Volkswagen Europe’s largest car-maker shares surged on news that Porsche SE was planning to raise its share in the car manufacturer to 75 percent. Wolfsburg the Volkswagen common share prices were sent soaring over four times it value. Volkswagen are also the shortest stock on in the German benchmark DAX index.

The common share price in Volkswagen jumped as high as 296 billion euro’s ($370 billion) this price exceeding Exxon Mobil Corp’s $343 billion in New York yesterday at close according to Bloomberg.

The huge gains followed the announcement made on October 26 by Porsche to increase its holding in Volkswagen from 42.6 percent to 75 percent, these spurring short-sellers to buy from a shrinking pool of stock to close their positions.

Now BaFin are monitoring Volkswagen but have not as yet began a formal probe, although the regulators will investigate, this has angered some financial experts, who believe that the investigation should have already been underway claiming that it was without doubt an example of market manipulation and that the Porsche stake-building process is vague.

Source: Bloomberg

Ian Morris from HSBC talks of how America have hit an all-time low in Consumer Confidents. With October seeing a massive decline to 38 (mkt) which is the lowest reading on Consumer Confidents since series began in 1967.

Jobs hard to get index surged and jobs plentiful index was hit, which leads us to believe the next payroll report will be extremely bad with HSBC – 230k but the risk may be – 300K.

The expectations component at 35.5 is also in a bad way, and the fear here is that it compares with consumption very well, so if we suggest – 4 percent consumption growth. We also have – 3 percent for the third quarter and -0.5 percent for the fourth Quarter which is partially aided by the oil price drop, but the risk now is for a weaker fourth quarter.

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Dow Jones Industrial Index jumped up above 9,000 points on Monday being its largest one-day gain ever. Great news as Apple, Dell, Microsoft and a list of other tech companies all obtained double digit gains.

After the Dow Jones suffered consecutive losses last week, the Dow soared yesterday 936.42 points and finally closing on Columbus Day at 9,9387.61 it seemed Wall Street finally got something to smile about amid the financial turmoil that America and the rest of the world been ingulfed in.

With the announcement that US treasury have agreed to buy some bank stocks and central banks agreeing to inject more funds into the US financial institutions this has all made for a happy investor or at least a less fearful one.

RIM, Dell, Cisco, Oracle, Apple and Microsoft helped fuel the Nasdaq who have posted gains for the last few days shooting up 197.74 points to close yesterday at 1,844.25.

Source: zdnet

Ben Bernanke had made this decision on Tuesday, which does hint at the Fed’s growing concern over policymakers who face a tough financial strain, which looks set to continue for some time to come.

Recently, access to emergency funds like this was only available for commercial banks such as JPMorgan and Citigroup, so it does show that the Fed is there to help after all, let us hope that it is not too late for some of them.

It is thought that this move from Mr. Bernanke will help to ease the worries of Wall Street, showing that the Federal Reserve are there to help investment banks who are finding things hard in this credit crisis.

Things did not look as bad for U.S. stocks on Tuesday; we reported yesterday that the dollar picked up against the Euro and that a barrel of crude oil had seen its sharpest fall in months.

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With all the recent troubles IndyMac Bancorp Inc., has had to stop its lending as the losses were building up quickly while capital deteriorated, the U.S. mortgage company has blamed Senator Charles Schumer for “elevated levels of deposit withdrawals.”

As we reported earlier IndyMac are having to fire half of their staff and are now working with regulators, in the hope of coming up with a new business plan after they failed to raise capital. If the demise of IndyMac does come to fruit, then this would be the biggest bankruptcy since American Home Mortgage Investment Corp, in August 2007.

IndyMac are having a tough time on the stock exchange, as of 4 p.m. their shares fell 27 cents to 44 cents, this has now reduced the value to $44 million, back in the middle of 2006 IndyMac was worth more than $3.4 billion.

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As at 8:38 a.m, the stock in B&B has fallen 26% to a new low of 32.5 pence, this is far below its planned rights issue price of 55p. These losses are now a worrying concern for the bank.

The worrying factor in all this was that Bradford & Bingley management had pinned their hopes on a £400 cash injection, which as we know has fallen through.

It is not just B&B who has had shares problems this morning, many companies in the banking sector across the UK and European have also fallen.

This is as a result of worrying concerns over the economic outlook which are being tracked overseas in the U.S. and the Asian markets.

We now have to hope that Bradford & Bingley management have a Plan B set up in place.

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This recent drop in value has now raised the prospect that the retail shareholders could snub the bank’s rights issue; this could be a serious problem for B&B as this is vital to propping up their bank sheets.
This cash injection was vital for Bradford & Bingley, but now with the current stock plunge they will now find it even harder to get the cash that they need from small investors.

TPG were all set to purchase a 23% stake for B&B which was a sum of £179 million, another £250 million was going to be via a rights issue. Another deal before this for £300 had already fallen through.

B&B executive chairman, Rod Kent, along with their advisers Goldman Sachs has received much criticism for telling their shareholders that the deal with TPG was watertight. However; the deal seemed to depend on if there was a ratings downgrade, then TPG had the choice to pull out of the deal.

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