The Dow rose in 35 of the last 60 Augusts, falling only 25 times, but August has been the second-worst month for the Dow and S&P since 1987.

Fed Chair Ben Bernanke said yesterday that he expected a recovery in consuming spending. Media headlines blared the good news and stocks rallied. The details of 'sometime in the next several quarters' got lost in the shuffle however. Nor did the media report that Bernanke has rarely made a prediction that has turned out to be correct.

In my mind, a positive spread ought to have a positive impact on equity prices. I found that if I take out the period from October 2007 to March 9, 2009—yeah, I know, that’s a very big if—then numbers start to make more sense. Suddenly, a positive 10/30 spread is good for stocks.

Companies are awash with cash because of this political and economic uncertainty. For now, companies seem to be using their excess cash to refinance their existing debt and raise dividends before higher tax rates on dividends go into effect. If the 2003 tax cuts expire in 2011, taxes on dividends could soar from today's 15% to 39.6% next year, even though President Obama has implied that dividend tax rates should match long-term capital gains rates, at 20%. Many corporations are also taking advantage of low interest rates to lower their interest costs by refinancing existing debt.