The auction rate bond market grew from inauspicious beginnings in 1985 to representing a significant fraction of the municipal bond market in 2007 with a total of 603 issuances that year raising more than $35 billion in capital. Since March of 2008 not a single auction rate bond has been issued....

The market for auction rate securities (ARS) made headlines during the second week of February 2008 when auctions at which the bonds' interest rates reset experienced a wave of "failures." Contrary to headlines that attribute the failures to a "frozen" market or investors' "irrationality," we...

The market for Auction Rate Securities (ARS) made headlines during the second week of February 2008 when auctions, at which the bonds interest rates are reset, experienced a wave of ldquo;failures.rdquo; Contrary to headlines that attribute the failures to a ldquo;frozenrdquo; market and/or to...