This column by Jeff Tisherman, a private investor, appeared yesterday on RealMoney. Click here for a free trial, and enjoy incisive commentary all day, every day.

Dear Jim Cramer,

While I mostly agree with your harsh criticism of Wall Street and some of its practices -- from biased, crummy research analysts to the "buy and hold" mentality they pound down our throats -- your recent rant against the

SEC

for allowing the double-short and levered ETFs to continue to trade and how they are bringing down the financial sector and causing a run on banks doesn't hold water with me. I am not a short-seller, but please consider the following:

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I get your argument against the

ProShares UltraShort Financials

(SKF) - Get Report

-- it is not a perfect 2-to-1 hedge, and it allows buyers to "double-short" the financials on a downtick. But, a trader can also

short

the SKF as easily as he can buy it. In addition, one could also buy the

ProShares Ultra Financials

(UYG) - Get Report

, the double-long financial.

There are many other double-long and -short and levered ETFs for various sectors and groups. Why just pick on the financials? With all due respect, the financials have headed south from February 2007 with almost no support from the get-go. I highly doubt it is the daytraders buying the SKF that put

Bear Stearns

or

Lehman

out of business. Just as during the tech bubble of 2000, when we found that

Cisco's

(CSCO) - Get Report

inflated sales and earnings were primarily made to Internet start-ups that subsequently went under, we are now finding out that the highly levered banking community loaned out those levered dollars to unfit borrowers (and bonused themselves all the profits), and now all it takes is 5% of the loans to go into default to make the banks insolvent.

Don't get me wrong -- levered ETFs definitely increase the volatility of the underlying issues, and for that reason alone I would do away with them. But to say they are the cause of the ruin of the financials, I have to differ. I would also be curious to know whether more speculators are long the SKF or long UYG. My sense is that given human nature (and talking to folks around my parts), many people are afraid of missing the next rally, and they think that the financials are the "buy of the century" and thus loaded up on the UYG.

I hear many say, "How could you not own the UYG for the long term; what, is the whole financial system going to go away?" My answer is simple -- I don't know ... but the equity in the underlying issues may go away. Given the leverage in the financial system and the rate at which its underlying assets are deteriorating/defaulting, and taking into account the inability for the financials to raise capital, it appears that many financial institutions are and will become insolvent.

If the SEC abolished trading in the SKF and UYG tomorrow, I am not sure which way the underlying issues would go -- are you? And if the financials are being "manipulated" down, why aren't some "smart" people taking the other side of the trade? No, I don't believe the levered ETFs are the cause of the dismal performance of the financials. I

do

think the companies' performance is payback for their practices during the credit bubble -- the top financial executives may get to keep their cash bonuses (I believe the public should go after them, however), but their stocks will remain under pressure.

Although I disagree with your reasoning, the question remains: Should we get rid of the levered ETFs? Maybe. In fact, maybe we should get rid of

all

ETFs, from the

PowerShares QQQ Trust

(QQQQ)

to the

SPDR Trust

(SPY) - Get Report

and all the industry ETFs.

Who needs the increased volatility from the ability to buy a whole sector or whole composite in just one trade? Oh, yeah: Wall Street does. The creation of these things has made the Wall Street industry a boatload of cash at the expense of the individual. THAT is the reason to abolish them! Let's get back to picking stocks based on their individual merit and growth in sales and earnings.

Jim, keep up the good work. Your heart is in it for all the individuals out there, and I would like to see you in Washington -- in a watchdog position, leveling the playing field.

Very truly yours,

Tish

Know what you own: Tisherman mentions the UYG. Companies in this ETF include JPMorgan (JPM) - Get Report, Wells Fargo (WFC) - Get Report and Bank of America (BAC) - Get Report.