Here Is Today's 3pm Rumor...

In true save-the-market style, as 3pm ET comes around we have another rumor from Europe. This time it purports to be the creation of an investment fund, as a subsidiary of the EFSF, which will 'attract' external capital sources, via tranching of returns, to enable the purchase of sovereign debt in primary and secondary markets. Headlines, via Bloomberg, for now suggest this is yet another strawman and given the concessions on this morning's EFSF issue, just who exactly is going to be investing in this levered product and why? Equity markets remain 'exuberant' relative to credit though HY is slowly catching up to the intrday heights of the S&P 500 futures.

*EURO PLANS FOR INVESTMENT FUND IN DOCUMENT FOR EUROGROUP TALKS

*EURO `CO-INVESTMENT FUND' WOULD BE SUBSIDIARY OF EFSF: DRAFT

*EURO `CO-INVESTMENT FUND' TO ATTRACT `EXTERNAL CAPITAL SOURCES'

*EURO FUND RISK SHARING ACHIEVED VIA `DIFFERENT CAPITAL LAYERS'

*EURO FUND WOULD BUY SOVEREIGN BONDS ON PRIMARY, SECONDARY MKTS

It really doesn't sound like anything but the beginnings of the structure of the SIV for the EFSF that we have been discussing for a couple of weeks now - but of course that is irrelevant - more leverage and more 'solutions' must be positive for US equities!