Another day, another failout.

This time it was Washington Mutual's (NYSE:WM) turn to make the headlines as the largest bank failure in U.S. history. And JPMorgan Chase (NYSE:JPM) was there for the fire sale.

After a Lehman Brothers-bankruptcy-driven 10-day run on its deposits, WaMu was seized by the government on Thursday night (which speaks to the urgency of the situation -- seizures usually occur on Fridays to minimize disruptions).

Enter JPMorgan, which bought WaMu for a scant $1.9 billion (WaMu shares closed yesterday at $1.69, or $2.9 billion in market cap). Of course, JPMorgan also inherits WaMu's California-centric and exotic mortgage-laden balance sheet; it expects to write down $31 billion of bad loans and seek $8 billion of new capital.

Before last night's events, WaMu had many rumored suitors. The ranks included Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and Banco Santander SA, as well as some private-equity firms, but none was willing to pay up for a pre-seizure WaMu.

Ironically, JPMorgan was. Back in the spring of this year, JPMorgan offered $8 a share for Washington Mutual, only to be turned down in favor of a now-regrettable $7 billion infusion from private-equity firm TPG. My Foolish colleague Morgan Housel chastised management for turning the deal down then. Henry Paulson chastised management earlier this month.

WaMu shareholders (including TPG) are definitely the big losers in all of this. So are people who long for banks that aren't too big to fail. This year, JPMorgan has worked with the government to buy out not only WaMu but also Bear Stearns. Meanwhile, Bank of America (NYSE:BAC) swallowed up Countrywide and Merrill Lynch (NYSE:MER). Those six companies were all too big to fail to begin with … now they're two mega-banks. Scary stuff.

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Anand Chokkavelu doesn’t own shares in any of the companies mentioned. JPMorgan Chase and Bank of America are Motley Fool Income Investor recommendations. The Fool has a disclosure policy.