Big rally today. I would like to believe that this was the pivotal 90% up day on the Dow that will signal the start of the next bull cycle. I doubt that it is but I would be happy to get on with the next bull when it chooses to start. In the meantime though, we will have to see some follow through in the next few days. One day is no trend. And as we have seen vividly over the past many weeks, huge one-day moves up have not, so far at least, changed this bear market's course.

It could be that after awesome selling pressure in the past 2 months, desperate sellers have finally been exhausted. At least for a while. I believe that deleveraging and institutional margin calls have been the dominatrix of world markets for the past many weeks. This has forced the Lowry's Selling Pressure Index to record levels day after day. But even with the huge buying today Lowry's Selling Index only dropped 4 points. Interesting. Maybe this was just another short squeeze rally today. World markets have been technically very over-sold, so a big bounce was within the realm of possibility...

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Excellent interview clip of Economist James Galbraith (John's son) talking to Bill Moyers about his new book and the failure of governments and institutions to safe guard our financial system (again, this generation). He gives excellent perspective on how the present crisis stacks up against a long history of financial crisis. He also explains why the US is still in many ways better off than most other countries in the world. This fact has eluded many gold bugs and US dollar bears over the past year, as they are confounded by the relentlessly rising greenback.

I did not study John Galbraith's body of work until I was 35 years old, in the late '90's when I initially stumbled on to his unassuming little book: "A Short History of Financial Euphoria." If you have not read it or his "The Great Crash 1929," you should. They are a great read, entertaining and incredibly enlightening about human behaviour and our cycles.

I have thought about Galbraith Sr. frequently in the past couple of years since his death. I know he would not be surprised about the present state of world markets. History, in this case, has been very much prologue.   more »