Watching the Select Sector SPDRs Financials trading down 9% today, you've got to wonder if the SEC can possibly allow the ban to expire.

I mean, today alone, Morgan Stanley is down 25%, Bank of America is off 25% and Merrill Lynch is down 26% in sympathy.

Looking abroad, the Royal Bank of Scotland is off 41% with ADR shares trading at $1.54 a piece. Lloyd's is down 16%.

Do we really think the Securities and Exchange Commission will let the ban on short-selling expire at midnight on Wednesday, as promised?

I'm guessing no. Too much political risk for SEC Chairman Christopher Cox and the rest of our "leaders" in Washington.

If I'm right, that could mean more challenges for ProShares and Rydex in maintaining their inverse Financials ETFs. (Although so far, they've done an admiral job tracking their benchmarks). It would also mean continued high demand for shorts on the Select Sector SPDRS Financials ETF (AMEX: XLF). Finally, it would mean that the recent trends of higher spreads in the broad ETF market will continue, as those are driven in part by the difficulties market makers are having hedging their exposure due to the short market ban.

Maybe I'm wrong, but I don't think so.