BusinessWeek is reporting Regulators gauging other banks’ interests in WaMu.

The U.S. government has been reaching out to large banks in an effort to organize a buyout of the beleaguered Washington Mutual Inc., according to a person briefed on the talks between regulators and banks.

The obstacle, however, is that “no one knows what’s in their books,” the person said, speaking on condition of anonymity because of the sensitivity of the matter. There could be, he said, “a minimum amount of value there.”

A New York Post report Wednesday citing unnamed sources said regulators have reached out to Wells Fargo & Co., JPMorgan Chase & Co. and HSBC Holdings PLC, among other institutions.

No Interest In Washington Mutual

There is a reason for lack of interest in Washington Mutual (WM) and the reason is simple: WaMu is worth as much as Lehman common (LEH), Fannie Mae (FNM) common, and Freddie Mac (FRE) common, which is to say a big fat zero.

Except at gunpoint (shotgun marriage), no buyer in their right mind should have any interest in Washington Mutual (WM), Corus Bank (CORS), Bank United (BKUNA), Downey Financial (DSL), and no doubt dozens of other banks as well.

While we are discussing the living dead, we may as well toss in General Motors (GM), and Ford (F) both of which are begging for a Fed (taxpayer) bailout and likely will not survive without one.

Mike “Mish” Shedlock
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