72 Hour Call for June 16, 2011

Today’s Call:  Capital One Financial Corporation (COF) to fall.  Currently $49.00.

Rationale:  News that Capital One is purchasing ING Direct USA for $6.2 billion in cash and 56 million shares of stock.  Apart from the traditional tendency for the shares of the acquired company to rise and the shares for acquiring company to fall after an acquisition, you simply can’t create 56 million shares out of thin air and expect your per share price to increase.

Result of Call for June 13, 2011:  Price of Gold to fall.  Was $1,534.80, Currently $1,528.80.  Good Call. 

Calls to Date:  Good Calls: 29, Bad Calls: 22, Batting .569

Key Indicators for Thursday, June 16, 2011

Copper Price per Lb: $4.11
Oil Price per Barrel:  $94.95

Corn Price per Bushel:  $7.01
10 Yr US Treasury Bond:  2.91%

Gold Price Per Ounce:  $1,529

MINT Perceived Target Rate*:  2.25%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  11,962
M1 Monetary Base:  $1,921,900,000,000 RED ALERT!!!
M2 Monetary Base:  $9,084,400,000,000 YIKES!!!

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.