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WaMu fails; bailout talks falter; USC loses shocker to Oregon State

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A late-night attempt at levity in the headline. Quick links and headlines on the night’s big developments:

First, the failure, seizure and sale of Washington Mutual:

Wall Street Journal: In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to JPMorgan Chase & Co. Reuters, via CNBC, wraps both stories into one: A rescue for the U.S. financial system unraveled late Thursday amid accusations Republican presidential candidate John McCain scuppered the deal, and Washington Mutual was closed by U.S. authorities and its assets sold in America’s biggest ever bank failure.Los Angeles Times: Washington Mutual depositors won’t lose access to any of their money, even if it wasn’t fully insured, the Federal Deposit Insurance Corp. said.

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At roughly the same time at the White House, bailout talks were, according to a New York Times headline, ‘imploding.’ The picture above shows downcast Democratic Sens. Harry Reid and Christopher J. Dodd leaving the talks. The scene that lingers in the mind is the image of Treasury Secretary Henry M. Paulson down on bended knee (I’m not making this up), pleading with House Speaker Nancy Pelosi to keep the deal alive.

Wall Street Journal: Wrangling among the nation’s top political leaders threw the Bush administration’s $700-billion bailout plan into disarray late Thursday, despite a dramatic day of negotiations on Capitol Hill that seemed to promise a deal.New York Times: The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.Los Angeles Times: What remained unclear was whether today’s impasse marked the beginning of the end for the rescue effort, or merely a tumultuous interlude on the way to action that many in Congress consider unpalatable but unavoidable.

-- Peter Viles

Wild stuff. Your thoughts? Comments? E-mail story tips to Peter Viles

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