Let's see ... now it's Wachovia's turn on the griddle.

The Charlotte, North Carolina, bank, which just a week ago was rumored to be courting a merger with Merrill Lynch, is now reported to be talking with a brace of potential suitors, including Citigroup, Wells Fargo, and Banco Santander of Spain.

The New York Times Dealbook blog opened the speculative gates, reporting that Wachovia has "begun preliminary talks with Citigroup about a potential merger." DealBook attributed the news to unnamed people briefed on the matter.

The Wall Street Journal quickly followed, expanding the list of potential inquirers to include Wells Fargo and Banco Santander.

The reports came a day after federal regulators took over the floundering thrift Washington Mutual and sold off most of its assets to J.P. Morgan Chase; it was the biggest bank failure in the nation's history. WaMu, as the thrift was known, was crippled by its exposure to the poisonous market for subprime mortgages.

Wachovia is also deep into that market. DealBook says CreditSights, a research firm, reckons that Wachovia holds about $120 billion of particularly problematic loans called option adjustable-rate mortgages. These loans were made with low initial interest rates, allowing marginal borrowers to buy homes; once the special introductory rates expire and monthly payments jump, many of these borrowers are falling behind in their payments or simply stop making them.

WaMu's failure weighed heavily on Wachovia's stock, which fell by 27 percent on Friday. The depth of investors' anxiety was apparent in the number of Wachovia shares that changed hands: more than 323 million, three times the average daily volume.

Since the start of 2008, Wachovia stock has lost three-fourths of its value.