Muni Bond Massacre Begins

A couple of fun charts below showing the massacre currently taking place in the municipal (state debt) bond funds across the financial landscape.  These time bombs are currently exploding (unnoticed) in 401k, pension, and insurance funds as we speak. 

As I've discussed all year, the public has pulled what is left of their life savings out of the stock market and put it into bond funds around the world in search of higher rates and perceived safety.  They have done this at the very peak of the greatest bond bubble the world has seen.

This will be the major story in 2011, and the current proposal in place to not extend the Build America Bond program will be the death knell for state governments on the verge of bankruptcy.  (BAB program was put in place to subsidise state debt with federal tax payer money.  I will discuss its importance in the future when the final decision is made on their existence under the current tax proposal)

In the meantime, enjoy the fireworks as the United States of Greece begins to self implode:

NPI Nuveen Premium Income Municipal Fund

NPP Nuveen Perform Plus Municipal Fund

NPP Nuveen Municipal Advantage Fund

NPP Nuveen Municipal Market Opportunity Fund

h/t MISH