ABSTRACT
We cannot foresee the future so we settle for its predictions. Our ancient desire to see what is to come in a magic glass in an age of reason is now manifested in our beliefs in the outcome of sophisticated models. The purpose of models is to replace this simplification that we use to make any decisions, and to represent reality as a multitude of factors, their interactions in a dynamic setting with the ultimate objective to infer the probability of default. The model could never predict with certainty, unlike the seers of the past. Our model from the rational world could only give us a certain probability to the binary outcome that a default may occur.
