Buy side

Household ownership of municipal bonds catapulted over the $1 trillion mark for the first time ever in the first quarter of 2010. Meanwhile, foreign investors seeking a greater footprint in the municipal market via taxable Build America Bonds held $71.9 billion in their largest-ever presence in the market, according to new Federal Reserve data released yesterday.

All of The Bond Buyer’s weekly yield indexes rose this week, as bond prices declined consistently throughout the period.

Tax-exempt funds recouped nearly half of the losses they suffered last week as $1.87 billion of inflows boosted total net assets to $354.79 billion for the week ending June 7, according to the Money Fund Report, a service of iMoneyNet.com.

Billion-dollar deals will make a comeback this week when both Los Angeles County and Cook County, Ill., test the municipal waters, hoping for strong investor demand in the midst of the spring rollover season.

The flow of cash to municipal bond mutual funds continues to strengthen.

Investors who counted on diversification to shield them from market swings learned during the financial crisis they were not as diversified as they thought.

The Bond Buyer’s weekly yield indexes were narrowly mixed this week, as municipals ambled around unchanged amid somewhat light secondary trading.

Tax-exempt money market funds shed $3.91 billion in the week ending May 31, finishing with total net assets of $352.92 billion, according to the Money Fund Report, a service of iMoneyNet.com. That was a significantly steeper decline than the previous week, in which the funds saw $156.7 million of outflows and ended with $356.83 billion.

WASHINGTON — Berkshire Hathaway Inc.’s Warren Buffett warned a panel investigating the causes of the financial crisis Wednesday that states and localities may face “terrible” financial distress in the next five to 10 years that in turn could lead some to look to the federal government for bailouts.

Municipal closed-end funds are fiddling while everyone else burns.

Arbitration panels for the Financial Industry Regulatory Authority have ordered Citigroup to pay roughly $2.2 million to investors who lost money in one of the bank’s municipal bond arbitrage vehicles.

On the heels of last week’s robust calendar, volume will be noticeably lighter this week as only a handful of sizable deals deliver an estimated $4 billion to the municipal market amid abbreviated trading due to the observance of yesterday’s Memorial Day holiday, according to Ipreo LLC and The Bond Buyer.

Municipal bond mutual funds commanded a moderate sum of new money last week as investors remained averse to risk.

Tax-exempt money market funds saw outflows of $356.83 billion while the average, seven-day simple yield remained unchanged at 0.04% for the week ending May 24, according to the Money Fund Report, a service of iMoneyNet.com.

New Jersey Gov. Chris Christie earlier this week remarked that if the state didn’t clean up its act it could become the next Greece.

The Bond Buyer’s weekly yield indexes were narrowly mixed this week, lagging Treasury market losses.

Many investors will set their sights on Washington this week, where the pricing of $1.1 billion of taxable general obligation Build America Bonds is expected to be a record-setting event for both the state and the market — even though overall volume is expected to dip noticeably from last week.

The municipal universe continues to shrug off the panic enveloping financial markets across the world.

The Bond Buyer’s weekly yield indexes declined this week as the municipal market grew firmer, though it lagged a more substantial rally in the Treasury market.

Municipalities with floating-rate debt, especially those with lower bond ratings, are likely to face high costs to renew their liquidity facilities this year and next — if they can obtain them at all.