It was a relatively calm (but busy) day in the markets even as stocks closed flat on the day.

In the bond markets, the early morning jitters were shaken off as an abundance of cash was seemingly put to work with investors buying both primary corporate bond issues and Treasury bonds.

With money leaving the high yield space, there is more cash waiting to be put to work and much of that is finding its way into the investment grade bond space.

With interest rates as low as they are, issuers continue to sell bonds into a receptive market.

The fast pace of corporate bond issuance will likely continue through the remainder of this month.

Up until today, secondary off-the-run bonds lagged the primary market; today we saw secondary bonds catching a bid as well as demand kicked in.

Dallas Fed Chief Richard Fisher, ever the voice of reason for the markets, made an eloquent case today for fiscal reforms and measures to stimulate the economy in a sustainable manner (sustainable being the operative word).

While it may be tempting to print money à la QE (quantitative easing; it is an election year after all), it is important to keep in mind that the impact will be purely cosmetic and fleeting.

Moreover the long-term ramifications of printing money are dangerous with increases in core inflation and the long-term debasing of the currency.

Treasury bond yields will remain relatively low in the medium term even without a QE program.

This year (and possibly next year) will be marked by a flight to quality effect; there are no real alternatives to U.S. government bonds.

But if inflation takes hold, and once the inflation genie is out of the bottle it is extremely difficult to put it back in, the lower and middle classes will suffer more than they already have.

Over dinner with a savvy market maven last night, this player was shocked to learn some statistics about the steady erosion of the manufacturing and industrial base in the world's largest economy.

Ironically, the large corporations that are sitting on piles of cash have outsourced much of their factories offshore.

The little guys who do the bulk of hiring continue to suffer under the yoke of an oppressive tax regime; tax cuts for small and medium-sized business enterprises are desperately needed.

Government can also play a more creative role to change the structural imbalances in the employment picture.

Not to steal Germany's pudding, but a lot can be learned from their successful marriage of an export oriented private sector and a government that facilitates conditions for the private sector through education policy, tax incentives etc.

It will be a busy calendar tomorrow with players watching initial jobless claims, consumer price index inflation, and leading indicators numbers.