Liquidity Freeze

 
 

The purpose of this web site is to provide basic information regarding ARPs.  All the things that should have known before buying them.  There is a lot of information on the web.  However, we are in the ‘fog of war,’ and to get at the some of the more interesting material requires wading through the dreaded ‘tmi’.  Too much information.  Too much emotion.  You see people going through the stages of grief - denial, anger, bargaining, depression.  But we are still in the early innings of this mess, and there is no certainty regarding a final resolution and therefore acceptance.


In some ways, uncertainty is more difficult to deal with then loss.  However, knowing the facts may be helpful in putting this into perspective.     

Liquidity Problems for ARPs

Closed End Funds

This site focuses on one part of the auction rate market, securities issued by closed end funds.  In general, these securities are strong credits, and the issue is purely one of liquidity.  That is, the securities are backed by assets of closed end mutual funds, who hold $2 or more of assets for each $1 of preferred shares.  The securities pay a floating rate, intended to be set by auction.  However, since the auctions have all failed, they are set at a penalty rate that is based on an index.  

Out of Scope

  1. 1. In general, any ARS not associated with CEF’s.

  2. 2.Anything regarding the suitability of ARS’s for a particular investor.

  3. 3.Anything associated with your legal rights. 

  4. 4.It’s not like these aren’t important.  The links page has sites that discuss these in great detail.  It’s a big web, so find a site that deals with these issues. 

  5. 5.Panic.  This is a panic free zone. 
     

Beta Test Notice:

I have been doing this for 20 days.  So far, it has been interesting, I have learned a lot, and she site has gotten over 1000 hits.  I’m declaring victory on the first 20 days.  I’m good for another week.  Please email me with comments or suggestions.