Jim Woods

It's Not Too Late To Go Short

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Then, of course, it was assumed that a person's financial defaults, or need, should now give them a claim check on the wealth of the most-productive members of society. This claim check, of course, should be redeemed via a federal government bailout.

Alas, we live in a society populated by economic ignoramuses. So, I ask you, is it any wonder why we're facing the distress we are?

Politicians, pundits, policy makers at the Fed and Treasury, and especially those partygoers, all are operating under the premise that all we need do is wave a magic Keynesian wand and the economy and the stock market will be back to normal. I liken this to the man with cancer who seeks the consult of a witchdoctor in an effort to expunge the diseased cells from his body.

Now, since we here at OptionsZone are primarily concerned with the practical application of these erroneous philosophic notions, I'd like to connect us back to a way for rational investors to capitalize on these prevailing irrational economic ideas.

One way to do this is to bet on an extended and even more pernicious downturn in equities courtesy of the government's growing involvement in the housing, banking and automotive industries, to name just a few of the highest-profile victims of this mixed-economy malfeasance.

By using leveraged short exchange-traded funds (ETFs), that is to say, ETFs that move twice the inverse of the specific market indices they track, we can rapidly capitalize on the continued decline in several of these market sectors, as well as the market at large.

It is my opinion that the decline in stocks will continue well into Q1 2009, and possiblly well beyond that. So, if you want to take advantage of the current cocktail party zeitgeist, here are three ETFs that let you do just that.