Where did all the capital go? Capital is defined as “the wealth, whether in money or property, owned or employed in business by an individual, firm, corporation, etc.”. I understand that people are foreclosing left and right, and the subprime mortgage crisis is putting a kink in everything, but those houses are still there. The value of those houses have dropped, but they are still there. Aren’t they? So where did all the capital go?

Washington Mutual Inc (WM.N), the largest U.S. savings and loan, is close to obtaining a $5 billion injection from investors led by private equity firm TPG Inc, people familiar with the situation said on Monday.

An investment would ease the thrift’s need for capital as losses soar from subprime mortgages and other loans.

A transaction could be announced as soon as Monday, said the people, who declined to be named because they were not authorized to speak.

$5 billion is a lot of money. The fact that investors are pumping that much money into WaMu tells you exactly where all that capital has gone. Down the toilet.

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