just yesterday, joins Bear Stearns in JP Morgan CEO Jamie Dimon’s stable of failed finanial firms.
 
Now the market can get back to the business of trying to figure out who goes next, and politicians can get back to protecting their (constituents’) interests. Attention may head overseas next, where fear that Washington’s problems getting the bailout going will pound their own banks. Rumors that HSBC might take out UBS have been around for a while, but were seen pushing prices around this week.  Dutch-Belgian bank Fortis’ shares plunged 14 percent as its president insisted it had “no liquidity issue.”
 
Wamu was a particularly big target. The largest U.S. savings and loan has been one of the lenders hardest hit by the nation’s housing bust and credit crisis, and had already suffered from soaring mortgage losses. Here’s how much bigger – Washington Mutual has about $307 billion of assets and $188 billion of deposits. The largest previous U.S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984. 

Deals of the day:

* Macquarie Group , Australia’s top investment bank, plans to sell its margin lending business due to increased costs of funding and to focus on its core businesses. 

* Malaysia’s central bank told state-owned Maybank to cut the price of its $2.7 billion bid for Bank Internasional Indonesia in a latest twist that could kill the troubled deal.

* Russian tycoon Suleiman Kerimov’s Nafta Moskva has offered to acquire fellow billionaire Vladimir Potanin’s 35 percent stake in Polyus Gold for $1.6 billion, Vedomosti business daily said.

* German airline Lufthansa has expressed interest in taking a stake in Alitalia , a union leader said. 

* Top Nordic telecom operator TeliaSonera aims to tap growth in Asian markets by buying controlling stakes in operators in Nepal and Cambodia for around 3.2 billion Swedish crowns ($488 million), it said.

* Tata Motors , India’s top vehicle maker, is in talks with private equity funds to sell up to 25 percent each in six unlisted units, the Economic Times said, citing bankers close to the development.

* Machinery maker Avery India said its parent company had agreed to sell the 58.28 percent stake in the firm to ITW Global Investments, resulting in change in control.  

It was WaMu’s 119^th birthday on Thursday.

The thrift’s predecessor was incorporated on Sept. 25, 1889, “to offer its stockholders a safe and profitable vehicle for investing and lending.” This helped Seattle residents rebuild after a fire torched the city’s downtown.

The government’s choice of the day to seize the thrift, which became the largest U.S. bank failure, is unusual in other ways as well: Regulators typically take over failed banks on Friday afternoons. It gives them more time to sort out things over the weekend.  

The FDIC said it did the deal on Thursday due to media leaks and to calm WaMu’s customers.

For JPMorgan Chase, which offered to take over the thrift for about $7 billion only a few months ago but got spurned, it must look like poetic justice. It is paying $1.9 billion to get the cleaner version of the troubled savings & loan.

Finally Jamie Dimon got to open his WaMu account on Thursday. And he did it with a “whoo hoo!”

(Photo credit: Reuters)

How big is the $700 billion financial bailout package for the markets? Big enough that a change in perception as to whether it will pass can overshadow a cut in outlook from industrial and financial powerhouse General Electric.
 
Initially down after GE slashed its quarterly and full-year forecast, Dow Jones futures turned higher in later pre-market trade on optimism that the bailout will go ahead with only minimal friction in Congress. GE CEO Jeffrey Immelt said persistent woes in its finance arms, which account for half of its business, were to blame for the dimmed outlook. 
 
GE stunned Wall Street in April with an unexpected drop in first-quarter profit. It blamed the global credit crunch and the collapse of Bear Stearns for pushing its finance arms lower. These are the businesses at the root of the outlook problems now. At least the market is getting some warning this time — in the spring, GE sprung the bad news on investors in its results statement.
 
GE shares were down early, sagging to $23.50, off more than $1 from Wednesday’s close. If they hit $20.25 they will have lost half of their value since Immelt became CEO. 
 
Given the size and breadth of its financial biz, it would be no surprise to see GE in line for some bailout money. But the company seems to be saying it is fully capable of managing its own problems for now. If the market starts to sense, though, that the profitable parts of GE, the industrial stuff, will be the next shoe to drop in the economic slowdown…look out.

Deals of the day:

* Washington Mutual , the large U.S. savings and loan company beleaguered by mortgage losses, has approached private-equity firms about a potential takeover after a line-up of listed firms showed reluctance, the Wall Street Journal said citing people familiar with the situation

* Hynix Semiconductor said it would sell part of its stake in a Chinese joint venture to partner Numonyx for $100 million, as Numonyx seeks to raise its control over the Hynix-led chip plant.

* South Korea’s antitrust watchdog said it had granted conditional approval for eBay Inc’s plan to buy a controlling stake in South Korean online retailer Gmarket.

* French insurer AXA and Munich Re’s insurance unit ERGO are among the preliminary bidders for a small South Korean life insurer put up for sale, a source at the domestic insurer said.

* China’s Xuzhou Construction Machinery Science & Technology said that it will buy operating assets worth 5.31 billion yuan ($778 million) from its state-run parent via a share placement.

* Grange Resources will merge with Australian Bulk Minerals in an all stock deal to create a A$1 billion ($833 million) mining company, Grange said in a statement.

Will GE meet its lowered profit forecast for 2008?

What a week. Events are again conspiring to ruin Wall Street’s weekend, and stock futures are pointing down.

Where to begin? Well, the outcome of the $700 billion bank bailout has become as cloudy as the skies over Manhattan, and some say the uncertainty threatens to derail the financial system, not to mention tonight’s presidential debate.

And all the politicking and hand-wringing is taking place amid the biggest bank failure in U.S. history. The government shut down Washington Mutual and sold its assets to JPMorgan Chase for $1.9 billion.

St. Louis Fed president James Bullard is speaking on the U.S. economy today, and you can bet he’s got a lot of interesting material to work with.

The dollar is down against an index of major currencies. U.S. Treasuries are mostly higher. Oil prices are lower.

Data on tap includes a final reading on second-quarter gross domestic product growth and a report on consumer sentiment.

In mergers and acquisitions, Industrial and Commercial Bank of China says it’s eager to expand in the Middle East – but it’s wary about the United States.

- Lisa Von Ahn

Like a well-timed lightning flash and a clap of thunder, Washington Mutual was felled late last night as politicians withdrew their shaking hands and started pointing to alternatives. The failure – by far the biggest – looked like another steal of a deal for JPMorgan Chase, which picked up branches and assets from what had been the biggest savings and loan for $1.9 billion. So the once-mighty west-coast lender, which had a market cap of $3.9 billion just yesterday, joins Bear Stearns in JP Morgan CEO Jamie Dimon’s stable of failed finanial firms.
 
Now the market can get back to the business of trying to figure out who goes next, and politicians can get back to protecting their (constituents’) interests. Attention may head overseas next, where fear that Washington’s problems getting the bailout going will pound their own banks. Rumors that HSBC might take out UBS have been around for a while, but were seen pushing prices around this week.  Dutch-Belgian bank Fortis’ shares plunged 14 percent as its president insisted it had “no liquidity issue.”
 
Wamu was a particularly big target. The largest U.S. savings and loan has been one of the lenders hardest hit by the nation’s housing bust and credit crisis, and had already suffered from soaring mortgage losses. Here’s how much bigger – Washington Mutual has about $307 billion of assets and $188 billion of deposits. The largest previous U.S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984. 

Deals of the day:

* Macquarie Group , Australia’s top investment bank, plans to sell its margin lending business due to increased costs of funding and to focus on its core businesses. 

* Malaysia’s central bank told state-owned Maybank to cut the price of its $2.7 billion bid for Bank Internasional Indonesia in a latest twist that could kill the troubled deal.

* Russian tycoon Suleiman Kerimov’s Nafta Moskva has offered to acquire fellow billionaire Vladimir Potanin’s 35 percent stake in Polyus Gold for $1.6 billion, Vedomosti business daily said.

* German airline Lufthansa has expressed interest in taking a stake in Alitalia , a union leader said. 

* Top Nordic telecom operator TeliaSonera aims to tap growth in Asian markets by buying controlling stakes in operators in Nepal and Cambodia for around 3.2 billion Swedish crowns ($488 million), it said.

* Tata Motors , India’s top vehicle maker, is in talks with private equity funds to sell up to 25 percent each in six unlisted units, the Economic Times said, citing bankers close to the development.

* Machinery maker Avery India said its parent company had agreed to sell the 58.28 percent stake in the firm to ITW Global Investments, resulting in change in control.