IMPEACH BUSH

Washington Mutual, the struggling savings and loan, has put itself up for auction, people briefed on the matter said Wednesday.

The unsurprising announcement comes as the bank, which has suffered badly from losses on mortgages it had made, continues to stumble. Shares in Washington Mutual fell nearly 10 percent on Wednesday to $2.09; they have plunged 94 percent over the last 12 months. This week alone, investors have been frightened by Standard & Poor’s cutting of the bank’s debt rating to junk.

Goldman Sachs, which Washington Mutual has hired, started the auction several days ago, these people said. Among the potential bidders that Goldman has talked to are Wells Fargo and HSBC.

TPG, the private equity firm that led a $7 billion cash injection into Washington Mutual in April, said Wednesday afternoon that it would waive its right to be compensated if the bank sold more shares to raise capital. "Our goal is to maximize the bank’s flexibility in this difficult market environment," TPG said in a statement.

The April deal gave the investing group roughly 822 million new shares, diluting existing shareholders by nearly 50 percent. TPG bought shares for roughly $8.75 each. Those shares have since fallen to $2.14 a share, meaning that the value of the investor group’s holdings at Tuesday’s close had declined 75.5 percent.

While the bank has a strong deposit base, the uncertainty of the markets and the increasingly poor housing market have increased concerns about Washington Mutual's outlook. The bank plunged into the option adjustable rate mortgage business.

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