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The following post appeared Friday evening on RealMoney. Sign up for a free trial of RealMoney, and enjoy incisive commentary all day, every day.

With the extraordinary destruction of

Washington Mutual

(WM) - Get Free Report

, we only have one problem institution left to be solved.

A month ago I detailed what I called "

black holes

," a term that the companies I described uniformly hated but that has proved all too prescient.

Let's review where we are now:

  • Washington Mutual is gone. This lender, the worst major public lender in the country, should have been seized months ago but got bailed out by TPG in what will now be regarded as one of the worst investments of $7 billion in history. TPG has made so much money I am not worried, but this is a monumental black hole that disappeared overnight.
  • AIG (AIG) - Get Free Report: seized by the government. Many people believe there will be something left after the asset sales and the repayment of the onerous government loan. Hank Greenberg doesn't seem to believe it; he's bailing. Personally, I think that the wraparound insurance just on the European purchases of CDOs will prompt $400 billion to be spent in what will be the real bailout if we don't get Treasury Secretary Henry Paulson's plan passed.
  • Lehmanundefined -- total disaster. There were so many chances to sell this thing between the July 15 short-selling ban and when it went under, but CEO Dick Fuld became the face of the ultimate villain by doing nothing and costing thousands upon thousands of innocents to lose their jobs. It is by no means clear how much hedge fund money has been lost. This decision to let these guys go under rather than pressing Lehman to sell to someone whole has caused the real destruction we keep seeing every day. That money that is locked up had better be returned real soon.
  • Fannieundefined and Freddieundefined were well-capitalized one day and then were bankrupt the next in another colossal misjudgment by the government that wrecked confidence. I think they should have been allowed to be ridden out and the Federal Reserve simply should have issued $200 billion in two-year paper and bought some FNM/FRE paper. Nope, too "bold" for this Fed.
  • Ford (F) - Get Free Report -- gets bailout money, but I believe it still won't make it.
  • GM (GM) - Get Free Report gets bailout money but will be hardpressed to make it.
  • Citigroup (C) - Get Free Report -- this one has to do a deal, it has to. It has to do what Goldman (GS) - Get Free Report did and what Zions (ZION) - Get Free Report did and what Capital One (COF) - Get Free Report did, 300 million shares in the whole. Without it, who knows the fate.

Really I only regard Citigroup as an issue as GM and Ford will get more lifelines as they are too politically powerful. Still, the lesson here is one of colossal stupidity by all involved and shameful executives, regulators and federal officials are all in their jobs, being ineffectual as the apocalypse breaks lose right now.

At the time of publication, Cramer was long Goldman.

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