After our short thread conversation, I went to do some more research. The first two articles below give excellent information on the VRDO market; how it works and what has happened this year. The PDF from the Fed covers the failure of the ARS market, which while not the same as VRDO, is still an easy read on what went wrong. I also added a link to Bond Tangent, which is a blog on the muni market. That's where I got the Fed paper link. If anyone has additional info or corrections please post it. This is all secondhand, essentially, as I have no direct dealings in bond market.

http://www.financial-planning.com/asset/...

http://www.minneapolisfed.org/publicatio...

http://www.chicagofed.org/publications/f...

http://bondtangent.blogspot.com/