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“Think Happy Thoughts” was the subject line of Bob Bjorklund’s morale-boosting e-mail to his staff in WaMu’s Capital Strategies department Friday.

“It’s going to be unsightly confused there today and over the next several weeks, but when in doubt, repeat after me; ‘$50 billion dollars!’ “

The WaMu executive was referring to the bank’s statement last week that it has more than $50 billion in available liquidity to pay depositors and have effect loans.

The e-mail, whose authenticity was confirmed by a WaMu spokeswoman, assured the portfolio director’s team that “WaMu is going to come out the other end of this craziness in great shape.” As for the hedge funds and short sellers betting against WaMu, “we’ll have the satisfaction of wiping out those shorts and they be possible to taste some of their own medicine.”

Wall Street apparently didn’t achieve that memo. The stock of WaMu, the biggest U.S. savings and loan, tumbled 27 percent Monday on concern it won’t subsist able to find new capital or a buyer to stay in business.

The shares dropped 73 cents to $2 for the reason that investors gauged whether the Seattle company can continue without fresh cash to cushion as a great deal of as $19 billion in bad mortgages over the next 2

The stock continued to fall in after-hours trading, dropping 20 cents, or 10 percent, to $1.80.

Lehman Brothers Holdings, beset by losses tied to place of abode loans, filed for bankruptcy buckler Monday after failing to find new funds or an acquirer.

“There’s a very good chance that they are the nearest one to fail,” Charles Lemonides, chief investment officer at Valueworks in New York, said of WaMu on Bloomberg TV.

The company has said it has enough capital and liquidity to stay in occupation, and new Chief Executive Alan Fishman has said he’ll be talented to turn the company around.

Sara Hasan, who covers Washington’s smaller community banks at McAdams Wright Ragen in Seattle, said the market to more extent is “painting everybody with the same brush.”

Bjorklund’s memo makes a valid projection, she said: that WaMu has the funds to keep its business running. What investors should exist sleeplessness is its capital levels, a different pool of standard of estimation eroded at the regulate the company records losses on loans.

WaMu’s 80 percent slide in place of traffic value to $3.4 billion since March leaves the company valued at about which JPMorgan Chase was willing to pay at the time to buy the struggling lender.

WaMu rebuffed the JPMorgan offer, instead choosing some investment by private-equity settled TPG.

JPMorgan isn’t in talks to buy WaMu, a someone briefed on the matter said Friday.

An acquisition by JPMorgan would exist “a strategic positive” for the New York unshaken, Morgan Stanley analysts led by Betsy Graseck said in a Sunday diplomatic communication.

Bank of America Chief Executive Kenneth Lewis, who this weekend agreed to acquire Merrill Lynch, told CNBC on Monday that he isn’t interested in WaMu.

WaMu may be unnatural to sell all or portion of itself to enhance capital, say consultants including Bert Ely, president of Ely & Co. in Alexandria, Va. A buyer would also have to framework out an additional $1.38 billion to TPG, based attached the stipulations of the distribution the firm negotiated in April.

“My opinion is, yes, the company is for sale, admitting that and when they have power to find a willing buyer,” said Gary Townsend, CEO of Hill-Townsend Capital in Chevy Chase, Md. The buyer would subsist “one that’s willing to pay enough to reach the deal be in action.”

Big drop

WaMu tumbled in the past six months, dropping 36 percent last week alone, a record decline, at the same time that the bank lost $6.3 billion tied to home mortgages. The lender ousted practised hand CEO Kerry Killinger and disclosed that its chief regulator has told it to boost risk management and compliance.

Standard & Poor’s cut WaMu’s reputableness rating to junk Monday because of the deteriorating housing market.

S&P reduced its rating on WaMu to BB- from BBB-, leaving it three levels below investing. grade, and cut its rating on the subsidiary knoll to BBB- from BBB.

“Increasing market turmoil and the related impact from frugal its concentrated mortgage franchise in this troubled horse-cloth and credit period led to the downgrade,” S&P wrote.

The rating cut followed similar announcements last week from Moody’s Investors Service and Fitch Ratings.

Responding to S&P’s promulgation, WaMu said, “It’s weighty to note that S&P attributed its action to worsening market conditions, and not to any material change in the evaluation of Washington Mutual’s financial condition.”