WHEEEEE!!!!

(As Atrios would say)

Auction Supply `Tsunami' Foreshadows Deeper Municipal Losses
By Michael McDonald

March 3 (Bloomberg) -- U.S. states and local governments may extend the worst slump in municipal bonds on record as they replace as much as $166 billion of auction-rate securities.

California, Boston's biggest hospital and Duke Energy Corp. are converting their bonds to other types of tax-exempt debt after auction failures drove rates as high as 20 percent.

The higher borrowing costs are squeezing states and towns just as slowing growth threatens to cut revenue.