Tomorrow, the subcommittee will release more than 500 documents on Washington Mutual, the $300 billion bank that helped fuel the subprime bubble and then collapsed in the biggest bank failure in U.S. history. It will also hold a hearing with WaMu executives, including Kerry Killinger, the former chairman and chief executive officer. Then, on Friday, the subcommittee — headed by Sen. Carl Levin (D-Mich.) — will release an investigative report, the fruit of 18 months of labor, into how the Main Street bank took on and eventually died due to Wall Street practices.

Details about the report started to emerge today. The company decided in 2003 to move aggressively into subprime lending to bolster earnings, ultimately producing $77 billion in mortgage-backed securities. The company changed pay practices to prize quantity over quality. And it “built a conveyor belt to dump toxic mortgage assets into the financial system like a polluter dumping toxic substances into the river,” Levin told reporters. Expect ugly revelations all week.

The reality that banks are closing down — and the fear of more failures ahead — must be seeping into the popular culture. Today I told my 8-year-old daughter that we would set up a bank account this week for her allowance. She was quiet for a moment, and then asked, “But what if the bank fails?”

Apparently the talk of the third grade is that there’s another Great Depression on the way.

I guess an additional challenge for parents facing shrinking retirement and college savings accounts is finding a coherent way to explain the global financial crisis to children.

WaMu was one of the more notorious subprime lenders – remember this pool of WaMu Alt-A loans we talked about last spring, the one where all the loans were quickly going into default? – so its failure wasn’t unexpected. But as Steve Waldman at Interfluidity points out, why was WaMu seized by the government on a Thursday? The Federal Deposit Insurance Corp. uniformly announces bank failures at the end of the day on a Friday, to reorganize things for Monday and to avoid setting off any bank runs or panic.

But WaMu’s demise comes out in the midst of tense negotiations over a $700 billion bailout of Wall Street that the Treasury Department and the Bush Administration say are desperately needed to stabilize the nation’s financial system. An agreement on the bill seemed on track early Thursday, but by the evening the talks had imploded.

Admitting it’s possible he’s just another conspiracy theorist, Waldman nonetheless can’t help asking the question the Thursday failure begs: Why did Friday come early this week, of all weeks

I am dark. Secretary Paulson could have offered any number of proposals to help ensure that this collapsing house of cards is a controlled demolition. He and Dr. Bernanke had months to put together policy options, long months between the fall of Bear and the fall of Lehman to create orderly processes for disorderly events they knew could come. At the last moment, they offered one option, a particularly unpersuasive plan imperiously presented as a fait accompli. When Congress balked, they relented and offered a few crumbs so that the people we elected could nibble at the edges without altering the core. And today, when it looks like those crumbs might not have been enough, we have the largest bank failure in American history, announced, oddly, on a Thursday night

When all this is over – I say that with a sense of hope rather than any proof that there’s some good ending here – the timing of both the Treasury plan and the WaMu seizure will be scrutinized closely. Shut down a bank when you don’t normally do in the middle of a pitched battle and you’ve raised some serious questions. Are the markets really that close to failing? Or does the government just want its way?