Despite all the ballyhoo over money flowing back into stocks, the return of mom-and-pop investors means little to how well the market performs this year.

Measuring fund flows—or the amount of cash going into mutual funds—is Wall Street's favorite new past-time when it comes to predicting market activity, and the bulls are gushing over the amount surging into equities to start 2013. (Read More: Dow Breaks 14,000 Finally; What's Next for Market)

But in the greater historical context, such moves can foretell very little.

For one thing, January almost always sees money coming to the market, and this year is no different.

Some great commentary on the stock market's rally comes from John Hussman:

The newest iteration of the bullish case is the idea of a "great rotation" from bonds and cash to stocks, as if the outstanding quantity of each is not held by someone at every point in time. The head of a "too big to fail" investment firm argued last week that stocks are "underowned" – as if every share of stock presently in existence is not actually owned by someone.

To assert that stocks can be "underowned" seems to reflect either a misunderstanding of how markets work, or a desire to distribute overvalued institutional holdings onto the unwashed muppets. Likewise, the idea of a "rotation" out of bonds and into stocks begs the question of who will buy the bonds and sell the stocks, as someone must be on the other side of that trade. Similarly, to "move cash into the market" requires a seller of stock who becomes the new holder of said cash.

If there's no rotation, however, what exactly accounts for January's massive flow of funds in equities? Well, that $30 billion or so worth of special dividends probably had something to do with it.

If I'm right about that, we should see the fund flows dry up in February. I'll keep you posted.

In the go-go years before the financial crisis, banks were regularly rewarded for aggressively playing with their numbers. Banks that could show rising returns on equity saw their share prices soar. Banks that played it safer saw shares fall. Naturally, this pushed banks to become ever more aggressive about the way they accounted for their assets.

One of the nice things about the financial crisis was that investors started punishing companies that seemed to play games with their numbers. Think of all the heat David Einhorn was able to bring to bear on Lehman Brothers and chief financial office Erin Callan. This encouraged nearly everyone to 'fess up to losses.

Now it seems we're back to the bad old days.

On Thursday, Deutsche Bank announced that it had boosted its capital ratio—and immediately saw its stock soar.

What made the capital ratio boost so unusual, however, was that Deutsche Bank didn't do very much by way of the the real world things banks can do to boost their capital ratio.

One day after the Federal Open Market Committee announced that economic growth paused in December 2012, the Commerce Department released data showing that personal income rose by the most since 2004.

The 2.6 percent increase in incomes blew away the official expectations number, which was 0.8 percent.

The biggest clue to how incomes rose while the economy stalled is contained in the Commerce Department's data about the sources of rising income. Of the $353 billion income rise, $268 billion came from dividends. That is, dividends accounted for around 75 percent of the total increase.

This is a very upbeat statement from the Fed.

A lot of people will likely miss this, however, because of the note in the beginning about growth pausing. But that is backward looking. When it comes to the future, the Fed is full of confidence.

The key change in the statement is the forecast for growth. In December, the Fed said:

The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.

On Wednesday, the Fed changed this to:

The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate.

In other words, it's gone from being "concerned" that growth would be too low to expecting that growth will proceed at a moderate pace. (Read More: Fed Keeps Stimulus Amid Signs of Weak Economy)

The immigration reform proposal from the Gang of Eight contains a provision that could require immigrants who want to seek citizenship to pay off any tax liabilities accumulated while working illegally.

There are a variety of reasons this proposal is unrealistic. Most immigrants probably don't owe any back taxes, either because they've already paid them or because their income is too low to owe any taxes. What's more, figuring out a tax-dodging illegal immigrant's past income is a more or less impossible task. It's not like there are extensive records on off-the-books wages.

But let's ignore all this and pretend for a moment that we actually identify illegal immigrants with large tax liabilities. How are they going to pay these off?

Amid all the hyper-bullishness about the stock market this year, the effectiveness of the swine flu play may be getting lost.

Yes, one of the most effective strategies has been betting on shares of companies that benefit from the higher-than-expected level of influenza cases.

In fact, a proprietary index used by broker-dealer Strategas to measure the market-flu phenomenon shows that its "Swine Flu Index" basket of stocks has been the best performer for the first month of 2013. (Read More: Flu Update: Are We Near the Peak?)

"As the flu season builds, companies related to this development have been outperforming," Strategas analysts Daniel Clifton and Jeff Rubin said in a note Tuesday.

So how does one play the flu?

Our survey of Wall Street economists reveals that expectations about monetary policy have been shifting.

Last month, the survey found that Wall Street expected the Fed to halt asset purchases when the unemployment rate reached 6.5 percent. The expectations in the latest survey rose to 6.8 percent.

That could be because since the December survey the Fed provided more guidance in its monetary policy statement, pegging a 6.5 percent unemployment rate to interest rate hikes. This suggests to markets that the end of asset purchases would be somewhere above that unemployment rate.

The market also sees the Fed halting assets purchases at a 2.6 percent inflation rate, down from 3.4 percent in the prior survey.

This is extremely important because the Fed is now heavily reliant on what Ben Bernanke describes as "signaling." That is to say, the Fed believes it can change economic behavior by using its public statements to change expectations about policy moves.

Nassim, Tyler and I talk about banks, the economy, and Davos.

Remember the great farm labor crisis of 2012?

Of course you don't. Because there was no farm labor crisis in 2012.

A report from Capital Press, which bills itself as "The West's Ag Site," makes it clear that Washington's apple growers—one of the most frequent alleged victims of the farm labor crisis—actually wound up with a record number of pickers. But somehow this still counts as a shortage.