Safe High Yield Transaction

So where do we put our "safe money"? I use to think Muni's were a good idea because of the unique tax features but with all the turmoil in economy I now question their stability. The ability to service mounting debt with increased municipal service demand at the local level is making me nervous. Bank CD's seem questionable because of the limits on the safety net and relatively low returns. In searching for alternatives, I have recently been looking at traditional stogy instruments that have tax features, stable issuers, and comparatively high yields. Some of these seem to combine all the components to make them a good choice for stability, safety and strong comparative performance. I am continuing my pursuit of finding a good place for my safe money but I think I have found one or two that yield 6.4% before tax for a five year commitment with a number of other interesting features.

AAA Financial Rating

Isn't it ironic that just when you need a Triple A rating that it goes away? GE and Berkshire Hathaway, Warren Buffet's business home were rated Triple A until last week. Just like the super tranche Mortgage Backed Securities [MBS] that AIG backed with Collateral Default Swaps [CDS's]. I know that things change but if the rating is only good when things are good what the heck is the meaning of Triple A? The answer it seems is very little. Investors and institutions rely too much on the financial ratings for decision making and not enough to the fundamentals. The rating agencies have enjoyed way too much power and protection in the past. They are paid by the firms that they are rating and can turn on a dime if things go pear shaped, so what is the point?