JReality

Our Run-In With Auction Rate Securities - And What It Taught Me About Markets

Harry Newton, the link within your message doesn't work without the 'www', however www.auctionratepreferr... works.

Our Run-In With Auction Rate Securities - And What It Taught Me About Markets

User 160537, maybe the author's ARS positions were higher underlying quality or had a higher reset rate than the positions you own?

Our Run-In With Auction Rate Securities - And What It Taught Me About Markets

I still have large positions in Auction Rates because I don't need the cash right away, and I'm getting great yields on quality issues. The party won't last forever because they will start to be called back by the issuers as early as a few weeks from now.

Even though the problem is ultimately the brokers and bond insurers fault (for getting involved with risky investments that caused this crisis), the taxpayers will ultimately be footing the bill. Many states also purchased "interest rate swaps" which were supposed to hedge them against rising short-rates in general, but did NOT hedge them against this particular situation. The investment banks sold the munis, and ultimately the taxpayers, a bill of goods!