Is HBOS about to go under?

I see HBOS shares were down below 140 earlier today and have just recovered a touch to 173; that is still 25.59% down on the day and 34.88% down on the month. is this a repeat of March's alleged talking down of HBOS's shares or is there something about to happen? Those rumours "caused" a 7% drop in HBOS's shares on the day, today looks even more serious.

I think the FT's Alphaville contributor got this about right when in March he wrote:

"“Absolute fantasy.” How do we know? The Bank of England has told us so. Directly.

Late morning on Wednesday, as shares in HBOS dropped below 400p, Bank officials got on the blower to all chief banking and economics correspondents across UK newspapers and newswires. The media had to be told directly and forcibly - rumours of problems at HBOS, accompanied by stories of emergency meetings at the BoE itself, were just not true.

The point here is that Britain’s central bank NEVER discusses the heath or otherwise of individual institutions (except the Crock, of course). The idea of it going one step further and making pre-emptive calls is simply unheard of.

Clearly fearing a run on HBOS (wholesale, retail, stock market, whatever), the Bank decided the rumour-mongering was just too serious on this occasion.

Hence the heavy handed statement from the FSA, saying it was looking to feel the collar of anyone shorting financials and then spreading malicious tales.

Which makes us wonder how the FSA’s enquires might go…

FSA: Why did you short this bank?

Speculator: Because I thought it might have liquidity problems.

FSA: Why did you then tell the salesman at X broker that you thought this bank had liquidity problems.

Speculator: Because I thought it might have liquidity problems.

FSA: But it doesn’t have liquidity problems.

Speculator: Really?"