Risk Aversion returns…  Money Multiplier dampens stimulus effects…  TIC flows show concern of foreign investors… China back on growth track… And Now… Today’s Pfennig!

One of the companies that hasn’t yet reported its second quarter earnings is Massachusetts-based UniFirst Corp. (NYSE: UNF).

“Little else is required,” Adam Smith, author of The Wealth of Nations, once remarked, “to carry a state to the highest degree of affluence from the lowest barbarism but peace, easy taxes and a tolerable administration of justice; all the rest being brought about by the natural course of things.”

For investors who had money in the markets last year, October 2008 is a month that will not soon be forgotten. In those 31 days, the S&P 500 – a major indicator of the stock market at large – fell almost 17%, reversing the gains of the previous five years.

American markets at a standstill… can the Far East drive stocks forward? … Chris Mayer on buying “what China needs, but can’t make for itself” … Dan Denning’s pair trade for the next decade … Bill Bonner and Goldman Sach’s CEO on the current “bull market” … Plus, a CEO pay debate fills our inbox… your letters and our response, below…

The top 30 most volatile days for stocks since 1969, bar one, all occurred in 2008. The one exception was in November 1987, shortly after the Black Monday wipe out. These are the startling results compiled by one of our favorite market gurus Dr Van Tharp.

There is quite a bit of discussion right now about if this market rally is real, and if it is how long it can last. The last round of corporate earnings weren’t as bad as many expected, and there seems to be some tempered optimism that this could be a sustained rally.

Our own bearish beliefs remain unchanged. From day one, we’ve said the current rally is one for suckers. But we admit suffering certain twinges of regret; stocks have proved more resilient than we expected. Here’s a quick bullet list of why we remain bearish on stocks’ near-term prospects:

Let’s take a look at the positive action driving the markets…Just as I predicted, the broader U.S. stock market continues to surge higher.