Tuesday, November 08, 2011

Morning Journal The tragic flaws of too big to fail

News on Stocks in Our Portfolios

02:23 PM UPS (UPS +0.4%) forecasts a "solid" holiday shipping season, with volume during the hectic week before Christmas up 6.2% Y/Y; it also says it will boost seasonal hiring 10% to 55,000 temporary employees. Two weeks ago, FedEx (FDX -0.7%) said its package volume between Thanksgiving and Christmas should rise 12% Y/Y. Comment!

01:50 PM Shares of Home Depot (HD +1.7%) trade higher after RBC Capital upgrades the company to Outperform from Sector Perform on top of a price target increase to $42 from $38. Analysts Scott Ciccarelli tells CNBC (video) positive industry metrics including a dollar change in private and fixed residential spending is behind the ratings boost. Comment!

10:47 AM CME Group (CME +0.4%) directs the firms taking over MF Global (MFGLQ.PK) business to hold off on distributing the transferred collateral and funds until it checks to see if the "correct amount" of collateral was allocated properly to individual customers. Comment!

09:49 AM Caterpillar (CAT +0.5%) works out a 10-year agreement with privately-owned Vestas Wind Systems to remanufacture wind turbine components for the Danish company. The service of returning end-of-life components to their original "same-as-when-new" condition is projected by Vestas to be €700M ($966M) by the end of this year. Comment!

07:36 AM General Dynamics (GD) agrees to acquire Force Protection (FRPT) for $352M to help shore up its extensive product line of combat vehicles. The $5.52 per share offer marks a 31% premium to the closing price of Force Protection on Friday. Comment!


This Week’s Data


Barry Ridholtz summarizes the causes of the financial crisis (medium):

New developments in geothermal energy (short):



Too big to fail--a flawed policy (medium):


China pumping a $1 trillion yuan into its banking system (short):