With the nation’s unemployment rate officially in double-digit territory and the under-employed rate ready to the 20% mark, the politicians that promised bliss in the days ahead are eating their words today.

And that means Wall Street is eating its recent gains.

For nearly a month, the Dow has hovered around the 10,000 mark. After hundreds of billions of dollars were withdrawn earlier this year, it was relatively easy to put that money back to work and send the equities market higher.

But now that the economic data is showing facts of slower-than-expected expansion rather than “ideas” of growth, investors are forced to explain their logic. The Dow doesn’t want to budge from 10k.

So far, I’ve heard very few reasons for prices to go any higher. Maybe in China or Australia, but certainly not here in the land where everything is changing.

Think about what has occurred over the past twelve months and tell me if you believe today’s companies are worth as much as they were two years ago or even five years ago.

We’ve had government takeovers of major banks, mortgage lenders, auto manufacturers and insurers. Washington has told people how much they can make in a year. Legislators even introduced retroactive taxes.

Then there is the threat of cap and trade blowing energy prices (an input to nearly every American business) sky high. Now it is mandatory healthcare and the risk to corporate payrolls, tax structures and discretionary spending.

After all that, I hate to think about what is next. An assault on allergens?

*** Maybe I’m just being too pessimistic. After all it has been a long week and I spent five hours at the airport in the middle of the night yesterday waiting to pick up my mother-in-law.

Don’t get me wrong. I think there are some fantastic buying opportunities out there. There are just not in the places most Americans are looking.

But since the mother-in-law brought me eighty pounds of fresh Alaskan salmon, halibut and moose meat (she’s as close to Sarah Palin as you can get without committing to Playgirl), I am starting to feel a bit generous today.

That means I’m going to share with you what I am certain will be the biggest gainers of the next twelve months.

First… healthcare. Think about it. Who is easier to rip off than the federal government?

Just ask Haliburton, Goldman Sachs and whoever sold those $750 toilet seats.

Within a year of signing some diluted version of Pelosi-care, the headlines are going to be filled with record-breaking profits out of the nation’s largest healthcare providers and drug companies.

If Wall Street has the nerve to toss out billions in bonuses while the ink on their bailout checks is still drying, imagine the kind of zeroes that will be added to the paychecks of healthcare executives.

I can hear the excuses now. “If we want to save lives, we have to retain the best workers.”

It is going to be a feeding frenzy when Uncle Sam is the third-party payer.

Next, forget about gold.

One reader wrote to me yesterday and said, “I think it will hit $2,000, but it will probably hit $600 first.”

Could not have said it better myself. Gold’s value is too tied up with political moves and currency fluctuations. With one well-timed press release, China can send the price wherever the heck it wants.

I don’t want my wealth facing that kind of risk, especially after we just rammed Beijing with the largest tariffs yet.

That’s why my money is on palladium. It’s much harder to find and has a huge industrial demand.

Palladium is at the heart of the world’s commodity carry trade. I told TFN Strategic Traders to play Stillwater Mining several months ago and the trade nearly doubled in a week. It is still a good buy, especially as China’s auto industry takes shape.

Finally, go short on natural gas. Get as much leverage as you can because prices are about to plummet fast.

On Wednesday, the International Energy Agency was one of the first major groups to back my opinion. In a draft of a report due out next week, the influential group warned of a massive glut of natural gas as global demand begins to top off and turn around just as we are pulling more of the stuff out of the ground than ever.

But don’t wait until Tuesday to read the report. You can read my version right now. In it, I recommend three ways to play the situation.

So far, two of the plays would have already doubled your money. All three are well into positive territory. Prices are almost out of my buying range, so do not hesitate to take action.

*** Before I go for the week, I need to make a correction. Yesterday, I inadvertently said the Senate extended unemployment benefits for 14 months. The actual extension is 14 weeks.

I apologize for accidentally releasing my psychic secrets. The 14-month extension won’t come until next spring, when Congress finally makes it illegal to layoff any employee.

Enjoy a great autumn weekend,
Andrew Snyder

Ford posted a $2.98 billion operating loss for the quarter ended Sept. 30. Revenue fell 22% to $32.1 billion, forcing the Dearborn, Mich.-based automotive icon to burn through $7.7 billion in cash.

The automaker’s cash reserves dropped from $26.6 billion at the end of the second quarter to $18.9 billion at the end of September. If the company continues to burn cash at this rate, Ford will run out of money by April 2009.

“Cash burn is the No. 1 issue,” Rebecca Lindland, an analyst at IHS Global Insight Inc., said in an interview with Bloomberg Television. “We associate cash burn with General Motors. It has not always been a problem with Ford. That is potentially a new problem.”

Ford Chief Financial Officer Lewis Booth insisted that the company has adequate liquidity and said Ford is taking steps to fortify its position going forward.

“We’re comfortable with our liquidity,” Booth said. “We are putting in place a lot of actions to make sure we stay comfortable with our liquidity situation.”

Those measures include: Reducing inventory, eliminating merit-based pay increases for salaried employees in North America, cutting performance bonuses for salaried employees worldwide, and the suspenspending matching contributions to salaried U.S. employees’ 401(k) retirement accounts.

Ford will likely cut more jobs as well. Ford dismissed 1,500 salaried employees in the third quarter, after shedding 200 in the second quarter. The company hopes to reduce salaried personnel costs by another 10% by the end of January.

At the end of September, Ford had 22,600 salaried workers and 57,600 hourly workers in North America. That is a total of 80,200, a 41% reduction from 2005, the Detroit Free Press reported.

Cash Strapped GM Waves White Flag

General Motors is facing a similar dilemma. The nation’s largest automaker reported a third-quarter operating loss of $4.2 billion. GM also said that the amount of cash it has on hand fell from $21 billion at the end of June to $16.2 billion at the end of September.

GM said that it could very well run out of cash by year’s end.

“Even if GM implements the planned operating actions that are substantially within its control, GM’s estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business,’ the company said in a news release.

“Looking into the first two quarters of 2009, even with its planned actions, the company’s estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs,” the statement read.

Like Ford, GM outlined a plan to boost liquidity with the goal of generating $20 billion in cash by the end of next year. The company hopes to cut capital spending to $4.8 billion in 2009 by delaying the debut of select vehicle programs, Bloomberg reported. GM will also save $1.5 billion by slashing its advertising budget and dealer promotion support.

The plan will also include job cuts. GM aims to cut 30% of its salaried-workforce expenses.

The company also has suspended merger talks with Chrysler LLC – a division of Cerberus Capital Management LP. While it did not specifically name Chrysler, GM said it was setting aside considerations for a “strategic acquisition.”

“GM is making a pretty direct plea for help,” Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. told Bloomberg. “The message is, ‘We’ve done all the things we can do, and we need help. And if we don’t get help, fill in the blank.’”

GM, Ford, and Chrysler all asked to be included in the U.S. government’s $700 billion bailout plan, but were denied. They are currently seeking $50 billion in federal loans in the form of a package that would devote $25 billion to healthcare costs and $25 billion to aid general liquidity. Congress earlier this year approved a $25 billion loan program to assist in the development of more-fuel-efficient vehicles.

Detroit’s Big Three have also requested $51 billion (40 billion euros) in loans from the European Commission (EC).

“Either the federal government provides money for a bailout and lets the industry retool, restructure, and move ahead, or the industry dies,” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, told Bloomberg Television.

Source: GM and Ford Burning Cash, Seek Emergency Government Loans

The debt, the deficit, two wars without end, the banking crisis, the mortgage crisis, the worldwide economic slow down, Social Security, a deadlocked partisan congress, health care, a tax system that everyone thinks is unfair, collapsing US auto manufacturers, jobs being exported at light speed, the defense of our northern and southern borders, a recession, still no energy policy, and what appears to be a complete collapse of our image abroad.

Why would anyone want this job? It’s beyond me. The real question is now that he has done what seemed like the impossible, how will it affect the markets?

This is a long and short-term issue. In the short term, the markets should rally. If for no other reason than the media and press will ease up on the hugely negative pounding they have been delivering for the past two years.

A rally is also likely because, as everyone knows, the market hates uncertainty. Even though this race has been all but a certainty for a long time, it has added to the mood of “what’s next.”

More specifically, and on the bright side, we should see good things for the solar and alternative energy sectors, biotechnology, the health care industry, and if he makes good on his promises to restore jobs to the middle class, manufacturing could see a jump.

Long term is another issue. We are in several very tough spots. We have a full-blown recession and the last thing we need in this environment is a tax increase. It could be fatal.

On the downside, pharmaceuticals will most likely take a hit. He is pretty clear he wants to change how business is done in this area. Defense contractors stand to lose if he makes good on getting our troops out of Iraq and Afghanistan, and if he is as pro new energy sources, as he claims, traditional energy stocks could be in for a rough time.

All of Obama’s promises about increasing taxes on the so-called “wealthy individuals” could be the proverbial last straw. If the President elect makes good on his promise to redistribute wealth by increasing taxes in this economic environment, we could have a longer and deeper recession than anyone has predicted.

The key to all of this is that all of these were campaign promises. Campaigns to me are a lot like our first few years in college, and last few years of high school. We had all the answers and no responsibilities. It’s easy to talk change and promise the middle class another New Deal, but what he will actually do is anyone’s guess.

The best thing the markets have going for them is that Obama is a very, very smart guy. And as smart guys usually do, they surround themselves with smart people. Hopefully, these smart people will help the new president see that most of the ideas used in the campaign to get votes need to take a back seat to the realities we face as a nation.

If this “smart guy” scenario plays out, we could do very well with this administration. When it comes to the markets, recent Democrats actually have a better track record than Republicans. If Mr. Obama is enough of a politician to beat the odds and win this election, I have to believe he is also enough of a realist to look at the situation he has inherited and deal with it appropriately.

History has proven that the markets do well no matter who is President. Most conservatives expected the world to end when Clinton was elected. Liberals threatened to leave the country if Bush was elected. Everyone under the age of 30 had heart palpitations when Nixon won in ‘68. The markets always find a way to make it to the next election.

Source: Congratulations President Elect Obama