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Opening Segment #3: |
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'Outrage
Of The Day' |
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Wednesday,
June 17, 2009 |
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Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name |
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UNG |
15.88 |
United States Natural Gas
(UNG)
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Jim:
You heard talk all
day today about
regulatory reform...
we can reform
this... massive
changes that...
Believe me, we could
not care less about
these changes in
Cramerica, most of
which won't mean
anything anyway to
you... and the vast
majority won't even
pass... because the
entrenched interests
that have so
influenced Congress
for so many years
will fight anything
meaningful, and they
will succeed,
particularly against
anything that will
help you. That's the
way it always is.
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See comments continued below...
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Jim's Charitable
Trust Alert -
Just happened:
* Just
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all
Jim's
latest
holdings here> |
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Wednesday,
June 17, 2009
(Cont'd from
above)...
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Jim:
We on Mad Money,
instead, want to
focus on what we can
help change... the
direction and thrust
of the organization
that is actually
meant to protect you
from rapacious
capitalism... I'm
talking about the
Securities and
Exchange
Commission...
We need to see the
Commission to go
back to its roots...
something that we
had before the Bush
years. We need to
see the SEC once
again embrace the
concept of leveling
the playing field
for you... It is why
we led the drive
right here to
reinstate the uptick
rule, so short
sellers couldn't
gang up on you and
raid your stocks...
something the
entrenched
interests, right
now, are fighting
tooth and nail,
because it would
hurt volume and
profits, which is
all they've ever
cared about.
We've pioneered the
notion that the SEC
has made some
terrible mistakes,
in blessing
virtually every
single
exchange-traded fund
(i.e., ETF)... We've
talked about the
hundreds of billions
of dollars that
you've lost as
taxpayers at the
hands of these
weapons of mass
destruction. These
ETFs would allow you
to short two or
three times the
amount you could
legally before. That
gave the shorts
enough firepower to
overwhelm the bank
stocks.
These ends around
the Federal Reserve
margin rules should
never have been
blessed. It wasn't
even the SEC's
purview... and they
should be repealed
immediately.
Tonight, we want to
talk to you about a
new outrage... an
ETF that purports to
track the price of
natural gas. It's
called the
United States Natural Gas
(UNG)...
Here's an ETF who's
popularity has
exploded... $670
million in this UNG
in February, to $3
billion now. I don't
think the SEC had
any idea what it was
approving when it
blessed this
instrument, because
there is so much
money coming into it
now, that it is the
tail wagging the
natural gas dog...
It is literally
moving the price of
the commodity
itself. It was never
supposed to do that.
The way I see it,
the UNG could
actually and legally
manipulate the price
of natural gas
upward. Not
something the
government wants
because, when money
comes into the UNG,
it has to go buy
more natural gas
futures contracts,
and that buying is
overwhelming the
natural gas market,
and moving it up,
regardless of the
actual demand.
Dan Guyon, my
amazing colleague at
TheStreet.com
where I'm
chairman...
analogized today to
the making of
pencils... He said,
could you imagine if
I made pencils, and
suddenly everyone
wanted to buy my
pencils... well then
I would have to keep
going out and buying
more lead and more
wood to make more
pencils to meet the
demand... What could
happen and, by the
way, what's
happening now with
the UNG with the
natural gas market,
is that I would
become the largest
buyer of lead and
wood... and I am
setting the price
for lead and wood,
not the market
itself.
I think that's what
the UNG is going to
be doing with the
natural gas, with
this pace of
growth... and
assets... if the SEC
doesn't do
something.
Here's the bottom
line...
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 The Bottom Line!:
What I think is more
important is that
the government
rethink the fact
that there should be
EFTs for everything,
including assets
that can't be
tracked effectively.
I think the
government should be
bannishing the ETFs
that accomplish
nothing but a bet
that day traders
trying to take up or
down stocks and
commodities. The
fees are immense for
new ETFs. The people
who promulgate them
are now going
unchecked by the
government. Their
popularity is now
legion... and the
SEC has to crack
down to stop the
proliferation of the
ETFs, like
the
United States Natural Gas
(UNG)
and, most important,
ban any ETF that can
skirt the margin
rules. If you want
regulatory reform
that can help
people? Let the
Federal Reserve, not
the SEC, regulate
margin requirements,
like it's supposed
to. And let the SEC
protect people from
this kind of UNG
lunacy, before
investors get hurt
playing with an
instrument that's
way too powerful for
its own good.
[end of segment]
Read Jim's next Segment
here
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Read Jim's next Segment
here
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