Auction Rate Securities: Bailout, Problems in Tinsel Town

Implications: Are ARS buy backs another quick fix to possibly avoid Big Brother's further microscope?ARS buybacks by the largest banks will likely have most if not all of the other branches of this financial industry following suit!

Analysis: While it may seem unusual to some to have banks like UBS & Citigroup give up so easily with these buy backs many forecasters would say it is the best strategy in the long run.  The fines were in the grand scheme of things a slap on the wrist, not to say 1.5 billion is not alot of money, but with the market being what it is if these advertised as highly liquid investments can not withstand the heat then Katy bar the door. Strategically, putting aside they are being forced to kick in the money, it is the most economical long run decision.  One almost wonders if this buyback is a way off keeping many of their other financial practices from further scrutiny? Regardless, these buybacks have already started the ripple affect as BOA, Bank of NY & Merrill seem to be the next focus of the tree shakers.  The bottom line is for some ARS may have been a Fulton's Folly & for others just another innovative way to handle assets on the books. http://www.edinformatics.com/investor_education/auction_rate_security.htm    One thing is for certain, market advertising will undoubtedly change for these & other similar securities. Importantly, not just the fine print!