The Wall Street Journal scoops on A1 that Washington Mutual is about to get a $5 billion capital fix from outside investors, something the paper says is a “humbling hand-in-hat moment for the 119-year-old Seattle stalwart. Having parlayed the country’s housing boom to a nationwide reputation and immense profits, it is now paying dearly for delving into subprime mortgages.”

The deal, led by private-equity giant TPG, would heavily water down the value of current investors’ shares, and would help WaMu keep from being taken over, something JPMorgan Chase has been eyeing, the WSJ says. TPG’s holdings would be in part preferred stock, which is safer than common shares.

WaMu has lost so much money on mortgages that it has had problems keeping up federally mandated levels of capital. Those capital levels are what allow a bank to have the cash to give to depositors who want their money back. The Seattle bank has already cut jobs, its dividend, and issued other shares, and its stock is down three-fourths from its peak last year. But the WSJ doesn’t give us much information on the bank’s capital levels. We understand they’re in trouble, but just how much trouble?

TPG’s effort could be viewed as an encouraging sign for the nation’s ailing banking system, and Wall Street will be watching to see whether it is an indication that the worst is over. It comes as virtually every large mortgage company in the country has hit financial distress. Countrywide Financial Corp. had to seek an emergency sale to Bank of America Corp. earlier this year, while others have gone bust amid mortgage losses.

Still, an investment could expose TPG and its partners to a financial hit if the mortgage-market shakeout continues.

The Journal notes that Warburg Pincus made an ill-advised half-a-billion dollar investment in monoline bond-insurer MBIA in December that’s already lost more than half its value.

The paper also says in a separate story on A11 that the deal allows WaMu CEO Kerry Killinger to keep his job, despite the fact that he diluted his shareholders all to heck, after already dropping the stock to levels not seen since the mid-1990s—all this in only a couple of years as WaMu’s top dog.

Balanced right off the rails

The New York Times on its front page has an on-the-one-hand-but-on-the-other-hand story on the effects of globalization, and specifically foreign ownership, in the Midwest.

The paper tells the story of two Michigan factories bought by foreigners. One doubled jobs, the other shipped them to Mexico. This seems to strain evenhandedness: We’re free-trade “skeptics” (to put it mildly), but we’d bet that most Michiganders don’t see free trade and its litany of effects as good for them, and they oughta know. The “good company” the Times profiles is one that was owned by another foreign company before Siemens bought it.

And the Times doesn’t tell us if foreign-owner companies are more or less likely to ship American jobs overseas once they buy their operations. It does say foreign-owned companies pay a third higher on average than American-owned, but doesn’t attempt to explain why that is—if for instance, foreigners own less retail, which pays far less than factory jobs.

Still, the NYT gets our Quote of the Day for something which is either embarrassing or awesome, we’re not sure. Ladies and gentleman, the governor of Michigan, talking about a fridge-maker’s run for the border:

Gov. Jennifer M. Granholm, a Democrat, was bitterly disappointed by Electrolux’s decision to abandon Greenville…

“They said, ‘There is nothing you can do to compensate for the fact that we are able to pay $1.57 an hour in Mexico,’” Ms. Granholm recalled during a recent interview.

“That’s when I started to say, ‘Nafta and Cafta have given us the shafta,’ ” she added, using the acronyms for the North American and Central American free trade agreements.

Bailouts, all around!

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.