Mad Money Machine

Relationship of XLF, SKF, and RFN today

So shorting financial stocks was outlawed last Friday. The little guy is not allowed to make money off of the financial collapse. SKF is the ProShares UltraShort ETF that has the objective of being 2X short the S&P Financials index. When XLF goes down 1%, the SKF is supposed to go up 2%. The rules have changed. ProShares says they are not creating new shares. IndexUniverse says SKF is not functioning normally. Investors can still trade the existing shares, but they don’t reflect reality. For example, as of 11:20 this morning the XLF is down 5.6% while the SKF is also down 2.1%. On the other hand, the thinly-traded RFN is up 3.6%.  

Even the SDS which is 2X short the S&P 500 index is out of whack. With the .SPX down 2.2%, the SDS is only up 2.7% (instead of 4.4% expected) possibly due to the fact that the SDS managers cannot short financial stocks.  

Things are changing rapidly so as this post uploads it will probably be wrong, but I’m sickened that the little guy is getting shut out of opportunitities to hedge against the downturn. What’s next, confiscation of all of our gold coins, gold bars, gold ETFs, and gold rings?