Jim (cont'd):

Now, I have been on a crusade against this thing to no avail… we have said that it does not work the way that most investors think it should… do you know over the last 3 months, the index that the SKF is supposed to let you short with a lot of leverage is down 17.6%… so you would expect the SKF to make you a fortune right… no… the index is actually down 28.2%… that is right the SKF is down much more… but we have over why I don’t think these double short ETF’s don’t work… something that has been documented extensively by Eric Oberg, my colleague at TheStreet.com, where I am chairman… Oberg spent 17 years toiling in the derivative vineyard of Goldman Sachs, where he retired as a managing director, he has said over and over again, that the SKF… if the financial index goes down, the SKF actually loses you money… which is ridiculous.

I have railed how I don’t think this ETF works as advertised… how I don’t think that it ever should have been allowed by the SEC… but today I want to talk about something much worse… much, much worse… how the SKF and the ProShares, the company that manages these double short ETF’s… is contributing to the wholesale destruction of our very financial system… we know the selling pressure of the SKF has destroyed billions upon billions of dollars in wealth by knocking stocks down… the financial they get crushed by this… but know it is going to cost us perhaps hundreds of billions of dollars in bailout money because of the SKF… obviously the banks are troubled… but this ETF of mass destruction, as I call it… with the AK-47 like rapid fire selling it allows… is making it all but impossible for Treasury to give the financials due process… to corden off the good from the bad… to decide who gets to be saved and who doesn’t.

The SKF, frankly, is the stock market version of the Salem Witch Trials… working with full blessed of the SEC… it takes down the bank stocks indiscriminately… creating a vicious cycle, where the stocks go down making it harder for the banks to raise private capital… causing the taxpayer to spend more money to save the banks… if you add together all the double long and unleveled long financial ETF’s with the triple short and the double short financial ones, you get… are you ready… $18B of selling pressure from these ETF’s every day… $18B… that is the kind of head wind that the financials are fighting… all because someone at the SEC probably never thought through the ramifications of what would happen if we approved of these things… because they are new… that is a huge hurdle for both the banks and Uncle Sam… I frankly think that is a disgrace that this product is allowed to exist… I can’t believe the government doesn’t stop it… the financials are all about confidence… the government, whatever you think of its efforts so far, is trying to reestablish confidence in the banks… but practically every day, this thing comes out and beats the confidence over the head… to paraphrase Butch Cassidy, the SKF is like bringing a gun to a knife fight.

Now, the SKF is double short ETF, is taking down the remaining healthy few banks… and I think that it will force the governments hand to pump even more money in… right now it is taking down JP Morgan, JP Morgan just crushed its dividend tonight… and I own it for my charitable trust, ActionAlertsPlus.com, but it has been under major fire from the SKF… that is bad enough on its own… but remember, I don’t think there is a reason for this ETF to even exist… so we have a product that is working against the government, against you the people of the United States, because we do not want to live in a country without a banking system… the SKF is doing its best to make sure that the center will not hold… but it also doesn’t work the way that people think it is supposed to… so what exactly is the reason for the SKF’s existence… other than to destroy the banking system, and to bankrupt the taxpayer… in order to make some hedge funds some money.

Could it be that the ProShares unwittingly created something that had the unanticipated effect of potentially helping traders get around rules and hedge funds… ProShares keep pumping this product, and the SEC keeps approving it… the SEC has not problem with it but I do… I have come down on the SEC before… but tonight I want to present ProShares… the company that created the bulk of these double short ETF’s… which in affect bills itself as “The Worlds Largest Manager of Short and Leveraged Funds”… tonight, I am giving them a brand new award… I am giving them The Mad Money Legion of Dishonor… their products are helping to destroy the financial system… their enabling market manipulation… and they are making it much harder and more expensive for Treasury and the Fed to rescue the banks that deserve to be saved… if you want to get outraged about something, this should be it… these guys, the SKF… is taking control of the marketplace and destroying the banks… and the government can’t do a thing about it… I have been saying it time and time again… I know that the SEC has approved this thing, but I do not… please, we need to understand if they understand the flaws and the potential for market disruption and manipulation… I invite these winners of The Legion of Dishonor and explain it to us… until then, just call me outraged.