David Bowie caused credit crisis

A commission of republicans and democrats is studying the reasons how the credit crisis erupted (by the way: a nice time line for the credit crisis: http://www.money.co.uk/article/1006239-tracking-the-global-recession.htm). The republicans have leaked that it is the faut of government that forced Fannie Mae and Freddie Mac to give subprime mortgages to individuals that wanted to buy a house. It is not the fault of complicated financial constructions of banks, no it is big government with its bankrupt GSE's that cause huge losses for tax payers.
Democrats and people that can count to ten don't take this version for granted (Fannie Mae and Freddie Mac were initially rather conservative, only at the end of the subprime hype they joined the party). Anyway the leaking causes that you willl not get a generally accepted version what caused the credit crisis.

You don't need big studies: it is already known who has caused the credit crisis: it is David Bowie (http://www.mirror.co.uk/celebs/news/2009/01/12/david-bowie-s-back-catalogue-bonds-may-have-started-the-credit-crunch-115875-21036649/).
David Bowie (his advisors) invented in 1997 securitisation. He discovered how you could cash immediately with securitisation of Bowie Bonds the future revenues of his music. He didn't receive any longer the royalties of his music, but he had now the proceeds of the Bowie Bonds. The innovation of David Bowie triggeerd a lot of followers and so a securitisation markets was generated in all kind of difficult constructions. Without David Bowie the credit crisis should not have happened, at least it should have lasted longer before it should have erupted.

Inventions are plentiful, enough for recovery optimism

Strategas was in a bad mood that the PE's have gone down so much,while bond yields and inflation are so low. There are too many uncertainties and the US government is not nice for three sectors in the economy (financials, pharma and energy.

The confidence hasto come back and that is only possible when the US starts to believe again in progress. Strategas had the list above of the most important inventions. Around these years there have to be a lot of new ones. What these inventions are you normally don't know, that becomes clear only after decades. Those inventions were already around for decades before the use of it became general. Now we have some suspicions (DNA gen therapy, iPhones/pads and special gadets, speach recognition, robotics, Facebook, Google search, electric cars, durable energy like cheap solar eenerg, batteries that last very long), but it remains guessing.
All these new inventions and more important new innovations like iPad/iPhone etc should be enough for a restorement of confidence, but maybe it is because the US is no longer that dominant in innovations as in nineties (they did 95% of the important innovations at that time).

That confidence is now present in the Emerging Markets and much less so in the US and non existent in Europe ex Germany/ Scandinavia tigers.
It will come back when growth recovers further and the unemployment rate declines substantially. That is the most probable scenario for the next five years, not that of the New Normal. There are enough possibilities to make new innovatve products and services at hgh margins. But it is only for the Emerging Markets to have tailwinds eevrywhere: from convergence to our prosperity with a growing middle class, urbanisation and good non corrupt governance, hugely improving education etc, low debtsand high savings and especially the favourable demography with a fast growing working population and lower depedency rates.
The West will see back some growth from the Emerging Markets and mainly from new profitable innovations and several new suddenly big companies like Netflix.

First Day of the Month

In the month the first half is better than the second. Especially the first day of the month is excellent, see chart of Bespoke.

Monthly Equity Cycle

Bianco had today un update what the monthly performance of the S&P 500 has been.
September is the worst month, November and Decemebr the best.