Auction-rate securities get no bidders

  • Article by: MIKE MEYERS and CHRIS SERRES , Star Tribune staff writers
  • Updated: May 25, 2008 - 4:32 PM

The esoteric debt vehicles promised low short-term interest rates on long-term debt but wound up costing millions to Minnesota companies.

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markkallMay. 25, 0811:14 PM

Bulls make $ Bears make $ Pigs go to slaugnter The Wall Street gang barbequed the pigs. Happy Memorial Day

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digalvinMay. 26, 08 8:33 AM

Consumers & tax payers will be paying for this one too...and you can't blame this one on the govt. Blame this one on gullible "decision makers" chasing cheap financing and greedy wall Street financers chasing profits on top of profits...all chasing an extra 1%. It won't get better, but the put-it-off-on-the-next-guy mentality guarantees it will get worse.

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ThornfootMay. 26, 0811:46 AM

These are businesses. They cant pretend they did not read the fine print or understand the risks. They gambled and they lost. There is no way the taxpayers should bail them out. There is no way what little money I have left in my pocket from the gas pump should be redirected into their pockets.

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HazelmnMay. 26, 08 2:28 PM

There is no need to bailout businesses. Yes, they pay for a significant chunk of our government operations through their taxes, but this comes down to risk and return. Consumers probably benefitted from the years when these auction rate securities where saving the company money, and yes, now they might have to pay a little more for some goods because of the reversal of fortune. But lets not make businesses out to be the bad guy. Take one look around -- business has created and produced nearly everything you use. I agree bailouts would be unecessary, but I don't mind the presence of business in my life.

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ckuhlmanMay. 27, 08 3:05 AM

Send the CFOs to jail.

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workandplay2May. 27, 08 8:00 AM

Looking for the too good to be true money. Where is the common sense in business, lets earn money the old fashioned way. Hard work, honesty, long term view, value employees, understand what you do, and know the risk.

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RichardsorMay. 27, 08 8:01 AM

The shareholders & the companies are the losers ,the amount of $ ADC lost instead of keeping excess cash in the bank is staggering. Some VP should lose his job.

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ELYMANMay. 27, 08 8:21 AM

The end of Glass-Steegal under Clinton and the Republicans, and the lack of regulation over the financial industry in many years, resulted in these messes. This is a political problem. But the market in $45.5 TRILLION in credit default swaps dwarfs even ARS or CDOs/CMOs in sub prime debt. And it, too, is completly deregulated, and if it crashes, the world economy goes down.

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HazelmnMay. 27, 08 8:43 PM

Let's rewind 3 years. If you were a CFO in 2005, and you were NOT taking advantage of these financing vehicles, you were not doing your job. Your board would have been saying you were asleep at the wheel, and shareholders would have been calling for your head. The fact is if you were borrowing money at 6%, but could have been borrowing at 4%, you weren't doing your job.

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