And So It Begins…….

By -

Well, this is happening sooner than I thought.

Today I received this letter from the completely lame, insanely-high-commissions brokerage that my employer uses to administer our 401-k program. Click on the link to read it; I don't want to gobble up space and bandwidth by posting it directly.

On my Big Picture page, I recently added this……

I will add that a major concern I have is that our government, which has become quite accustomed to extreme interference with the markets, will step in to "rescue" everyone during the resumption of the tumble. As a person who hopes to profit handsomely from the downturn, my concern is that the government is going to specifically target the bears in a show of populist activism.

So here we have the SEC suspending the use of leveraged and any inverse ETFs at major brokerages. It's starting with the 401-ks, but how long do you think it'll be before more "help" is on the way?

So where does this leave me, then? Well, I've got $375,000 in this account, and nothing to do with it. So – mission accomplished, SEC – there's $375,000 in buying power that wants to buy ultrashort ETFs that has been neutered. Multiply that by tens of millions of accounts, and you've taken a lot of selling pressure off the market!

You've also created a situation where people will be helpless to sustain the value in their accounts, because their choices will be (a) cash; or (b) bullish equity positions.