We aren’t sure if there is more confusion over whether or not the New York Observer will sell, or over what color the newspaper actually is.

Bruce Wasserstein’s interest in the New York Observer is cooling, according to a source close to the situation.

Allen & Co. is handling the sale for the Observer’s founder and longtime owner, Arthur Carter. The peach-colored weekly has carved a niche covering the media elite and the political and society whirl in uptown Manhattan ???????? but it has never rung up a profit. Currently, it is said to be losing about $2 million a year.

Keith Kelly reports that Harvey and Bob Weinstein, don’t want the Observer, nor do Mort Zuckerman and Jeffrey Epstein. Michael Steinhardt? Nope — he doesn’t want it either.

But, the same rumors have been swirling for months, with the same reporting mistakes being made. Obviously learning nothing from the crap everyone gave David Carr when he labled the paper “pink,” Kelly describes the paper as “peach.”

Since we know it has been decided that the official cover of the Observer is “salmon,” we just don’t know how much of these stories we actually believe.

BRUCE LOSES JUICE [Keith J. Kelly, NYP]