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Will The Fed Buy EFSF Bonds?
From Peter Tchir of TF Market Advisors
EFSF, We Hardly Knew Ye...
EFSF is supposedly going to have trouble getting even 2:1 leverage! Yes, that should have been obvious to everyone. We have tried to explain why non of the leverage ideas would work. We even took the step of trying to make it work and showing how many problems there were. Leveraged EFSF has always been a figment of the imagination of some politicians who had just enough finance knowledge to be dangerous.
Eurobonds, another impossible dream, seemed to have finally been shelved by Merkel. Again, they sounded great, but were totally unworkable.
Europe has consistently waited too long to do anything, and while they were busy trying to figure out how to leverage EFSF (in spite of virtually every non sycophantic structured credit analyst said wouldn't work) the market has deteriorated. A few weeks ago, investors barely wanted EFSF bonds. Now the market barely wants German and French debt.
It is time to face facts. I think there is a solution to the financial war in Europe. It isn't pleasant, particularly if you are a mediocre bank, but it may work. In the meantime, Europe needs to do something to calm the markets so they can spend a month preparing for orderly chaos in Europe.
The EFSF should announce bonds sales to the Fed. The Fed should purchase 200 billion Eur of EFSF bonds today. They should commit to further purchases of 100 billion in Q1 and Q2 next year. The Fed has been dying to do some quantitative easing and has been looking for a liquidity crisis in need of some liquidity. It has also been looking (quietly) for ways to keep the dollar weaker.
I'm willing to say that EFSF is more of a liquidity problem than a solvency problem. There is limited capital available, and what is out there is not looking for even relatively safe European bonds. I don't think France is "AAA" but I also don't see default as anything but a remote possibility for them, so I will view EFSF's inability to raise money (and there is no way they get to even 440 billion Eur) in this market as a liquidity event. The EFSF should skip dreaming about a trillion. 440 billion Eur doesn't solve anything, but it can buy 3-6 months at a minimum to keep the markets somewhat stable so a real plan can be put in place.
I am not sure the EFSF wants to do something this simple, but they need to look at the facts and accept the reality that they can barely issue, let alone leverage up. This would give them 200 billion immediately and give the market comfort that they will get their hands on the additional 200 billion as PIIGS bonds mature. 400 billion of fresh new money should be enough to plug some holes while Merkozy and the technocrats finally try and work out some painful, but realistic solutions to the problem.
I am not sure the Fed could buy EFSF bonds, but Ben seems to have fewer restrictions than any other entity on the planet. One of the guests that I was on with at Bloomberg TV mentioned that "the Fed wants to print if the market has a sleepless night". US stocks are down about 10% from the "close your eyes and pretend it works" rally of October 27th. Could the Fed use that as a way to get involved in Europe? If they buy the EFSF bonds, it should stabilize the US stock market for a bit. It is less risky than buying stocks or HY bonds, which might have a more direct impact on stocks, but are more of a mandate stretch. They can buy mortgages, but seriously, what will that do? I think they could justify buying EFSF bonds (at low yields) in an effort to promote market stability and hence employment, and if they do it in Euro's the combination of "printing" and "buying euros with that newly printed money" should put a lot of pressure on the dollar. In spite of the inflationary risks associated with that, Ben wants the dollar weak so exports can be helped.
While doing this, the IMF should announce that they will take over all the previously agreed to bailouts of Ireland, Portugal, and Greece. The IMF should be able to do it - they seem to have enough SDR's and guarantees to do it. Rather than calling on money from their members, they should issue bonds and have the ECB buy them. The ECB can buy the IMF bonds. This shouldn't be too negative for the currency because the Fed actions would more than offset this printing. The IMF can then take care of all the previously agreed plans to those 3 countries, giving the EFSF more flexibility with its 400 billion of fresh money.
I think this is very simple and can only be used to buy time, but the Fed, ECB, and IMF would all be involved showing co-ordination that everyone seems to like. It wouldn't put pressure on the secondary bond market since they aren't really issuing and therefore aren't putting more strain on banks' already stretched balance sheets. It also seems to be less of a mandate stretch than many other solutions I have read. The IMF saves countries, the Fed does QE, and the ECB does something (ok, the ECB role is less clear, but that has been true from the start of this).
If you could figure out a way for China to play, or China and Russia, the plan would have even more credibility and might buy a few more months. Maybe China would commit buying EFSF bonds - regular bonds, not the leveraged ones that the EFSF couldn't even bother to do a term sheet for. On a side note, several EFSF members should be fired, replaced or demoted, for their performance. Trying to raise money on something so complex without even a pitch-book is just pathetic and would not be condoned at even the worst run investment bank.
Anyways, it is not a "Grand Plan" but I think would buy time to put in a real solution.
It may be a good time for Greece or the ECB to remind banks that even on Euroclear, bond payments can be made to specific holders and don't have to go out to all holders - it would be default, but banks don't hold all the cards.
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Bond buying isn't like some Black Friday Door buster deal, it's a vehicle for banks and institutions to parking their reserve requirements. Bond yields going up represents a lack of demand, but considering who the buyers are, it is more blackmail than anything else.
the mutually exclusive dual mandate monetary authority
principle strikes and strikes and strikes and strikes etc..
again but never strikes out, it is the dual mandate that keeps
on giving. all problems reduced to print more money and then
steal it before anyone finds out it was printed. it is good to
be the authority, not the king, with the mutually exclusive dual
mandate built on the system of fiat legal tender.
end the fed. germany is losing the battle of sound "money"
because the "money" is not sound, with all due respect for
a.m.'s greater integrity. but, the idea is senseless. mint the
gold, good idea.
.
NONE DARE CALL IT CONSPIRACY
Copyright © 1971 by Gary Allen
with Larry Abraham
ISBN: 0899666612
..
".. These same factors apply today. Because the Establishment controls the media, anyone
exposing the Insiders will be the recipient of a continuous fusillade of invective from
newspapers, magazines, TV and radio. In this manner one is threatened with loss of
"social respectability" if he dares broach the idea that there is organization behind any of
the problems currently wracking America. Unfortunately, for many people social status
comes before intellectual honesty. Although they would never admit it social position is
more important to many people than is the survival of freedom in America.
If you ask these people which is more important — social respectability or saving their
children from slavery — they will tell you the latter, of course. But their actions (or lack
of same) speak so much louder than their words. People have an infinite capacity for
rationalization when it comes to refusing to face the threat to America's survival. Deep down these people are afraid they may be laughed at if they take a stand, or may be denied an invitation to some social climber's cocktail party. Instead of getting mad at the insiders, these people actually get angry at those who are trying to save the country by exposing the conspirators." ....
..
@"will the fed buy..?" yes, all in the name of greater debt to create
the required liquidity to sustain the debt based enslavement model that
is the confidence ponzi we call the "monetary system". the creature from
paul moritz warburg and ... the european bankers vis a vis jekyl island and the fed,
with their mutually exclusive dual mandate to create the money supply and then
immediately steal it before it enters the real economy where debts could be
serviced. aka exploit cheap labor globally and extend credit to the point
of debt saturation and then foreclose. when the party is over the treasury will
hold all the debts and the fed's doors will be closed. we can then blame the
homeless and hungry for not attending ivy league university.
.
http://books.google.com/books?pg=PA406&lpg=PA407&dq=%22Defects+and+Needs...
.
IV. ESSAYS ON BANKING REFORM IN THE UNITED STATES By Paul M. Warburg ....
"..This prime constituent of the European banking machinery is entirely missing with us. Its existence is, however, most important. Without such paper, the government banks of Europe could not accomplish their work; and vice versa, the role which this paper generally plays in Europe's financial household is dependent on the existence of central banks. The two cannot be separated.
It is one of the main duties and privileges of the government banks to buy legitimate commercial paper, with bankers' acceptances or bankers' indorsements. As the government banks buy this paper, the circulation of the notes which they issue in payment increases, and on the other hand, as they collect this paper upon maturity and reduce their discounts, their outstanding circulation decreases. This means that they expand or contract according to the requirements of trade. However, this is not a merely automatic process. For as those intrusted with the management of the government bank see the necessity of exercising a restraining influence, they raise the rate at which the bank discounts, and in this they are generally followed by the other banks of the country. In the same way, if the government bank finds it advisable for any reason to discriminate against the paper or the securities of certain groups or individuals, general discrimination by the other banks will usually follow. It might be well to add that the European government banks are not limited to the purchase of paper, but that they also have the privilege of making advances within certain limits upon securities up to a fixed percentage of the market value, according to stated published schedules. The rate, however, at which such advances may be made, as well as the government bank's discount rate, is uniform for everybody and is, as a rule, so much higher than that of the general banks, and the restrictions as to the character of the securities on which the government bank may advance are so much more rigid, that in normal times the bulk of the business is done by the general banks. Only when the demand for money increases does the rate of the general banks begin to approach that of the government bank; but in that case the government bank will, as a rule, raise its rate, so as again to increase the margin over that of the general banks. The government banks consider themselves, more or less, as constituting the national reserve, ready to take an active part in the nation's business only in times of emergency. A distinction is, however, carefully to be drawn between the abnormal crisis and what we may call the normal emergency which arises regularly in consequence of certain economic developments, like crop movements or particular requirements for special industries at fixed periods, and which, as experience has shown, subside after a time as regularly as they
occur. When these normal emergencies arise, the banks do not unduly raise their rate, but for the time being meet all the requirements at a given rate, and allow their circulation to increase, while the reserves go down. When the government banks anticipate, however, that more than a normal emergency will have to be dealt with, they continue to raise the rates in order to protect their reserves and to force liquidation, and in order to deter all branches of industry and trade from entering upon far-reaching new engagements.
The notes which the government banks are allowed to issue are limited by the amount of gold and bullion which must be held to cover them in full, or, as in Germany, up to at least 33%. It would, however, lead too far astray to go into the details of these special regulations which govern the issue of notes in the different countries. It will suffice here to outline the general rule. Each government bank has a very decided interest in keeping its gold holdings as large as possible, and in preventing the gold from leaving the country. If an augmented demand for money and credit accommodation increases the amount of notes outstanding, the government bank, by raising its rate, purposes not only to encourage a general contraction of business, and to force the general banks of the country to contract, but also to attract foreign money into the country. If England has a private discount rate of, say, 6%, that is, if first-class commercial paper accepted or indorsed by banks can be bought on an interest basis of 6%, and if at the same time, there is in France a discount rate of 4%, it stands to reason that the big French banks and the French public will invest in English bills, and that French money will go to England. The same holds good, of course, as to German, Austrian, Russian, or Scandinavian bills. It is, for instance, well known that at present, while rates in Germany are high and in France comparatively low, hundreds of millions of German paper are held by the French banks.
The French banks would not buy the individual note of an English, German, Russian, or Scandinavian merchant whom they do not know; but they do know, and must know, the value of the acceptance or the indorsement of the foreign banks, which offer and indorse or accept this paper. They would not buy this paper, unless they knew that it could be rediscounted at any time through the existence of a central bank in the home country. None the less, however, the bulk of the business transacted by a central bank is only a fraction of the total business of the country, and is, in normal times, limited almost entirely to the purchase and collection of short bills. The mere existence of the central bank, however, enables the general banks to discount freely; and as everybody thus discounts freely, there is the widest possible market for discounts even without any active purchases by the central bank.
While we cannot attempt to give any full description of the working of central banks, it may be well to add that some, like the Banque de France and the Reichsbank, have hundreds of branch offices, spread all over the country, which, in Germany in particular, have developed an admirable system of collection and of transferring moneys from one place to another. It may also be interesting to note that, contrary to a widespread idea, the central banks of Europe are, as a rule, not owned by the governments. As a matter of fact, neither the English, French, nor German government owns any stock in the central bank of its country. The Bank of England is run entirely as a private corporation, the stockholders electing the board of directors, who rotate in holding the presidency. In France the government appoints the governor and some of the directors {regents). In Germany the government appoints the president and a supervisory board of five members, while the stockholders elect the board of directors. The German government receives three-quarters of the profits after the stockholders have received a dividend of 3j/2%. Thus the central banks are independent of direct government interference, or there is a joint control by government and stockholders. But the government is the largest depositor of the bank, and is thus obviously, both for its own credit and for the welfare of the nation, vitally interested in maintaining its credit at the highest possible point.
" ...
Over-levered banks are in no position to underwrite sovereign debt when their balance sheets are as sickly as they currently are (even with 'relaxed' accounting standards), so the next step is to either a) Nationalise banks and stick the new bonds/gilts/etc. on their balance sheets, b) stop running deficits or c) encourage recapitalisation of the banks from petrodollar rich entities.
There just is not enough money (or leverage, under the current rules) to carry on spending the way we are.
I was waiting for a /sarc at the end of the post...?
@Peter Tchir: this headline is much misleading! You forgot to write 'should', instead of give the impression the FED is thinking about this.
Written like a trader who stands to lose his shirt.
Or like Ben Bernanke writing under a pen name.
Or like someone for whom fear has emptied both his bowels and his bladder.
I think we all need to be careful about seeing China as the 'great white knight'. Their position is not too dissimilar from ours. They report GDP/ debt ratio of 34% yet this does not include real gov debt. Opaque is the new transparency when China is concerned.
Psst, I know this guy Corzine, he's gonna make billions buying up euro debt shit. Brilliant
That's what happens when you don't stay current on your memos.
Bernanke has SO much money that he just want to buy any solid turd surfacing the water.
Consider that the same exact reasons the business model for 30 year home loans might possibly now be structurally challenged in a contracting economy given at the below website :
http://www.zerohedge.com/news/observations-engineer
Now consider if the same type of reasoning might also indicate that bailout loans or bonds, and even deficits in a contracting economy may not be very attractive to an entity putting up the funds and expecting any type of return on investment. ROI may be very hard to get, and losses might even occur instead.
Once upon a time, there was this dude who use to rip apart Goldman Sachs, the Fed, and ponzi schemes on a daily basis.
Now all that dude can talk about is Europe and how to trade it.
And he he is constantly quoting Goldman instead of bashing them.
Will the really Tyler please step forward, cuz this dude is not Tyler!
TRADING is the problem. This guy is encouraging you to trade. As
Can you really afford to takd thd advice of someone who is probably blogging FOR golldman at this time?
As we have learned, Goldman trades against its clients and it will be a matter of time before you all of your money following Tyler's advice.
You all will be walked into the trade of death if you do not want up to the idea that both Tyler and Alex Jones have been hijacked by the opposition.
If this comment is scrubbed oyt in minutes, you know tgat I am correct!
So I read this again. Peter is trying to be funny. I believe he put this 'piece' (of funny shit) together as a joke. The punchline would be if such an insane and doomed set of crazed and sociopathic actions were to actually occur.
Surely not in this rabbithole?
Eh?
Did you know that thd Fed now owns over halve the mortgages in the US? WOW!
Since they purchased 1.5 trillion of mortgages from your friends at Freddie and fannie mae. Reluctently of course as the Bernske states.
I suppose those CDO's are not so toxic if you give them some time to thaw out. Goldman froze them to create a liquudity trap on their best clients.
But at tbd bottom of thaf bag is someones home, and the Fed has been buying it all up.
I suspect that the fed is expecting Hyper inflation and that home prices will rises exponentially. After one more crash of course.
And there the Fed will sit , as biggest land lord in America!
So what it is worth, stay in your home and help others stay in theirs and of you can, buy many properties into this next down turn.
Selll all your papet assets, buy houses and dont listen to Tyler,
Who never has a solution.
and the fed owns freddie and fannie 89% also. and next - guess what is on the list? buying countrywide 1 trillion from bac. either that - or bac goes under. and then the fed buys it anyway.
so, might as well buy it out now and let bac stay 'solvent'.
The solution may be to face the music, let the banks involved go bust, let the countries involved face facts; no soution is going to occur by papering over the problem (debt for more debt) buying more time to fix things - it hasn't for thirty years, and it won't now.
http://market-ticker.org/akcs-www?post=198086
All you need to know is in the "Helicopter Ben" speech from 2002:
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
"For example, the Fed has the authority to buy foreign government debt, as well as domestic government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt.16
I need to tread carefully here. Because the economy is a complex and interconnected system, Fed purchases of the liabilities of foreign governments have the potential to affect a number of financial markets, including the market for foreign exchange. In the United States, the Department of the Treasury, not the Federal Reserve, is the lead agency for making international economic policy, including policy toward the dollar; and the Secretary of the Treasury has expressed the view that the determination of the value of the U.S. dollar should be left to free market forces. Moreover, since the United States is a large, relatively closed economy, manipulating the exchange value of the dollar would not be a particularly desirable way to fight domestic deflation, particularly given the range of other options available. Thus, I want to be absolutely clear that I am today neither forecasting nor recommending any attempt by U.S. policymakers to target the international value of the dollar."
16. The Fed has committed to the Congress that it will not use this power to "bail out" foreign governments; hence in practice it would purchase only highly rated foreign government debt.
If the threshold is indeed "highly rated" foreign gov debt, then expect any such action to take place sooner than later.
George ... The Greek ... From Canada
fuck you peter....you buy the goddamned bonds bitch
"The EFSF should announce bonds sales to the Fed. The Fed should purchase 200 billion Eur of EFSF bonds today."
Nooooo, that's just another kick down the road "to buy time" using US taxpayer liable money. To "buy time" for what? For 17 nations to decide on anything? No, the only thing that's going to get these clowns to do what needs to be done (balance budgets) is for the market to force them into it.
Agreed but until the market forces them into it, they can keep on kicking the can down the road.
George ... The Greek ... From Canada
"Stop the Looting, and Start the Prosecuting"
I love this Idea.
It's grand.
Bail them out and print trillions and trillions of Dollars.
It gone to far.
Who are your friends in tough times?
If the USA bails out Europe they will be in love with us again. For another 50 years. I think. They did love us, didn't they?
To this and all theives and meddlers. DROP DEAD.
Want those bonds purchased? Buy them with your own savings.
I made this call to a bond trader buddy of mine at dinner on Wednesday. I called for $500 B vs $400 in this article.
It's not the right thing to do - but it is the predictable thing given the way CB's and sovereigns have acted so far.
I'm not going to bother fighting it, or getting angry about it. I'm simply going to position myself to profit from it while continuing to protect myself from the inevitable fall out.
I suggest all of you do the same and thank god you're not part of the clueless Jersey Shore / Kardashian reality TV zombie masses.
Regards,
George ... The Greek ... From Canada
Better than buying bonds would be for the Fed to buy European real estate.
They should have tried to sell this EFSF garbage on Black Friday along with all the other crap. Just declare that it's marked down 90% starting at 10PM Thanksgiving night at Walmart and American shoppers willl be killing each other to get at them.
and why should even 1 tax dollar go towards europe from my side? the FED has a printing press, i unfortunately, DO NOT. if they do somehow manage to miraculously bail europe out and at the same time get their own defe-shit together, i am sure all this would lead to a tax increase somewhere down the line and fuck that.
anyways you keep going on about buying a few months time. these retards cant do shit even if they get a whole year i dont think its a question of time. if they had the right people doing the right things n investors thought they were worthy- THEY WOULD GiVE THEM TIME.
and thats how the market is supposed to work
and why should even 1 tax dollar go towards europe from my side? the FED has a printing press, i unfortunately, DO NOT. if they do somehow manage to miraculously bail europe out and at the same time get their own defe-shit together, i am sure all this would lead to a tax increase somewhere down the line and fuck that.
anyways you keep going on about buying a few months time. these retards cant do shit even if they get a whole year i dont think its a question of time. if they had the right people doing the right things n investors thought they were worthy- THEY WOULD GiVE THEM TIME.
and thats how the market is supposed to work
"
To transform the unsalable individual part ownership or individual indebtedness into stocks and bonds having a wide market, and to standardize merchandise, is an important step in the development of this time-, risk-, and currency-saving device, without which modern banking is inconceivable.
We have to add one more factor and a most important one. The partial replacement of money by instruments of credit must needs bring about, as a logical consequence, the necessity of reserves of money to meet these credit tokens, to redeem which cash may of right be demanded. How large these reserves must be depends largely on the strength of the confidence—the credit—upon which the general structure is erected, and on the degree of perfection with which these reserves may be made available.
An ideal banking system is that which provides for the legitimate needs of a country at moderate rates with the maximum use of credit and the minimum use of cash, which checks illegitimate or dangerous expansion or speculation, and which avoids or minimizes as far as possible all violent convulsions.
We need not emphasize the fact that the European system comes very near accomplishing this ideal, while our system has proved palpably inefficient. Recent events have again brought it home to us that the richest and soundest country of the world went into a disgraceful state of temporary insolvency, while European nations, poor by nature and loaded down with much heavier burdens than we, have weathered similar storms without any such panic and wholesale destruction of property values. Let us consider, then, wherein our system differs from theirs, and let us see which component parts are missing in our machinery.
"
.
paul moritz warburg 1907
.
http://minneapolisfed.org/publications_papers/pub_display.cfm?id=3815
"The Panic of 1907
Early in 1907, New York Times Annual Financial Review published Warburg's first official reform plan, entitled "A Plan for a Modified Central Bank," in which he outlined remedies that he thought might avert panics, like the great one that would occur later that year. Furthermore, he identified what he saw as the "evils" of the system in the United States — the "decentralization of reserves and the immobilization of [commercial] paper." To remedy this, he advocated the development of an American discount market and a European-style commercial paper. This system was based partly on a concept known as the "real bills" doctrine, which maintained that the money supply should vary with the short-term "legitimate" needs of business and commerce. By allowing banks to borrow only against short-term loans, the real bills doctrine, in theory, provided liquidity through the discounting (or selling) of loans and at the same time restricted the ability of a central bank to expand the supply of money. Warburg also proposed the creation of a "central reserve" or central bank that would hold the reserve funds of member banks so that collective funds could be made available to a bank in need of liquidity. Both the discounting and reserve concept, he contended, would help make money and credit more elastic and keep interest rates stable." ...
Le "Melt Down" is going to occur, without silly "lesse, if the IMF issues bonds then the ECB could get around its MANDATE and buy those bonds to support and monetize against its charter, while the US FED (which will unlikely be able to bail out the US TBTF banks let alone Europe) uses its unilateral power ... "
The reason is because its funny money chasing funny money. The FED wouldn't be putting real money there; its just ledger entry in a world of fake accounting. Where did the FED come up with the $13T of 'loans' it used to stabilize in 08-09? Did that money actually represent wealth, or was it just ledger magic?
People are trying to feed themselves at $8-$12 per hour, and their work HARD for those wages. Yet our institutions magically "create" billions and trillions by pushing buttons. This makes a complete mockery of the actual WORK that is needed to create wealth. True wealth comes from effort and work; not from computers.
People will catch on; confidence will be lost and the system will implode.
maybe - but not until i grab that 4th flat panel this weekend at a good price. --- with money i don't have.
one more flat panel, and another 6 months not making mortgage payments doesn't get me terribly concerned about the fed, europe, or monetary policy.
Won't work. Only idiots think it will.
It's pure sophistry. Come up with more bullshit, and somehow because it's a newer scam, it's legal, and will allow the (broken) economy to heal.
None of this happening, and all of it is fraud.
Glalss-Steagall
I will keep saying it.
This is a game of Chicken between Draghi and the vigilantes. It will have to come to a sheer panic for this to be resolved.
http://thechinonomist.blogspot.com/2011/11/dont-call-me-chicken.html
Horrible but vaguely plausible. Have to feel that if something like this happens before January 3rd, it would mean Ron Paul as the likely Republican Presidential candidate. Interesting.
But the real problem is not solved. It just kicks the can down the road throwing more, much more good money after bad.
I think that at the end of the day, something needs to be done about the Euro. Further Euroland integration does not do anything for the internal Euro price imbalances, which lay at the root of the problem. Creating a Eurobond does not resolve the competitivness gap between Germany and Club Med.
What needs to be done is to define where does Euroland NEED to be at the end of the process. And the first step, just like with an alchoholic is always the hardest, and that is admitting that he is an alchoholic. The EU needs to admint that the Euro does not work, and put in place a credible plan to unwind it. It's just that simple. And at the same time, just that difficult.
Can the FED print new notes using EFSF?
Public Law 106-122
106th Congress
An Act
To amend the Federal Reserve Act to broaden the range of discount window loans which may be used as collateral for Federal reserve notes. <<<<<---
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That the
third sentence of the second undesignated paragraph of section
16 of the Federal Reserve Act (12 U.S.C. 412) is amended by
striking ''acceptances acquired under the provisions of section 13
of this Act'' and inserting ''acceptances acquired under section 10A,10B, 13, or 13A of this Act''
NOPE
The FED can monetize foreign bankers acceptances,drafts, or bills of exchange that have no more than 3 months to run.
"I'm willing to say that EFSF is more of a liquidity problem than a solvency problem" Does anyone see a credibility problem with this author?