New Tools to Bet on Higher Interest Rates Read more: New Tools to Bet on Higher Interest Rates

With all the talk of needing to further regulate speculators, hedge funds and other financiers, it's somewhat ironic that the biggest player in the financial markets is the Federal Reserve. It is not a federal agency or subject to a full independent audit, despite operating with a highly leveraged and inexhaustible pile of assets backed by the country itself.

Last week, we covered the Fed's most recent speculation, an additional $600 billion worth of "quantitative easing" designed to stimulate the economy and keep interest rates low.

I always stress the importance of focusing on a security's price action because, well, that's what we trade. The truth is that it's not the news, but the market's reaction to the news, that matters most. (more)