Last week provided a nice set of gains, with the Dow up 2.81%, the S&P up 2.50%, and the Nasdaq trailing, but still up at 1.10%.

We’ve gotten some interesting new insight into the popular BABs (Build America Bonds). BABs are part of the American Recovery and Reinvestment Act, which was signed into law on February 17, 2009. In short, BABs look attractive because the Federal government picks up the tab for the tax on such bonds- so municipalities are able to offer bonds that compete with corporate issues. This sounds like a great arrangement for investors. And it can be- if everything works as planned. However, if the municipality goes into default, the federal government holds back the portion of the interest on the bonds for which it is responsible. BABs, then, are not as great as some would believe.