A way to end the auction rates securities mess?

It's so easy to forget about the auction rate securities mess. But the fact remains that more than $300 billion remains tied up in this near-frozen market. Issuers, lots of municipalities and nonprofits cannot forget about any of this. A New York Times column notes that Wall Street firms have a lot of conflict in this market. They rake in management fees, even when rate-setting auctions fail (as they have done lately). They collect fees when issuers redeem the securities and unwind the related derivatives. One answer would be to sell some of this paper at a discount via a nascent secondary market. But Wall Street firms, the Times says, are still asking issuers to redeem at par. Anything less could stick the issuer and the underwriter in arbitration.

For more:
- here's the New York Times article

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