Volkswagen Falls Most Since 1989 on Short-Selling

Oct. 20 (Bloomberg) — Volkswagen AG fell the most in almost two decades, counter to a rising German market, as investors short-sold the shares on speculation that the price will decline once Porsche SE gains control of Europe’s biggest carmaker.

Volkswagen’s common shares fell 80.91 euros, or 23 percent, to 277.09 euros, the biggest decline since at least January 1989. The preferred shares lost 3.85 euros, or 5 percent, to 73.10 euros. Short-sellers borrow stock on expectations they can repurchase the shares later at a lower price.

“VW is completely caught in a short-selling frenzy,” said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler who recommends selling the stock. “The share price has been detached from reality for at least six months. These erratic moves lack any fundamental explanation.”

Common shares in Volkswagen have surged 78 percent this year, helped by a 27 percent increase on Sept. 18 when investors bought stock to stem losses on their short-selling strategy. The Sept. 15 collapse of Lehman Brothers Holdings Inc., which lent Volkswagen shares to short-sellers, helped trigger the so-called short-squeeze by forcing the original owners of the stock to buy new shares, people familiar with securities lending said earlier this month.

About 15 percent of Wolfsburg, Germany-based Volkswagen’s common shares as of last month were lent, mostly for short-sales, according to London-based research firm Data Explorers. That was the highest proportion of any company on Germany’s 30-member benchmark DAX Index.

Read moreVolkswagen Falls Most Since 1989 on Short-Selling

Worst slump since Great Depression

Major industrialised economies will suffer the worst slump since the 1930s, according to new research from Deutsche Bank.


Worst slump since Great Depression: Bud Fields and his family in their home during the Great Depression in Alabama, 1935. Photo: Corbis

The warning underlines the fact that policymakers have failed to prevent the financial crisis from turning into a full-blown economic slump. It comes as world leaders agreed to hold a summit in New York billed as the “Bretton Woods meeting for the 21st century”.

In its major assessment of the global economy’s health, Deutsche Bank also warned that Britain is even more vulnerable than the US or the euro area, as it predicted that the powerhouses of India and China would fail to support the wider global economy through the downturn.

The banks’ economists Thomas Mayer and Peter Hooper said: “We now expect a major recession for the world economy over the year ahead, with growth in the industrial countries falling to its lowest level since the Great Depression and global growth falling to 1.2pc, its lowest level since the severe downturn of the early 1980s.”

According to the International Monetary Fund, global growth of anything less than 3pc constitutes a world recession. The warning was echoed by Richard Berner of Morgan Stanley, who said: “A global recession is now under way, and risks are still pointed to the downside for commodity prices and earnings.”

Read moreWorst slump since Great Depression

The International Interphone Study Confirms: The Use Of Mobile Phone Is Carcinogenic

The official publication of the first intermediate results of the International Interphone Study from the International Research Centre on Cancer (CIRC) dependent on WHO confirms the increased tumors and cancer cases due to the use of mobile phone.

The Use Of Mobile Phone Is Carcinogenic: Here (PDF)

INTERPHONE Results latest update Oct. 08, 2008: Interphone Results Update (PDF)

Related articles and videos:
2 Billion may suffer from Mobile Cancer by 2020: Study
Dangers of the wireless cell phone wi-fi and emf age – Dr. George Carlo
The Cell Tower Cancer Link
Warning: Using a mobile phone while pregnant can seriously damage your baby
Cook an Egg with Your Cell Phone
Make Popcorn With Your Cell Phone
The REAL brain drain: Modern technology – including violent video games – is changing the way our brains work, says neuroscientist

CNN’s Glenn Beck and Peter Schiff: Inflation Nation and Martial Law


Added: Oct. 13, 2008

Source: YouTube

Europe stuns with €1.5 trillion bank rescue, as France plays role of saviour

Germany, France, Italy, Spain, Holland and Austria have joined forces to launch the greatest bank bail-out in history, offering over €1.5 trillion in guarantees and fresh capital in a “shock and awe” blitz to halt the credit panic.


French President Nicolas Sarkozy Photo: PHILIPPE WOJAZER

The move – unveiled simultaneously in the six states to maximise the show of unity – throws the full weight of the eurozone behind global efforts to stem the crisis.

The move gave a tremendous boost to bourses across Europe, lifting the Euro Stoxx index by 9.53pc in the biggest one-day rally ever.

The pan-European plan – totalling over $2 trillion, or £1.17 trillion – completes the third leg of a dramatic restructuring of finance across the Western world. Sovereign states have now absorbed the brunt of the credit risk in half the global economy.

Read moreEurope stuns with €1.5 trillion bank rescue, as France plays role of saviour

Europe to US: You messed up the rescue, too

The plans for a massive bank bailout by European governments differ strikingly from the U.S. approach.

PARIS (Fortune) — First you mess up the world’s financial system. Then you blow the rescue of it. Now let’s show you how to do it properly.

That, in a nutshell, is the less-than-flattering message European governments are sending to the U.S. as they mount their own gigantic bank bailout. The plans, announced Monday after two weeks of dithering, involve Britain, Germany, France and some others recapitalizing national banks that require help, and providing state guarantees and other measures to kick-start the stalled credit market. The details are strikingly different from the U.S. approach adopted by U.S. Treasury Secretary Hank Paulson and the Federal Reserve Board. And there’s a big reason for that: The Europeans think Paulson got it badly wrong, and have watched aghast as he failed to restore confidence in the world’s financial system.

Read moreEurope to US: You messed up the rescue, too

EU Nations Commit 1.3 Trillion Euros to Bank Bailouts

Oct. 13 (Bloomberg) — France, Germany, Spain, the Netherlands and Austria committed 1.3 trillion euros ($1.8 trillion) to guarantee bank loans and take stakes in lenders, racing to prevent the collapse of the financial system.

The announcements came as Britain took majority stakes today in Royal Bank of Scotland Group Plc and HBOS Plc. The coordinated steps followed a pledge yesterday by European leaders to bolster market confidence as the global economy slides toward recession.

“What it should do is stabilize the banking system,” said Peter Hahn, a fellow at London’s Cass Business School and former managing director at Citigroup Inc. “Will it stop us from having a recession? No, nothing is going to stop us from having a recession.”

Read moreEU Nations Commit 1.3 Trillion Euros to Bank Bailouts

Germans Stockpiling Gold Amid Market Panic


Gold dealers can’t keep up with the demand

German gold dealers have stopped taking new orders for the precious metal as demand has skyrocketed. Gold is seen as a safe investment during the market turmoil.

In uncertain economic times, Germans are dumping stocks and shares to take refuge in precious metal, accoring to a Wednesday article in a Berlin newspaper.

German gold dealers report running low on stocks of gold bars and coins.

Read moreGermans Stockpiling Gold Amid Market Panic

Only state intervention can save us now, says Merkel

BERLIN: Only the state can restore trust to financial markets now, German Chancellor Angela Merkel was quoted as saying on Sunday amid reports that Berlin was about to unveil a huge rescue package for its banks.

“Only action by the state is capable of restoring the necessary trust,” Merkel was quoted as saying by the Bild am Sonntag weekly following talks on Saturday in France with President Nicolas Sarkozy.

“In this it is important that countries do not act unilaterally but that we coordinate at European and international level and then implement the measures within our national responsibilities,” Merkel said.

Read moreOnly state intervention can save us now, says Merkel

Germany’s Car Industry Crashes

For years, Germany Inc.’s best promotional vehicles have been the world-class luxury cars the country produces. Shiny Audi, BMW and Mercedes-Benz cars are like mobile billboards for excellence, from New York to Moscow, Buenos Aires to Shanghai.

But as the global financial crisis begins to take its toll on the real economy, Germany’s export machine has hit a wall. German exports fell 2.5% in August, the sharpest fall since 2003, as consumers and companies around the world cancel orders for everything from high-end industrial equipment to chemicals.

The car industry, still Germany’s biggest employer, is the worst hit. High gas prices in key markets such as the U.S. have slowed sales for months. Some consumers have been waiting for more fuel-efficient models, while many more are now delaying new purchases because of uncertainty over their jobs. Thanks to the credit crunch, even people who want to buy are finding finance has dried up.

All that spells trouble for the likes of BMW, Mercedes Benz, Porsche, Volkswagen, Ford Europe and General Motors’ Europe arm, Opel. Ferdinand Dudenhoffer, a respected industry analyst, predicts that the number of new German cars delivered to customers in 2008 will fall by at least 100,000 units to around 3.1 million, and will likely slip below three million next year. As a result, he says, German car companies will have to cut up to 20,000 jobs over the coming year.

Read moreGermany’s Car Industry Crashes