noworldsystem.com

Investors who plowed money into Wachovia Corp. and Washington Mutual Inc. last week after competitors posted better-than-expected quarters may find out tomorrow if that was a good idea when the two lenders report their own results.

Wachovia and Washington Mutual may have combined second- quarter losses of $3.8 billion, according to analysts surveyed by Bloomberg. Wachovia, the nation’s fourth-biggest bank by assets, and Washington Mutual, the largest saving and loan, rank among the top providers of “option-ARM’’ and subprime mortgages that now have some of the highest default rates.

“These are certainly troubled companies that aren’t going to improve anytime soon,’’ said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees $65 billion. “I still would need to see the banking sector as a whole show some sort of fundamental improvement’’ along with better housing data, he said.