Triple-levered equity indexed ETFs are now trading

Three times the return of a market index, easily accessible to any retail investor? No problem! Within the complete prospectus filed at the SEC , take a gander at the subsection entitled "Principal Risks". Notice all those capitalized X's in the chart? Yeah...me too. Oh...and I believe these exchange-traded instruments are fully Marginable at 50%, so your theoretical leverage could be SIX to one. Perfect for the 401K !

There are a few other blogs/sites that have questioned the wisdom of listing such securities as we fall headfirst into the biggest credit crisis and deleveraging of all time -- but I'd like to take it a step further, back to the Source. ETFs don't just magically appear for trading, they are allegedly put through a stringent review process. Exactly what was the conversation at the SEC a week or so ago, when these funds were given a government stamp of approval? I doubt that discussion is a matter of public record, but let's look at a few realities:

1. This is an even more egregious circumvention of Federal Reserve margin requirements than the current Ultra ETFs with 2x leverage;

2. Retail or institutional investors who need exposure to equity index movements can already get substantial leverage in the super-liquid Futures and Listed Options markets;

3. To sanction these ETFs at this particular time, in the face of a systemic DE-leveraging currently traversing worldwide financial markets (not to mention a credit crunch that has prompted in excess of a Trillion $ of emergency funds from the Fed), is just incredibly tone-deaf. It's as if the SEC's investment management division has no experience in either the structure of equity markets or judicious public relations.