What the hell are Auction Rate Securities? I suspect a lot of people might be wondering that today when they read through the Bristol-Myers (BMY) quarterly report or coverage like this from Bloomberg. It reminds me of the reactions to the first mentions of CDOs and SIVs.

When I wrote Cash and Cash Equivalents (click here to read it) two months ago, I thought it would really catch a lot of attention and maybe even the “real financial journalists” might pick up on it. It went nowhere. I wonder if this BMY story is going to go nowhere and whether it will just be ignored.

I strongly encourage you to consider the impacts. You may wonder why a drug company like Bristol has taken such a huge loss of $275 million this quarter on something it considered to be “Cash and Cash Equivalents”. You may wonder whether this is just an isolated event. Bristol says they may raise the total writedowns in future periods to $417 million. They say it may just be a temporary impairment. Maybe. Maybe. Maybe.

Maybe BMY is the only non-financial company stuck with bad investments in its “Cash and Cash Equivalents” account. Maybe. Maybe. MAYBE NOT!