One Question for John Carney

I don't want to drag this debate over municipal bonds on too long: I've pretty much said my piece. But I would like to ask John Carney just one question. Today, he says this:

Investors in municipal bonds are interested in risk comparisons between different members of the muni asset class and not so much in comparisons to corporate bonds.

This squares with what he said on Monday:

If two-thirds of munis were rated triple-A, investors would lack guidance about real differences between the issuers.

But it seems to me that munis are pretty much the last asset class where investors would be clamoring for finely-grained credit distinctions. Mainly because most municipal bonds are sold into retail. So here's my question for John:

Who are these municipal bond investors who fully understand that most municipal bonds would be rated triple-A if they were rated on a corporate scale, but who find a lot of value in the ratings agencies providing finer-grained credit distinctions than that? Really, please, name them. Two would be nice, but just one would be a good start.

Carney makes it seem as though the under-rating of municipal bonds is in response to market demand. If the demand is so great as to change ratings-agency actions from the obvious base-case of rating all bonds on the same scale, then surely it shouldn't be too hard to identify the demanders.

Update: Carney responds, but names no names.

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