At the moment KMV gives little reason to hope for a rebound in Asia.
Under KMV's model, the typical default probability is 15% in Indonesia and 18% in Thailand.
KMV, now has a 4.4% chance of default, more than four times the average in the 1990s.
Closer to home, KMV ran a what-if scenario recently, plugging in a one-day 25% plunge in the Dow.
In Hong Kong corporations, however, KMV has seen a rapid deterioration and says the debt is mostly junk.
KMV's clients receive software that translates publicly available financial data into probabilities that a particular borrower will default.
If KMV's model works and the market correction has nearly run its course, junk bonds are now a buy.
For the U.S., KMV ran a what-if scenario recently, plugging in a one- day 25% plunge in the Dow.
For instance, in 2002 Moody's acquired KMV, the global leader in provision of objective and quantitative credit risk assessment tools.
What distinguishes KMV's default-warning system is that it doesn't rely on the wisdom of one person or a handful of people.
If KMV's model works and if you think the market correction has nearly run its course, junk bonds are a buy now.
KMV's clients get access to a software package that translates publicly available financial data into probabilities that a particular borrower will default on its obligations.
Moody 's ( MCO - news - people ) acquired KMV, the global leader in provision of objective and quantitative credit risk assessment tools.
"You can sometimes look at a slumping equity price and see trouble coming, but until KMV's model came along it was impossible to quantify the risk, " says Campbell.
He says KMV gave enough warning so that he could unload several loans at around par before most others caught on that firms like Bradlees and Mobilemedia were headed for bankruptcy.
You may think of Singapore as a relatively safe haven, but KMV says the default risk on the debt of publicly traded companies there has shot up -- from a negligible 0.1% almost two years ago to 4.2% now.
As for Japan, KMV's model says that if the government lets market forces take their course, 3 of Japan's 19 largest banks -- it won't name names -- have at least a 2% chance of defaulting on their debt over the next year.
As for Japan, KMV's model says that 3 of Japan's 19 largest banks -- it won't name names -- have at least a 2% chance of defaulting on their debt over the next year if the government lets market forces take their course.
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