On the first trading day of 2012, flows were decidedly light even as stocks rallied and the overall market tone felt better.

It remains to be seen what direction the markets will take for the first quarter.

The big stories were from the Financial Times; one was on the implications for bond investors of the Volcker rule (negative) and another was on the growing U.S. corporate pension funding gap.

Iowa is in the news for reasons other than wrestling with the Republican Presidential primary search under way.

Chatter continues on the Standard & Poor's rating agency versus France saga.

In corporate credit, primary bond new issues were relatively quiet despite the stock rally.

If corporate bond new issues start cranking away (January is typically a heavy issuance month) that will be a bullish signal as it will demonstrate investor demand.

Citigroup tapped the market with a large bond issue in the inaugural salvo for a financial company.

There will likely be many more financial companies looking to access the capital markets.

This player spent much of the past week and New Year's eve in beautiful and sunny Charleston, South Carolina, as the guest of Ambassador Philip Lader and his wife Linda at the Renaissance Weekend gathering.

Renaissance Weekend was truly humbling, with some very accomplished intellects from the worlds of law, industry, government, the media, finance, technology, academia, and the military in attendance.

Conversations, while strictly confidential, flowed freely through breakfasts, lunches, dinners, and discussion panels.

While much attention was paid to risks facing the cause of humanity and remedies, this writer arrived back in Manhattan feeling rejuvenated and far more optimistic about the broader long-term outlook for the world economy.

Ultimately, it will be human capital, built up over the course of generations and nurtured by the rule of law that will power things back on to the right track.