Baltimore — (TFN): Want to know when a specific trend has no legs? Simple, when the government backs it, you know its DOA.

Just ask the folks that dumped millions into the biofuels industry. I have never seen an industry fall off the map as quickly as ethanol, except maybe clean coal, but that’s a whole different story.

Now that Cash for Clunkers is in the history books and the economy appears to be in worse shape despite jaw-dropping levels of government prodding, the Obama administration has moved on to the next vote getter, er, I mean, stimulus package, er, I mean, jobs program.

It’s a kiss of death for the “green” initiative.

If you loved Cash for Clunkers, you’re going to flat-out be infatuated what the press has dubbed Cash for Caulkers.

It includes the same market-bending incentives. It gives your hard-earned tax dollars to somebody that likely doesn’t deserve a penny of it, plus it allows immense room for corruption and deceit.

But best of all, it isn’t limited to just $4,500. Nope, this time Uncle Sam’s writing checks for up to $12,000.

Fall in line, folks.

It’s a buy-one-get-one-free extravaganza at the White House. For every dollar you spend on “weatherizing” your house, Obama wants to hand you fifty cents in return.

If the first stimulus created scores of jobs in previously unrecorded political districts, imagine what this program will do.

I think I’ll install a high-tech “man cave” in the basement and label it as “internal carbon sequestration.” The former Acorn thugs rummaging through the reams of paperwork will never know the difference.

I’ll thank you in advance for the hard-earned tax dollars.

More seriously, we’ve got another politically motivated Ponzi Scheme on our hands here. It may send a well-tuned shockwave through the economy at a politically sensitive time for Obama, but it will do nothing for the nation’s failing attempt to pull up our boots and strut out of this mess.

What it will do is have much the same effects as the ill-planned Cash for Clunkers program. (I wonder if all those car dealers got their rebate checks yet.)

As mentioned above, just about anything will fall under the cloud of “weatherization.” We’ll see taxpayer funded swimming pools, sunrooms, outdoor kitchens, sprinkler systems… you name it.

Before you know it, Obama will be calling this thing a bigger success than he imagined and Congress will shove another sticky hand in our back pockets to fund some more votes.

Meanwhile, the price of just about everything you need to pick up at Lowes this weekend will surge in value.

Want to insulate your attic? It’ll cost you plenty more if Obama gets his way.

Want to replace the window Lil’ Johnnie broke with an errant foul tip? Get out your checkbook.

But the news should be good for McCain’s favorite campaigner, Joe the Plumber. His business is going to be through the roof… for about a month. Then just like we’re seeing at the nation’s car dealerships, he’ll be lifting his phone checking for a ring tone.

As for consumers, this is a great deal if you were already planning a new kitchen or some renovations.

But for the out-of-work father of two with a drafty house and a leaking roof, it’s going to do little more than incentivize him to break out the credit card and go even further in debt.

By why deal with that now? Just like national debt, that’s something the future can deal with.

*** Really, why should I complain? We’re making money hand over fist thanks to this political pandering.

I should be more specific. TFN Strategic Trader members are making money hand over fist.

Just today, we sold the second half of a position for gains of 100%. If you recall, we sold the first half for whopping gains of 400% just a couple of weeks ago.

All of our recent gains forced me to run some calculations today. It turns out, we’re kicking some serious behind.

Out of the 35 positions we closed since our debut in March, 26 of them have been breakeven or better.

Thanks to 14 trades with 50% gains or better (yes, you read that right), we’ve got a batting average of 0.743.

Nearly 75% of our trades have led to gains. That’s nearly unheard of for an options-trading service.

Let’s just say I can’t wait to see what next year brings.

*** It’s been a strong year for TFN Strategic Trader and it’s been a strong year for the biotech sector. As I told TodaysFinancialNews.com readers this morning, if the year would end now, biotechs would beat the market by a two-to-one margin.

The S&P 500’s up by about 18%. The biotech sector is up by 39%.

That’s good news for one biotech player, Fact Biotech (NASDAQ:FACT) as it searches for a deep-pocketed buyer.

Here’s some of what I told investors this morning:

“To be certain, if your goal was to beat the markets in 2009, the biotech sector was the place to do it. Unless something dramatic happens between now and the end of the month, biotechs will have outpaced the broader markets nearly two to one over the past twelve months.

“The S&P is up 18% year-to-date, while the biotech sector (according to the AMEX Biotech Index) is up by a whopping 39%.

“That kind of figure is good news for Fact Biotech as it mulls its future.

“Since September, Biogen Idec has had its eye on a Fact takeover. Its first offer of $14.50 per share was promptly rejected. And now we are receiving word that the company’s second tender offer of $17.50 has been unanimously rejected by the company’s board.

“According to the letter released to shareholders this morning, Fact’s top brass believes Biogen’s offer significantly undervalues its product pipeline and overstates its liabilities.

“What’s even better for investors, however, is the fact that the board is essentially putting a for sale sign on the company’s shares. “Beat this price and we’re yours,” their actions say.

“The news is good for share price. As I write the stock is up by nearly three percent, surpassing Biogen’s tender price by nearly forty cents.

“What comes next?” Keep reading to find out.

*** What am I watching for tomorrow? You should know by now. It’s all about the dollar and its sudden strengthening. The greenback’s up again today.

Gold bugs managed to stop a week’s worth of bleeding this morning, but if the dollar rises again tomorrow, don’t expect today’s gains to hold.

What’s more, next week is the final expiration date of the year. All sorts of crazy things will happen as those big institutional buyers shore up their books for an end-of-the-year review. It won’t be good for bullion hoarders.

–Valuations are out the door for now. If small brokers that offered their clients leverage keep collapsing and liquidating their portfolios, you’d have to be a daredevil or playing with someone else’s money to be a buyer.

–It’s not that there’s no value in the market. It’s that there are so many sellers. The trouble is you just don’t know how much more forced selling there’s going to be. With so much stock being dumped on the market, it pays to be very discrete.

–A quick word about GE before we move on. GE is a world-class jet engine maker. It’s also a shameless money-lender.

–GE’s commercial finance business in Australia has a much higher profile than its business in the States, which goes under a different name altogether But the company’s dirty little secret is getting out: it’s really a financial company masquerading as an industrial.

–The company generated huge earnings during the credit boom as a commercial lender, not an industrial manufacturer. GE reported a double digit decline in first quarter earnings, and promptly blamed the whole thing on Bear Stearns. But if GE’s CEO Jeffrey Immelt were being candid with investors, he would admit that the problem isn’t with Bear Stearns, but in the performance of GE’s financial segments. Don’t take out word for it. Look below.

GE Summary of Operating Segments (unaudited)

Source: Edgar Online

–You can see that GE’s two big financial segments, Commercial Finance and GE Money, showed a twenty per cent and a nineteen per cent decline in profit in the first quarter, respectively. Earnings in the infrastructure business were actually up.

–GE used to be company that made money by making things. Now it’s a company that loses money by lending money. It’s a pretty good symbol for much of what’s wrong about American capitalism. The truth is, it should probably be two companies, not one.

–While the share market digests the news of collapsing brokers and falling financial profits, the grand poobahs of the world’s economy are wringing their hands in worry. What’s keeping them up at night? The three Fs, each its own kind of crisis: food, fuel, and finance.

–”The World Bank met on Sunday faced with a mounting food price crisis that has sparked deadly unrest in developing countries, underscoring the urgency of fighting hunger and poverty,” reports Channel News Asia.

–How urgent, you ask? The Prime Minister of Haiti was sent packing this weekend by crowds protesting soaring food and fuel prices. We don’t even know who the man is but reckon he won’t be the last public official to be ridden out of town on a rail before this current crisis is over (and it may not be any time soon).

–As usual, it’s the people at the margin (whether lending or with food) that are affected first when surplus turns to scarcity. Despite all the daily signs of abundance here in Australia, let us not forget that there are about four and half billion people on the planet who have little margin for error in their daily lives. If food prices go up, many of these people go hungry.

—World Bank President Robert Zoellick, doing his best impersonation of Franklin Delano Roosevelt, wants a “new deal” for global food programs. He’s asked richer nations to contribute US$500 million immediately to help get food to poorer nations.

–IMF President Dominique Strauss-Kahn was less pragmatic but more rhetorical. Wrapping up his organisation’s annual spring meeting, he said that, “Food prices, if they go on like they are doing today … the consequences will be terrible…Hundreds of thousands of people will be starving…As we know, learning from the past, those kinds of questions sometimes end in war.”

–People often talk about resource wars being a common feature of the coming century (or decade). But it’s usually oil and energy they’re talking about, not rice and wheat. Food is fuel for the body (we’ve been watching the Biggest Loser). If you don’t have access to cheap calories, what good is cheap fuel?