WaMu Down

We knew it was coming.

The federal government has arranged for Washington Mutual to sell its deposits and some branches to JPMorgan Chase, people briefed on the matter said Thursday night.

The deal does not include any branches in New York City.

Washington Mutual has seen its stock slide nearly 88 percent this year.

The firm recently hired Goldman Sachs to solicit potential buyers, and the list has included the likes of Citigroup, Wells Fargo, HSBC and Banco Santander.

While Washington Mutual argued that it has adequate capital, it has suffered debilitating downgrades of its credit rating over the past two weeks, endangering its financial health.

The talks have continued amid heightened concern about all financial companies and an intense political battle over creation of a giant bailout fund on Capitol Hill. Washington Mutual plunged into the subprime mortgage and credit card business over the last few years, and has been ravaged by the worsening housing crisis. Analysts suggest that it could rack up losses totaling $30 billion or more.