^^^^^Didn't you answer your own question?

The 3% ones are mostly federal and/or state exempt?

I see 5.55% for $50K and 5.54% for $25K. Remember those are 28 day rates not yields. So I think you for a 28 day rate...

(1+rate/12)^12 would give a rough yearly yield.

There are 3 kinda of ARS NorcalSci just to make sure you understand.

Muni which are both federal and state tax exempt and not subject to AMT tend to yeild the lower amounts around 3-3.5%
Muni which are both federal and state tax exempt but subject to AMT tend to yeild between 3.4-3.8%
Muni, Goverment Agency and Corp ARS which are fully taxable.

unfortunately FFCB, FHLB, SLMA and TVA are only goverment agency who are state tax exempt and they do not issue any ARS or VRDN they only issue discount commercial paper offered by investment banks issued any date increaments between 1 and 181 days. Theses discount notes are sold just like T-Bills at a discount and mature at par except they normally sold in increaments of $100K + min blocks depending on the issuer/underwriter.Link to underwriters list currently Citigroup lists these issue at 5.16% discount rate. Citigroup only sells theses issues to PB customers and not retail but Wells Fargo, Fidelity, BOA ,Schwab and Zions direct is listed. One of them might sell to retail clients tho I am not sure as I have never called any of them tried to buy as a retail client. I know BOA more than likely is not worth even calling as there rate tend to suck on bonds.

Two big Goverment Agency's issuers of both ARS and VRDN are FHLMC and FNMA who are both subject to state and federal income tax. These issues normally will be marketed as XXXX housing authority and if you read underwriting doc they are low income housing loans granteed by either Freddie Mac(FHLMC) or Fannie May(FNMA). Btw both Freddie and Fannie do not issue discount commerical paper at all like other 4 Goverment Agencies.

So if you want taxable income you might as well look for the highest yeidling paper and not worry about which state issues them as all taxable ARS are subject to both federal and state income tax in all states and have no advantage of buying your home state issues over another state.

NorCalSci said:I'm wondering if it is worthwhile to consider the 7 day resets. Does anybody know if there is much volatility in the rates from week to week? I can see historic prices, but they are all bought and sold at "100" and the rates are not disclosed.

Is it reasonable to think 7 day resets would not change much week to week?

I have never bought any via Fidelity so I am not sure about the rate volatility week to week on there issues as I have not tracked it as closely but if the auction results are similiar to Citigroup outcome then rates on auctions held the first 15 days of the month tend to be lower than rates for auction 2nd half of the month. I noticed this personally as I only buy 7 day ARS from Citigroup PB when I have less than $100K. The difference in rates tends to be about 10-30 basis point spread. What I dont like about ARS is you can have a wacky outcome once in a while works both in your favor or against you. I have had securities reset at rates under 5% 1 week and then following week reset at a rate of 5.75%. This is caused by the fact some retail clients are stupid and will bid agressively(or there brokers will). I also noticed in weeks were the stock market does very well auction outcomes will have better rates vs when the market does very poorly rates tend to go down more.

Also rates on 28 and 35 day issues tend to be a lot more stable and move less week to week as people who buy thoses issues tend to be looking for place to part to cash long term vs 7 day ARS rates seem to be subject to rate chasing more.

And to clarify, if I buy a 7 day reset and do not give a sell order, I would continue to be invested in it at the following auction (though the rates would change based on the auction outcome.) Do I have this right?

If you read the FAQ on Fidelity web page they claim when your position will renew automatically for another reset period unless you call in between 7-11am EST on the day of auction and sell your position.

xerty said:Yahoo News story on how Citi illegally bid in its own auctions for ARS's. Had they not bid, the auctions might have "failed" (not enough buyers for the debt), the issuer would have had to raise their rates, and customers would have benefited. A mere 200K was enough to buy off the SEC for market manipulation, this time anyway.

Did you even bother to read the story?

The alleged violations took place at Legg Mason Wood Walker Inc. from January 2003 through June 2004, the SEC said. Citigroup took over Legg Mason's brokerage in a swap for its own asset management business in December 2005.

The fraud took place between Jan 2003 and June of 2004. Citigroup bought Legg Mason in Dec 2005. So how was Citigroup involded in the fraud? Citigroup is paying the fines only because they currently own Legg Mason but they were not involded at all nor did they own Legg Mason's at the time the fraud happened.

I have never bought from Fidelity ARS sorry. I dont even have a Fidelity Account. Just look there because that is the an easy place for people to buy them and a lot of people on this board have Fidelity accounts already too. I buy via Citigroup PB and they allow you buy and sell all day long on the day the issue resets.

bump

Anyone notice yesterday Fidelity had an ARS reset at 5.60% and another 5.55% today. Citi had 1 ARS reset today 5.58%.

lhendricks92 Today a couple of ARS reset at 5.55% and 1 at 5.70% from Fidelity and highest ARS from Citi was 5.81% today for a 35 day reset min $100k too.

BTW, it looks like only the "muni resets" at Fidelity without a state require a phone order. (Maybe because they're not actually "municpal?")

Anyway, here's the number to reach Fidelity's Fixed Income reps: 1.800.544.5372. They suggested to call early in the morning (i.e., shortly after 8 AM EST) to make sure you get your order in for the day.

ScootyPuffSr said:^^^I'm a big alternate methods fan and I think Dolmar is incredibly valuable for bringing this to our attention.

That being said, just to play devil's advocate...why are you buying 5.7% 28 day *today*. FNBO will last for at least another 45 days. That 5.7% is fully state and federal taxable, right?

Was signing up for an FNBOD account too much of a hassle and you already had Fido?

Again, I think these are an interesting product and I have over $50K at Fido. Just curious why you are making the jump now on a 28 day reset.

I'm well aware of the FNBO account, thanks.

Simple rate on the FNBO account is 5.84%. Opening another account that I'm going to close in 6 weeks for 14 basis points isn't worth it.