primary and secondary reasons

Made poor lending decisions, failed to diversify its investment portfolio, failed to have enough capital. They should have sold the loans they made and bought AAA loans spread across the country so as not to be vunerable to the crazy CA market.

WaMu, founded in 1889, became a national mortgage- & consumer-lending giant via a string of mergers in the 1990s led by Chief Executive Officer Kerry Killinger. But Mr. Killinger made several missteps. He pursued an aggressive retail expansion marred by poor locations in too many markets. He steered WaMu into subprime mortgages, only to discover too late that the thrift was lending to many unqualified borrowers.

Decisions of management to make ill-advised & poorly timed pushes into exotic-turned-toxic mortgages, & the inability to adjust its market position when conditions turned against it.

The collapse was trigerred when Washington Mutual customers withdrew $16.7 billion in cash from the thrift in the past nine days, a huge outflow that led to the largest bank failure in U.S. history, the institution is regulator said Friday. Federal regulators said the exodus of deposits left WaMu ''with insufficient liquidity to meet its obligations.'' As a result, WaMu was in ''an unsafe & unsound condition to transact business,'' according to the OTS.

The withdrawals were largely concentrated among retail deposits that were over the Federal Deposit Insurance Corp is $100,000 insurance cap, said Tim Ward, the Office of Thrift Supervision is deputy director for examinations, supervisions & consumer protection.