News that Bank of America is again seeking federal aid in order to keep the doors open sent that stock tumbling in Thursday trading. Citigroup also took a hit on concerns the bank won’t be able to handle its subprime-loan losses. Even JPMorgan Chase , which reported a better-than-expected quarter Thursday, is down.
Cramer pointed to increased interest in the UltraShort Financials ProShares as proof that more and more investors are betting against these banks. (These ultra-short funds take each dollar’s worth of investment and double or triple it to increase returns. As Cramer’s found out, that investing strategy hasn’t been working out.) But he thinks the thesis behind these investments is wrong.