Citi & Morgan With Knives Out

Waiting to cut into the Washington Mutual (WM - Snapshot Report) pie, according to an earlier Wall Street Journal report, is remaining U.S. banking giant Citigroup (C - Analyst Report), with rival JP Morgan Chase (JPM - Analyst Report) apparently waiting in the wings.  Only swirling rumors at this hour, but JPM stock is up 12.5%, or $5 per share, already this morning.  Citi shares are up a gladdening 22%, to roughly $20.40.  Then again -- holy Moses, what a rally!

Both financial institutions have seen share prices drop in this most momentous time period in the markets.  But Friday's jump is a bright ray of sunshine on such a cloudy week.

Analysts seem to have exhausted downward estimate revisions for the company's September quarter and fiscal 2008.  JP Morgan, on the other hand, has seen further downward revisions to quarterly estimates.

The question will be whether WaMu goes under before Citi and Morgan dig in.  Or would carving up pieces while the entree is still warm be a better way to go?