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Tickers in this Article: GS, C, WB, DSP, GHC
Big moves up and down in share prices need to be supported by increasing volume or the move will rarely be sustainable. One way to determine strong trends and get on board long upward or downward moves is to look at stocks that are trading a large amount of volume early on in the day, when compared with their average volume. This will help us set the best moves apart from the rest. (For background reading, see Volume Rate Of Change.)

Here are three stocks that were trading on very large volume by noon today. Let's take a closer look at one that has seen a large share price change as well.

Company
Shares Traded*
% of Average Daily Volume
(3 month)

SP Acquisition Holdings(NYSE:DSP)
504,189
1,039%
Wachovia(NYSE:WB)
329,269,728
327%
Global Consumer Acquisition Corp.
(NYSE:GHC)
128,363
96%
* Data as of 10:00am EST September 29, 2008
Deposit Holders become the Hunted
Banking with a brand name financial services firm one day doesn't mean that you'll be banking with the same financial institution the next. The financial downturn affecting investment and commercial banks has given the universal bank Citigroup (NYSE:C) the opportunity to acquire the banking operations of Charlotte-based Wachovia (NYSE:WB). While the Wall Street bailout is still under debate on Capitol Hill, the redistribution of ownership, blame and financial assets continues to take shape.

What Happened?
In August of 2006 nearing the tail end of the U.S. housing boom, Wachovia purchased Golden West Financial Corporation, parent of World Savings Bank. World Savings Bank offered homebuyers a Pick-A-Payment loan option payment plan. The Pick-A-Payment loans gave mortgage borrowers the choice to pay between a range of options from making payments against principal and interest, to paying only a portion of the interest due on a loan. The timing of Wachovia's acquisition put it in harm's way as the economic downturn was beginning. (For more on these mortgages, read The Fuel That Fed The Subprime Meltdown.)

Effects of the Weak Economy
The overall slowdown in the economy, the devaluation of home prices and a rise in foreclosures led Wachovia to report an $8.4 billion loan loss provision for the first half of 2008 driven largely by its Pick-a-Payment mortgage portfolio. While net charge-offs were much lower than anticipated at $2.1 billion derived from a combination of commercial loan, Pick-a-Payment and auto loans Wachovia's nonperforming assets increased from $5.4 billion last year to $12 billion for the first half of 2008. The $12 billion was directly tied to consumer behavior of Pick-a-Payment loan holders who watched the equity in their homes deteriorate with falling home prices. Wachovia CEO Robert Steel noted that the sale to Citigroup was the best solution to deal with the losses related to the Golden West Portfolio of loans. For the first six months of the year Wachovia reported a net loss of $9.8 billion compared with net earnings of $4.6 billion at the halfway point in 2007.

What Happens Now?
Wachovia Corporation will sell its retail bank, investment bank and wealth management business to Citicorp for $2.1 billion. Wachovia Corporation will retain Wachovia Securities, its brokerage arm, and Evergreen Asset Management. Evergreen Asset Management has more than $245 million in assets under management as of June 2008. Two of Wachovia's directors will join Citigroup's board and the deal is expected to close before the end of the year. At the end of June, Wachovia had $392 billion in core assets.

Final Thoughts
It's worth noting that Goldman Sachs (NYSE:GS) served as one of Wachovia's investment bankers on the deal. Goldman's presence signifies that while the financial sector is languishing in debt, the process of reorganization still requires a unique insight into the financial landscape that only a few institutions can provide. It may be those places where investor can find the best opportunities to invest.

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