Kass: Kill the Quants, Punish the ProBears

It is important that the SEC addresses the dominance and unwieldy influence of quant funds (through the reinstatement of the uptick rule) as well as the circumvention of margin rules by the ultra bear ETFs in order to "maintain fair, orderly and efficient markets." It is also important that the SEC considers regulation of the credit default swap market, a market that the Committee neglected and incorrectly left as materially deregulated in recent years.

Our stock market's playing field is no longer level, and, almost without question, the two players above have contributed to an acceleration of the market's downtrend in 2008 and 2009.

Once again, the SEC has dropped the ball, an all too familiar refrain.

I am hopeful that the SEC will not wait in addressing the role of quant funds and ultra bear ETFs until it is too late to rescue our stock market. Remember this is the same organization that crippled the markets with Sarbanes-Oxley, though, so I am not going to hold my breath.

Doug Kass writes daily for RealMoney Silver, a premium bundle service from TheStreet.com. For a free trial to RealMoney Silver and exclusive access to Mr. Kass's daily trading diary, please click here.

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Know What You Own: Doug Kass mentions the ultra bear ETFs, some of which include the UltraShort 20+ Year Treasury ProShares (TBT), UltraShort Financials ProShares (SKF), UltraShort Oil & Gas ProShares (DUG), UltraShort Dow 30 ProShares (DXD), UltraShort QQQ ProShares (QID), UltraShort S&P 500 ProShares (SDS) and UltraShort Russell 2000 ProShares (TWM). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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