The Latest $330 billion Catastrophe
Feb 15, 2008
Here's an article by Peter Cohan posted February 15 that tells of the latest financial catastrophe in another sector of the economy. He writes:
"The latest of these [catastrophes] is auction rate securities (ARSs) -- a $330 billion market for long-term bonds that are supposed to pay lower rates because their interest rates are set through auctions. The New York Times reports that municipalities who issued ARSs are suffering because 1,000 of these auctions failed and instead of paying 3% interest rates, they have to pay 20%. And if that wasn't bad enough, the investment banks that oversee these auctions are refusing to let investors withdraw their money."
Where will it end?