As we speak, the great government debate rages on. This debate concerns the question of further stimulus activity. Many are pointing to the poor economic news we have received in the past few months as evidence that the government must take additional steps such as bringing back the real estate tax credit and additional incentives for small businesses. Others are saying–enough is enough.

In looking at the economy and what will snap us out of what has evolved from a recession to long-term "doldrums," there is a lot of finger pointing going on. We are not talking about politics here because finger pointing by politicians is not news. Many have pointed to real estate as the culprit as the collapse of the real estate boom led us into recession. The shift then moved to consumer confidence.

What other explanation could there be for the sharp rally experienced at the start of last week? The Dow was up over 200 points on Monday and oil prices headed over the $80 per barrel mark. All the while the economic reports continued to show tepid growth and the Federal Reserve Board continued to make statements that can only be described as cautionary.

The government can’t stimulate the economy forever. As a matter of fact, with the budget crunch faced by state and local governments right now, it looks like the government will be a negative factor with regard to job growth going forward. Eventually companies need to start hiring.

There are many "spreads" between financial instruments. In theory, certain financial indicators act conversely to each other. A prime example is the stock vs. bond markets. In a perfect world, if we get bad economic news, this is bad news for stocks but good news for bonds. In other words, the stock market should fall and rates should go down, as the bond market rises as rates go down.