One thing I've always marveled at is just how quickly a bond market panic can materialize. Case in point, the municipal bond market rout over the past several trading days.
MUB, has sold off in spectacular fashion, but this rout has not been entirely confined to munis. Treasuries have sold off too, as shown in this comparison with TLT.
The PIMCO California Municipal Income Fund (PCQ) might be making a bit of a fool of me, though. It has shown a sharper rout than munis in general and because California is such a large segment of the muni market this may make sense. However, with California now having the ability to pass budgets more easily, I'm not sure that questions about California's solvency are quite as pertinent as they used to be. Regardless, California munis have been obliterated.
Very oddly, this has been accompanied by a sell-off, not a rally, in gold. If there's one asset I would expect would do well in a rout of safe assets, it would be gold.
This bears watching and there's easy money to be made in munis if the sell-off gets out of control. Don't be so foolish as to pick up individual issues since if you happen to buy a special district's issues without understanding what revenue stream backs its payments, you can end up in a world of hurt. Those can and do default.