12:06 | [Comment From Little Debbie ]
How are your models hedging against overshooting a trajectory? What have you learned from past modeling errors (both at Moody's and elsewhere) that relied on simplistic trajectories, and why should newer models avoid past mistakes? How are you integrating a bottom-up approach with larger national/city stats? We all know the basic statistics that are driving several models downward, … but what are your three main hedges against overshooting a trajectory because of new trends that you don't anticipate or have trouble accounting for (e.g. possibility of write-downs, increased LEAP straddling on BBB CDO tranches, changes in presumed rational behavior, etc). |
