Oh dear. It’s all gone a touch pear-shaped at Bradford & Bingley. Last night private equity outfit Texas Pacific Group walked away from the bank’s reshuffled rights issue after credit rating agency Moody’s revealed it was about to downgrade B&B’s rating, taking its £179m funding injection with it.

Fortunately Bradford’s biggest shareholders, including M&G, Legal & General and Standard Life, have come to the bank’s aid and it will continue to raise £400m at 55p in a rights issue underwritten by UBS and Citigroup. But the rescue package didn’t stop Bradford’s shares from plunging 15 per cent at one point this morning to below the rights issue price. They have since stabilised to 55.75p but are still down 9 per cent.

Mike Trippitt, analyst at Oriel Securities, downgraded his recommendation on the shares to reduce and believes there is further downside risk for the shares, despite the recent poor performance. However, some City pundits argue that the new arrangement may be a “blessing in disguise” as some shareholders were unhappy with the TPG tie-up.

Meanwhile, Cityblogger must bid you a fond farewell as he is hanging up his quill to focus more fully on salvaging his ailing investment portfolio. Many thanks for your support and comments over the past year. It’s been delicious fun.

Good luck, my friends, and take good care in these choppy markets.

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Corporate life hangs in the balance for Taylor Wimpey which sacked its finance director today after it failed to secure rescue funding. The ailing house builder, which doesn’t expect tough trading conditions to improve any time soon, runs the risk of breaching banking covenants if the housing market gets any worse. Shares in the company halved this morning, hitting 30p. In total they have lost 91 per cent of their value over the past 12 months. And to add insult to injury, other weak performing house builders’ shares felt the collateral damage, with Barratt and Persimmon also down 23 per cent and 17 per cent respectively.

Chris Millington, analyst at Numis, cut his target price on Taylor Wimpey’s shares to a mere 60p from 248p, but even that seems a tad optimistic now in light of this morning’s slide. Mr Millington reckons that despite the dire performance of house building shares this year and the grim outlook, value is out there but is better pursued through Berkeley and Bellway.

Meanwhile, Cityblogger notes Marks & Spencer shares are feeling the heat after the retailer shocked the City with an unexpected profit warning. Like-for-like UK sales (over the 13 weeks to 28 June) declined by 5.3 per cent and the shares are down a painful 20 per cent today. The retailer has also sacked its food director after food sales slid by 4.5 per cent. Chief executive Stuart Rose, who is expected to become chairman soon despite opposition from corporate governance groups, blames falling consumer confidence and told the BBC’s Today Programme that he believes inflation for the “average man in the street” is far higher than 3 per cent.

Eithne O’Leary, analyst at Oriel Securities, rates M&S shares as a sell. She fears that the sharp drop in like-for-like general merchandise sales shows there is a problem with M&S women’s wear. “But the killer blow is management's inability to predict the gross margin, a fact that will worry those like us who fear inflationary pressure can’t be passed on,” she points out. Ms O’Leary believes there are “no quick solutions” for M&S and that the retailing sector as a whole will suffer the fallout of this profits warning.

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The sun may be shining – as he writes Cityblogger is busy smearing himself with cut price BOG-OFF sunscreen in a nod to the credit crunch - but the lacklustre markets continue to cast a shadow over our summer.

After a reasonable day yesterday, following Friday’s sea of red, the FTSE100 is down more than 2 per cent this morning and currently stands at 5,496. More gloom on the housing market front is largely to blame. The latest report out today from building society Nationwide says that house prices declined for the eight consecutive month in June, falling 0.9 per cent and standing at more than 7 per cent lower than the house price peak in 2007. True, this price decline compares favourable with the sharp 2.5 per cent fall in May. But with the lowest number of new home loan approvals recorded by the Bank of England in May, economists foresee more doom and gloom on the horizon, such as a likely fall in consumer spending which could hit other sectors of the economy besides the property market and house builders.

Carpetright’s chairman Lord Harrison complained to investors this morning that 2008 will be the most difficult year for flogging carpets that he has experienced for 50 years. The retailer issued a profits warning alongside its full year results and the shares dipped by 6 per cent. Shares in HMV were also down 7 per cent despite a seemingly upbeat set of results, with profits up 25 per cent. But analysts are concerned that despite the impressive turnaround by the retailer, in the long term it still faces sales erosion from internet music downloads.

On the bright side, beleaguered Barratt Developments has received a welcome lift. Shares in the struggling house builder bounced upwards by 7 per cent this morning to 62.25p, following rumours the company is close to securing funding from lenders which will enable it to relax its banking covenants and weather the property storm.

Meanwhile, the City waits with baited breath for the Bank of England’s rate decision due next Thursday, but insiders widely expect there to be no change. “[It’s likely] we’ll stay where we are until the end of the year,” David Buik at BGC Partners told Cityblogger this morning. “There is a school of thought that if the economy gets into real problems then we could see a cut in October and then in November, but I imagine [the MPC will say] that we have to have the pain before we have the gain.”

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It's a veritable blood bath out there today in the markets. If yesterday wasn't a bad enough day on the FTSE100, the index slipped below the 5,500 mark this morning, hitting the miserable depths of 5,483, although it has since clawed back some ground to reach 5,533. But 5,483 marks a two year low for the index. Heavy selling on the US and Asian markets are to be to blame, as well as worries about consumer spending and the soaring price of crude oil, which touched $142 a barrel today.

And frankly Cityblogger believes it's hard to see this volatility ceasing in the near term. There's simply no confidence or appetite for risk out there, and it's unlikely to change any time soon, until we have some really palpable positive economic news.

Market misery aside, Cityblogger wishes you a relaxing and pleasant weekend.

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Retail sales figures released last week may have been surprisingly upbeat, so much so that the Bank of England’s Monetary Policy Committee members were left scratching their heads in bewilderment as to why consumers had shopped ‘til they dropped in May to produce the biggest monthly increase in retail sales since 1986. But Cityblogger notes that it’s a different story today. The FTSE100 is down more than 30 points, despite the US Federal Reserve leaving rates on hold yesterday evening at 2 per cent, and it’s all due to worries about retail and the continuing consumer slowdown.

Investors are jittery after DSG unveiled a painful slump in profits this morning due to large impairment charges relating to a reshuffle of its Italian arm. The company behind electrical goods brands Currys, Dixons and PC World, revealed that underlying profits for the full year to 3 May 2008 fell a whopping 30 per cent to £205.3m (from £295.1m in 2007) this year. And these figures, while admittedly in line with expectations, came despite an 8 per cent hike in sales compared to (£8.5bn) those posted last year (£7.9bn in 2007). Slightly worryingly, DSG had little to say on the subject of current trading besides pointing out that conditions are “challenging” and that the economic backdrop “continues to be difficult”. All of which concerned some analysts.

Ramona Tipnis, analyst at Oriel Securities, reiterated her sell recommendation on the shares. She believes that while they trade on a relatively undemanding price earnings multiple for 2009, there could more gloom in the offing. “There is more downside to come given the deteriorating trading outlook,” she says. However, Nick Coulter at broker Numis is slightly more optimistic, raising his recommendation from reduce to hold, although he also cut his target price on the shares from 52p to 45p and admits that pressure will continue to fall on the high street and electrical goods in particular.

DSG shares fell just under one per cent but later recovered, rising just over 1 per cent, while shares in Marks & Spencer, Tesco, Carphone Warehouse and Next dipped in sympathy.

Elsewhere in the markets, the banks continue to receive a pounding. Shares in Barclays, in which the Qatari Investment Fund – also an investor in Sainsbury’s – is rumoured to be buying a 10 per cent stake, were down by nearly 7 per cent this lunchtime. This is despite favourable noises from investors about Barclays’ decision to strengthen its balance sheet through a £4.5bn share issue.

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