Enough alliteration. Let’s talk business.

While I will never complain about a day that sends almost every position in our portfolio into the green, there are way too many red flags in the air for me to celebrate today.

Sure, the TFN Strategic Trader portfolio currently boasts six plays worth double-digit gains (47%, 44%, 50%, 10%, 29%… and 200%), but it’s a contrarian mix if I’ve ever seen one.

In other words, if our current portfolio is on fire (and it is), something is not right with the nation’s economy.

As with most things American, all we have to do is turn to The Donald for an answer.

Earlier today, Mr. Trump phoned his friends at CNBC. He had a bone to pick and he knew his the staff of “financial experts” – who gladly fill in when a Today Show gab is missing – would lend an ear.

Trump gets a lot of press time, but most of us agree the only thing he’s an expert at is bankruptcy proceedings. Taking his financial advice is like getting a clipping from a blind barber – another of Trump’s apparent flaws.

Sometime during the past few weeks, a bank must have looked at Trump’s credit record and said, “No way, Jose,” because the king of narcissism is angry at the banking industry.

He tells his audience that banks must be forced to lend more of that taxpayer cash they are sitting on. Trump believes the economy will never recover unless the banking sector loosens its standards and starts writing checks again.

Um, Mr. Trump, isn’t that what got us into this mess? Guys like you taking massive loans without a way to pay and then calling a bankruptcy lawyer.

Really, what could go wrong if we follow Trump’s advice and allow the government to force banks to lend?

Sure, most of those shaky loans will never get paid back and we’d be in a worse financial fiasco in eighteen months, but boy would it feel good now.

And there lies your problem. In a world where reality-show wannabes make front page news for embarrassing the White House and a golf star’s car accident gets more press time than Iran’s recent nuclear moves, it is all about feeling good now.

Who cares what tomorrow’s consequences will be? Somebody will bail us out. We feel good now.

It’s sad to say, but that’s the same logic driving the stock market these days.

Sure, the dollar is eroding fast, unemployment is above 10%, the national debt is off the charts, taxes are on the rise, and corporate earnings are stagnant, but dang it, it feels good to pretend it will be a “V-shaped” economy.

Anybody with half a financial brain knows it will all crash down someday, but too many of them just hope and pray that somebody will step in and fix it.

I know from the comments I received about my recent gold commentary, many Notes readily understand what’s to come. That’s why they are rushing to the “safety” of gold.

But let me warn you once again; gold’s recent run has as much to do with the nation’s feel-good-now mentality as the Salahis’ sudden rise to fame.

The collateral on both sides will not be pretty.

My advice? Go short. If it works for TFN Strategic Trader members, it will work for you.

*** With all of this talk about healthcare reform, Afghani strategy, White House crashers and gold’s 30% run, one industry has been greatly overlooked. And, once again, the action comes thanks to the folks in Washington.

The ethanol industry – which was recently plagued by bankruptcies and production shutdowns – is soaring these days as it awaits word from the EPA that ethanol allowances in gasoline could be raised from 10% to 15%.

Here’s a bit of what I told TFN readers earlier today:

“The ethanol industry is having yet another good day. After near political abandonment, the nation’s biofuel sector reeled from the pain of a wave of bankruptcy filings earlier this year.

“But now, thanks to some more political maneuvering the industry is once again finding itself on the leader board.

“Should you get used to it?

“Before we answer that question, let’s look at the catalyst for the action. Today was supposed to be the EPA’s deadline for a decision that would allow gasoline blends to contain up to 15% ethanol versus the 10% cap now in place.

“But word this morning says the EPA is not ready to make its decision quite yet. It now wants to make the decision by sometime next summer. Judging by the day’s pricing action, the Street views this as a positive sign.

“Companies across the industry are eager to push more of their product into the nation’s fuel source.

“One of the big winners today is Pacific Ethanol, the once highly touted California-based producer with subsidiaries in and out of bankruptcy court over the past year.

“Word that more ethanol production may be around the corner was enough for the company to pull the mothballs out of its Burley, Idaho production facility by January. The company owns a total of four production facilities, only one of which is currently operating.

“If the word from the EPA is positive, expect shares to continue to climb. As I write, traders are getting in (and out) at $0.87, up 56% on the day.

“Two more companies worth mentioning are…” To find out, keep reading here.

*** Finally, don’t forget about the question of the week: Is it a coincidence the weekly political roundtable programs air at the same time churches offer their weekly services?

We’ll discuss the various views on Friday.

We have this crazy, old-fashioned idea that shareholders actually own public corporations – not management teams and certainly not the government. We believe the owners of a business have the right to decide whether or not to go forward with important changes to the capital structure – like mergers and acquisitions. It is, after all, their property. So when Bank of America’s management team decided to buy Merrill Lynch despite Merrill’s enormous $15 billion fourth-quarter loss and its decision to accelerate billions worth of employee bonuses, we think Bank of America’s rightful owners should have been appraised of these significant developments before shareholder vote.

You probably heard what happened instead: The government leaned on Ken Lewis to keep quiet about Merrill’s losses. And he caved. Then in a move of utter cowardice, Ken Lewis tried to blame the affair on Merrill’s former CEO. We hope shareholders sue the government for tortuous interference with the contract. They’ll win. We hope Ken Lewis goes to jail for securities law violations – for which he is clearly guilty. We hope Bank of America’s rightful owners will one day have their property returned to them. So I guess you could say we’re on the side of property owners and against the endless number of leeches who try to con, steal, and muscle in on them.

Government regulations allow the bank to use that money for a few days before you get your shot at it. Hope the President opts for direct deposit on his pension check, book royalties and the millions he’ll get paid to speak in public.

Anyway, the Associated Press reports that, earlier this week, it was an impatient White House that prodded banks and other financial companies to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans.

Hoping to thaw the economy-chilling credit freeze, the Bush administration told banks to stop being sissies and open up loan windows for cash-starved businesses and consumers who have pulled back on spending.

“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” White House press secretary Dana Perino said.

While there are limits to Washington’s power to affect banks’ behavior, the White House decided it was time to use its bully pulpit.

Meanwhile, you have just a few days remaining to charter a bank and get yourself in on some of the gravy train.

Because, it will be a week or so before the Treasury Department can fix a glitch in the bank rescue program that currently prevents some 6,000 of the nation’s 8,500 banks from applying for government support.

Treasury is buying preferred shares in banks as a way of injecting cash into the institutions.

But about 6,000 of the nation’s banks don’t have publicly traded stock shares, so they don’t have a way to qualify for the handout.

Treasury officials assured banking industry representatives that they’d fix the application forms so that both publicly traded and privately held institutions can qualify for the program.

If the fix takes too long, the Treasury will extend the Nov. 14 deadline for applying for government support.

If it can do that for banks, don’t you think the government could deal with your Medicare disputes a little faster?

Source: Changing The Rules On The Bank Bailout

I must be looking at the equities through a different lens, because what I see and what Wall Street is apparently looking at is much different. Somehow the market remains positive, yet signs of ominous doom continue to build. The charade cannot last.

Just look at Harley Davidson’s (HOG:NYSE) earning report yesterday. Because domestic sales dropped by more than 13% during the year’s first quarter, the company will cut its annual production by 27,000 motorcycles and fire 8% of its workforce. That is not going to help the economy.

This news should be a neon sign that the economy is in trouble. But it hasn’t been.

You cannot open a newspaper without reading of major job cuts. The banking industry got slammed, now the ripples are spreading throughout the pond. Unfortunately, these waves are not going to slowly diminish, they are going to get larger and larger until they come crashing to shore.

This old mule ain’t what she used to be

We need to stand back and take a look at what has been driving the American economy over the past few years. It is a good opportunity to re-visit Alan Greenspan’s “irrational exuberance” phrase.

The market was overvalued. Fundamental value no longer had a meaning, but as long as values kept rising, everybody was happy. In the end, if things got too expensive, we could just take out a larger home equity loan. The world was grand.

But now, it takes sheer insanity to be willing to pay the prices some equities are getting. Let’s face it, the economy is moving backwards. Home values are plunging. Consumers are buying less. And manufacturers are scaling back.

Down and down we go

It is creating a vicious circle that will create more job loses, reduce consumer spending even further, and slow the economy that much more. Just in the last week, thousands of Americans lost their jobs. It is only going to get worse.

If there is one glimmer of hope (it is what is propping up the market today), it is the global markets. Even Harley Davidson admits its overseas sales were strong. Caterpillar announced the same thing this morning. While the economy is slowing here and the dollar continues to plunge, foreign economies continue to plug along… at our expense.

But I cannot be so naive to believe those countries will not be affected by our economic downturn. This is a global economy that is heavily linked to the prosperity of the American economy. If we stop buying, the countries that make those goods are going to be in serious trouble.

This is just the tip of the iceberg. Yesterday, people bought less motorcycles. Today, unemployment lines are growing. Tomorrow, who knows?

I bet it won’t be pretty.

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