The EFSF is readying a 7B Euro issue and is proud of its AAA designation. The US Treasury Sec. has flown to the confab but his advice will not be taken openly. The US feels a super sized rescue facility is the best policy. The EFSF is an evolving entity with the ESM. A Euro Bond issuing agency is being discussed and more official chatter will roll through the headlines this Fall.
The TALF,( http://en.wikipedia.org/wiki/TALF ) originally designed at 200B but quickly ramped up to 1T is the model for the Euros now. This program was a "success" with efficacy clearly a function of heft. Time is running out and Euro-Committee players move at a very deliberate pace. The CB Swap lines show Central Bankers can still act rapidly in the face of more static offices.
These developments, and more importantly the still awful domestic data, will pressure the Fed to move for bottom drawer tools in the kit. We do not think Op Twist does much good but we will get a bit of it. We do not believe short securities will be sold. Passive duration extension will occur. IOER cut is much harder to call even though the swap lines will help offset the negatives. Around the Globe, the answer to the Debt Crisis remains "Lets throw more money at it."