University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting

by Daniel Pecaut

Once in a while, Buffett brings props, and this year’s was a set of municipal bond bid sheets. He noted that there were some $330 billion of auction rate securities (ARS) weekly. Voilà—long-term funding with short-term rates. Good as long as it works. But when credit markets seized up in February, so did the ARS market. Chaos ensued.