When the Fed floods the system with liquidity, or executes some other transaction to reduce risk in the financial system, the primary beneficiary is not the industry targeted by the Fed.  Rather, the biggest winners are the hottest sectors, both prior and after the Fed's actions.

For example, when Easy Al took interest rates down to 1% and held them there for a very long time, it did not stop the Nasdaq from falling 77%.  Instead, the liquidity flowed into housing, bonds, commodities and various other asset classes.

I will be traveling on business over the next few days. I'll resume posting when I return....

After spending my life on Windows, I purchased a 20-inch iMac today, my first Apple product ever. What a thing of beauty. I'll set it up tomorrow and get it running. Hopefully!...

It's like a bad B movie repeating again and again.President Hugo Chavez announced Sunday that his government's sweeping reforms toward socialism will include the creation of collective property. Vowing to undermine capitalism's continued influence in Venezuela during his television and...

From Barry Ritholz over at The Big Picture....

I'm looking forward to The European Economy Since 1945 written by Barry Eichengreen of Princeton. Here are exerts from a book review in The New York Times.Postwar European history falls neatly into two periods. From 1945 to 1973, the countries...

Being unequivocal and unrepentant supporters of free trade and globalization, we here at Running of the Bulls answer a resounding No! However, when economic shifts occur, especially enormous, once-in-a-century shifts such as the opening of China today, it would be...

From Don BoudreauxThere are two kinds of people in the world. Members of the first group think of jobs as being rather like boxes, each of which has a monetary figure on it as well as a set of levers...

In an attempt to drive more traffic to my blog, I have decided to post marketing materials for the new hedge fund started by that guy who destroyed Amaranth Capital. See, the lawyers for Solengo Capital have been threatening to...

I am a bear, but I am not an uber-bear. I expect a 10%-20% correction, then a move sideways for awhile, not a 30%-50% collapse guys like David Tice are predicting. Maybe they're right, I don't know. But maybe the...