A BEAUTIFUL FALL DAY

Just a stunner, with the leaves turning and with the corn cut, deer and turkeys all over the place, the Fly Over Zone is looking good.

Not so much Over There, however, as Sr. Draghi was very muted in his presser yesterday leaving a lot of questioned unanswered and puzzled looks all around as people tried to determine just what was the policy of the European Central Bank.

As for the continuation of the bank's QE program beyond the March, Mario said the subject never really came up at the bank's meeting.  How's that again?  Best he could do was to suggest that it might well be continued but just how and with what assets...no comment.  That's actually a rather good question by the by, as there isn't a lot of eligible paper out there and it is not expected that issuance is going to increase anytime soon which means the ECB will be looking at more corporate paper or--as has been suggested--equities which puts them into never-never land indeed--and brings us to the next big issue which is how does the institution deal with the banks under its charge.  The answer...clearly it doesn't know.

Sr. Draghi said all the right things; banks need more capital, they should consider mergers, they should lend more (to whom?), they should restructure, all are which are fine and dandy except that the manner of accomplishment of the same was left for another discussion.  Amusingly, suggestions have been made regarding the purchase of new equity by the bank itself which would put it in the position of regulating themselves (to the extent it regulates anything); a real confidence builder to all concerned.  Of course the bank could purchase some sort of capital qualifying debt and reduced market rates (assuming anyone knows what a market rate is these days) or perhaps increase (to at least zero) the rate banks earn on deposits with the ECB which would certainly increase earnings modestly but at the same time increase the disincentives for increased lending in a poor credit environment and increase the crap storm of political thunder focused on yet another bail-out for the banks.  No. Gratzie.

While this was going on Over There, according to the WSJ,  Minouche Shafik, a deputy governor of the Bank of England, was tell a bunch of regulators and bankers Over Here that the $275 Billion in legal costs over the past 9 years translates into $5 Trillion in lending capacity to the real economy.  Now how she came up with that number I haven't a clue but finally there seems to be an understanding that "attempting to reestablish conditions of trust" as Billy the Dud put it in response may actually have costs that have not been factored into the overall equation.  Especially when nobody really has a handle on what has happened to the $90 odd Billion in fines extorted from the industry in this country alone by the Feds and the states, except that we know nearly $500 Million has found it's way to "community organizing groups" (for financial "education") otherwise known as The Democratic Party, Inc.

But who cares.  Another even better day tomorrow.  And what a night.  The Cubbies are one game away from The Show.  Waveland Avenue for three hours or so will be the center of the universe.  The White House?  Forget it.  Cubbie Bear....hey HEY!