JPMorgan Eying WaMu?

Peter Cohan, president of consulting firm Peter Cohan & Associates, says that a JPMorgan-Washington Mutual deal would be logical. "I think it's an obvious response to match a BofA-[Countrywide] deal," he said in an email, "And it looks like the market thinks it's in play."

Although not a pure mortgage player, Seattle-based Washington Mutual has found itself steeped in mortgage loans that have dragged down its overall business. As a result, the Seattle-based company has seen its profits wane, forcing it to slash its dividend by more than half to 15 cents, as it pounds the pavement to raise cash. The bank has stated it expects to write down $1.6 billion of goodwill in the fourth quarter and raised its estimated provisions for first-quarter loan losses to about $2 billion.

Meanwhile, JPMorgan has so far escaped many of the missteps of its peers, including Citigroup (C) and Merrill Lynch (MER), both of which have wrote down billions due to bad mortgage-related bets. As a result, JPMogran has been on the prowl to build up its business as some of its rivals flounder.

Dimon has stated several times during conference calls that he was intent on expanding JPMorgan's mortgage platform to take advantage of the ever-shrinking number of viable players in the business.

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