A very bitter battle is shaping up in the municipal market, and this time we're not talking about spreads, or designations, or allocations, or syndicate practices. This time the battle is about ratings, and the flash point is race.

A few weeks ago, Detroit was downgraded by Moody's Investors Service. The reaction by city officials was the usual one: They were angry, and hurt. But they went a little further than the usual official response. They said Moody's used different criteria to rate Detroit than it did other cities, that the agency was not looking at the city's current condition, but at how it might fare down the road.

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