Since when a Bush lackey can see reality as we know it?

this: “So much history; so many ideas; so little time; how can a person learn it all?”

is a good Q:, simply, one cannot.

lends weight to the ol’ adage: “Learn more than you’re Taught.”

the only thing I can say, as you already know, some sources are better than others..

with that, be exposed to many, different sources..fairly readily, the BS will become more obvious.

then, we’ve a choice to make, Hew to the Facts, as we best determine them, or Wallow..

as we know, some things just aren’t Kosher.

This:

Markets that have many players, transparency, no principal-agent problem and consequences for your actions will self regulate. Markets that have few players, hidden information, principal-agent problems and bailouts will not.

is nonsense.

Care to specify how many players are sufficient for a “self-regulating market”? Care to define “transparency”? Are privately held companies to treated the same as publicly held companies? Are hedge funds transparent enough?

Good luck with that no principal-agent problem. And is there anyone that does not suffer the consequences of their actions? How about suffering the consequences of someone else’s actions? What does your “self-regulating market” do about those?

Could they?

Don’t be too idealistic about what regulation can accomplish you say….

The problem was that the ideologues of ‘free markets’ were absolutely sure of the benefits, therefore in their minds absolutely correct in following the policies that assumed markets could self regulate.

These same people are now clamoring for a continuation of the policies that got us into this mess in the first place. BTW this is NOT a normal business cycle.. The top of the next bull market will not be when you expect.

\r\nThis year, the S.E.C. has brought the fewest number of securities fraud prosecutions since 1991….

What about the $11.49 SDS paid in capital gains distribution and dividends that went ex-date on Dec. 23?

And I still need to get to the bottom line of Mises.

So much history; so many ideas; so little time; how can a person learn it all?

You are falling into the uninformed category.

Lets say an uninformed trader has picked a perfect bottom on November 20th and went long SPY at closing price of $75 ($75K capital, 1000 shares at $75). Lets say he has hedged it with SDS that on November 20th closed at $128 (because it is twice the inverse, he would need 1/2 of $75K to fully hedge his SPY bet, risking $37.5K of capital to hedge $75K investment).

On December 24th, SPY closed at 87 and SDS closed at 77. The uninformed trader would made 14% profit on SPY ($12K) and at the same time he would lose 40% on SDS ($15K). The uninformed trader would actually be a loser with $3K loss, despite perfectly picking the bottom.

Lets say a second informed trader, instead of using SDS, bought 10 January put contracts to hedge 1000 SPY shares exposure, risking $3.75K of capital to hedge $75K investment.

On December 24th, the informed trader makes $12K of profits on SPY and loses $3K on January puts. The informed trader makes $9K profit.

What is better, $9K profit or $3K loss?

I hope you can see now as to why the pros would never use SDS for hedging (risking too much of capital, freezing too much of capital, and losing money on correct trades).

Most likely if you see large buying Ultra Short ETF orders, it is to manipulate the market or the sector (big trading houses actually set programs to buy these ETFs at specific time during the day to create a selling panic so their firm traders can cover their short trades in underlying securities)