Most of what you’ve posted is related to city or state debt / notes. It’s true that the Municipal bond market has had numerous failures this past year, with more coming.
But Agency and Treasury debt are Federal, and generally operate on different principles.
I think that the ‘flight to safety’ to Treasuries is temporary, as well.

But what the bond market is saying (in the story above – more or less), is that even FCBs (Foreign Central Banks) are afraid of any US debt that has anything to do with housing.

What happens if Federal Treasuries are unsafe?

That is a subject for another story.

Muni Bond Sales Drying Up as States Face $42 Billion Shortfall “The combination of the worst financial crisis since World War II and the collapse of the $330 billion auction-rate debt market will leave 41 states and the District of Columbia with shortfalls just as financing sources diminish.”

Atlantic City Bleeds as Would-Be Gamblers Pay Bills “Through November, the state collected $338 million in Atlantic City tax revenue, down from $364 million and $384 million, respectively, in the first 11 months of 2007 and 2006.”

NY Not Mailing Personal Income Tax Forms “In these tough economic times, the State must take must make all efforts to reduce spending…”

China Jan-Nov tax revenue… “Growth rates of value-added tax and enterprise income tax eased, while growth of other tax revenue declined sharply or turned negative.”

Mass. may face another $1 billion in budget cuts “Governor Deval Patrick said this afternoon that he was preparing for up to $1 billion in additional mid-year budget cuts, raising the specter of possible reductions in local aid to municipalities and additional layoffs of state employees.”

Revenue Slump Prompts Calls for Tax, Financial System Overhaul “Negative tax revenue growth has occurred since October.”

Nearly 14,000 businesses ’seeking tax delays’ “The Times reports that 10,000 businesses, partnerships and sole traders have been given more time to pay tax worth nearly £170 million, while just under 4,000 organisations, which owe a total of £271 million, have had their cases referred for further consideration.”

Our spirits are low, but alcohol still selling “The latest figures for the five months ending Nov. 30 show that the excise tax fell $756,000 short of the $30.7 million that the state expected to earn from it.”

Beware the ‘charitisation’ of government “The downturn may cause an accelerated shift towards charities delivering government services, says Nick Seddon…”

Philadelphia’s Mummers Save 109-Year Strut From City Budget Ax “Private donors contributed $180,000 at the last minute to save tomorrow’s parade, after the city cut funding for the 109- year-old tradition to help plug a $1 billion budget gap.”

I don’t know

I expect to post on this sometime today, and there may be a simple explanation somewhere in the mess. It’s a very important point.

Federal Agency Securities Market (Agency Debt)

Federal agency debt is issued by various government-sponsored enterprises (GSEs) which were created by Congress to fund loans to borrowers such as homeowners, farmers and students.

Federal Treasuries Market (Treasury Debt)
The U.S. Treasury issues three types of securities: bills, which have a maturity of less than 1 year; notes, which have a maturity of 2 to 10 years; and bonds, which have a maturity of greater than 10 years.

In other words, the Central Banks of the world are as scared of the US housing collapse as us retail investors. This is the ‘flight to safety’ to T-Bills that most institutional and retail investors are doing as well.

Nobody wants Fannie or Freddie’s notes.

More here.
http://www.investinginbonds.com/marketataglance.asp?catid=31