WHY CRAMER GETS IT WRONG

Cramer has been shorting the market since the dawn of time and now wants to prevent YOU, the little guy, from making money in a bear market, of which you can bet your booty that his Charitable Trust has been doing, not to mention his former hedge fund.

Hey Schapiro, Ban This ETF
from Cramers Show Feb 4

The Securities and Exchange Commission needs to protect investors from harmful financials instruments, Cramer said Wednesday, the same way the Food and Drug Administration protects patients from bad drugs. In fact, Mary Schapiro’s first action as SEC chair should be to ban ultra-short exchange-traded funds. They’re causing too much damage in the markets.

Cramer’s talking specifically about the SKF, the UltraShort Financials ProShares ETF [SKF 150.01 -1.13 (-0.75%) ], which takes a dollar’s worth of investment and doubles it in order to boost returns. The fund is supposed to be a play on the financials’ decline. As the Dow Jones U.S. Financials index goes down, SKF shares go up. But that hasn’t been the case. SKF investors have actually lost money despite huge declines in the banks.

What this ultra-short fund really offers is the chance to sidestep the SEC’s margin restrictions. Short sellers are now double the threat they once were, and their ETF-enabled positions are hammering down the financials, hurting common-stock shareholders and the markets as a result. In Cramer’s words, “it is a manipulator’s dream come true.” This isn’t the first time he’s railed against the SKF, and he said it wouldn’t be the last. Cramer won’t quit “until the SEC does something.” In the meantime, watch this video for the full story on just how damaging these ultra-short funds really are.

*I looked up SKF on yahoo finance and when market was crashing on November 20, SKF was at $300. You could have sold all but 25shares and made a fortune while your portfolio was falling into the abyss, thereby hedging against the losses you were taking (because you had been told to buy and hold). What is wrong with that? Why shouldn't you make money or better still, protect your long positions, by buying the other side of the market? Not everyone is comfortable shorting and having a margin account is costly. But the real reason is because you cannot short the market in a 401K or mutual fund, where Cramer's buddies reside. So buying a short ETF from Barclays is a great, inexpensive way for you to keep from loosing ALL of your RETIREMENT. Cramer and his whining cronies at Goldman Sachs want to be only ones making money in this marketplace.

Personally, I trade the ultra short ETF DXD. I find it is a better hedge and I can make a little money while trading and it pays a great dividend each year.