Households surpassed their previous record and hit a 20-year high as they hoarded $1.095 trillion of the nearly $3 trillion of outstanding municipal bond debt issued by states and local governments as of 2010, according to data recently released by the Federal Reserve.

Ownership by households grew by 4.9% in the fourth quarter of 2010 and by 8.5% for the year, despite the blood-letting that was unfolding simultaneously in the municipal bond mutual fund industry.

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