This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the newly released book, Bailout Nation

With futures deep in the red, let’s take a look at how markets do after big quarters. The quarter ending September 30 saw the Dow putting in its best quarter since 1998, up a solid ~15%.

With everyone waiting for a pullback, and yesterday (Thursday] and today [Friday] viewed as the probable start, perhaps its time to review some history. What has happened historically after markets have put in record setting quarters - 15%+?

For the most part, momentum has trumped mean reversion historically. Jim Bianco crunched the numbers, and he found that “stocks returned an average of 1.33% over the month following one of these record quarters, 3.46% over the following quarter, and 9.95% over the following year”.

It is worth

This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the popular book, Bailout Nation.

OK, it’s time for round 2, Shedlock vs. Ritholtz.

You may recall that last time, Mish & I disagreed as to whether this was a recession (Me) or a depression (He). This time, the debate is over the current rally.

On Monday this week on Yahoo Tech Ticker, I discussed that we did not see evidence that the rally was ending (see “Rally May Only Be in 6th or 7th Inning, Ritholtz Says“).

Shedlock pens a response - “Rally in 6th Inning or Top of the 12th?” - and discusses the reasons he thinks the market rally should be ending soon: “The flip side of the coin is this market has advanced so far, so

This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the popular book, Bailout Nation.

I am not sure what to make of this Business Week cover: It shows an ostrich, with its head buried in the ground, making the case apparently for blind optimism.

Consider the following if you want to think of this as good advice or as a contrary indicator:

• Could this cover have come out in late February or early March? • Or, does it take a 50% rally to give nerve to the editors who made this decision?

I suspect it is the latter. Hence, why this is more likely a contrary indicator than good advice.

Excerpt:

“Sure, it has been

This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the newly released book, Bailout Nation

One of the more fascinating things about a crisis and its resolution is the post-mortems: The after-the-fact analyses that some folks do to explain what occurred.

These analyses are fascinating for what they reveal about the beliefs, methodologies, biases and cognitive failures of the many crisis watchers.

Human fallibility being what it is, we can divide this universe into 3 buckets of observers:

(1) Those who get it mostly wrong.

(2) Those who can correctly describe a small slice of what happened.

(3) Those who understand the full boom and bust - how all the moving parts came together to cause the crisis.

The first bucket is the easiest to both understand and dismiss: It contains the ideologues and market worshipers, as

This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the newly released book, Bailout Nation.

Over the past five years, I have appeared on various Financial TV shows over a 100 times. But I am also a huge consumer of financial news, in print, on the web, radio, and of course, TV. Being on both sides of the camera gives me a fairly good perspective on what does and doesn’t work on TV. I also have some strong ideas as to what is good and bad TV in terms of providing a social utility, being part of the democratic process, etc.

Indeed, this is a longstanding interest of mine. Over the weekend, I referenced the current Columbia Journalism Review (CJR) issue that focused on the role of the media in the credit crisis, stock market and economic