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Skeptible,

How did you like KMV's 3-day "training session"? Is it worthwhile? I, along with some co-workers may go, but not if it is along the lines of their product presentation - i.e. high-level with no detail.

do they discuss implementation issues?
methodological issues?

or is it a big ad for their product? Thanks.

How did you like KMV's 3-day "training session"? Is it worthwhile? I, along with some co-workers may go, but not if it is along the lines of their product presentation - i.e. high-level with no detail. do they discuss implementation issues? methodological issues? or is it a big ad for their product? Thanks. It was time well spent. The first half of the first day was the "hype" section where they show you how great KMV worked relative to S&P, Moody's for easy examples like Enron. They also describe the main differences between their approach and the rating agencies...like how they use EDF's to describe default likelihood while the others use letters. The lunches they provided were top notch too. I would say that from the second half of the first day through to the third day, it was very informative, and based on 3-days of training (including some examples that they walked you through on laptops) I was up and running at the office using Credit Monitor and Portfolio Monitor. Half the KMV guys that taught the sessions were PhDs, as were some of the attendees. Needless to say, some heady discussions and debates on credit modelling often broke out.Ultimately, we plan on using KMV to derive and allocate economic capital for each of our biz units.

For those who might be searching for a humorous reason for Moody's buying KMV, please direct your browser to:http://www.kmv.com/Knowledge_Base/publi ... psis.pdfIn this paper (with a corresponding technical paper) KMV basically makes comparative mincemeat of Moody's Creditwhatsis technique. Look at it now before the new owners place it down a "memory hole."They say "revenge" is a dish best served cold. Apparently cold cash is the coldest revenge of all.

...makes comparative mincemeat of Moody's Creditwhatsis techniqueYes, KMV did this comparison in the opening salvo of the first day of the training sessions.So, I guess we'll have to versions of KMV, like we have two versions of Fender guitars (pre CBS, post CBS): pre Moodys, post Moodys. Better hold on to those PDF docs. They'll be collector's items some day.

That article is hilarious. You can see the credit risk warriors with their one weapon - dueling papers. You suck. No, you suck. No, you suck.......

The only way to evaluate the hypothesis that an 'optimized' merton model is a sufficient predictor of default is data, which isn't easy for most people to get. Note, however, that of over 1400 publicly traded defaulting firms in the post-1980 US data, KMV strangely used only 141 of these in their demonstration that EDFs weren't helped by other variables. This won't be he said/she said for long; take the data yourself, crosstab with your favorite ratio, and look at future performance--nature is indifferent to who wins. In any case, I'm sure Moody's/KMV will simply hope that both he Moody's public model and KMV private model quietly fade away.

we have two versions of Fender guitars (pre CBS, post CBS)Speaking as the former (a deeply regretfully "former" ) owner of a Fender Telecaster circa 1964, there ain't no such thing as a post CBS Fender!