SteveT
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Post by SteveT on Feb 1, 2018 16:14:21 GMT
Now there's no longer a guaranteed exit route when a MT loan reaches its term, and long slow-moving queues have formed on many of the larger MT loans, it seems worthwhile to revisit the question of how MT lenders feel about introducing discounting to help SM liquidity. Same question and answer choices as before, to permit a direct comparison with last time
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Post by Butch Cassidy on Feb 1, 2018 16:43:20 GMT
Voted Yes just as last time because of the overwhelming logic that means discounting makes sense to allow market clearing - It wouldn't be compulsory so those who don't like/understand/want it don't need to use it.
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jlend
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Post by jlend on Feb 1, 2018 16:50:12 GMT
Is this a precursor to a second Brexit referendum? đ
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jlend
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Post by jlend on Feb 1, 2018 16:54:54 GMT
Now there's no longer a guaranteed exit route when a MT loan reaches its term, and long slow-moving queues have formed on many of the larger MT loans, it seems worthwhile to revisit the question of how MT lenders feel about introducing discounting to help SM liquidity. Same question and answer choices as before, to permit a direct comparison with last timeI don't think there was a guaranteed exit route for all loans before to be fair. Only for the Broadoak loans, and MT stopped offering new Broadoak loans quite some time ago.
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dovap
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Post by dovap on Feb 1, 2018 16:56:00 GMT
perhaps better quality loans would spare us the tediously repetitive drivel about variable pricing
just a thought
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jlend
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Post by jlend on Feb 1, 2018 17:01:31 GMT
perhaps better quality loans would spare us the tediously repetitive drivel about variable pricing just a thought +1 More focus on sorting out the route cause if MT have time to spare.
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SteveT
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Post by SteveT on Feb 1, 2018 18:19:00 GMT
... It wouldn't be compulsory so those who don't like/understand/want it don't need to use it. Make no mistake, the introduction of variable pricing would affect everyone, whether they don't like/understand/want it or not. I agree, but Iâd really question whether the effect would be negative. Here on MT it feels like the wheels are slowly grinding to a halt. As queues lengthen, the rate of buying falls and new queues start to form. This affects sentiment on new loans, which then struggle to fill. Compare this with the situation on Assetz Capital, where discounting is allowed (but NOT selling at a premium). Whilst there are some queues, they move steadily because: A) there is no advantage to be gained by joining the queue before another lender (ie. sales are spread randomly amongst all those selling) and B) lenders know they have the option, if they really want/need to exit quickly, of adding a discount. The net effect is that there is actually very little discounting on AC, and the few parts that do get offered at a discount tend quickly to get snapped up. Obviously ACâs track record in securing decent outcomes on overdue and defaulted loans also plays a part.
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ali
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Post by ali on Feb 1, 2018 18:21:59 GMT
Make no mistake, the introduction of variable pricing would affect everyone, whether they don't like/understand/want it or not. I agree, but Iâd really question whether the effect would be negative. Yes, we get this. But continually asking the same question because you don't like the answer just insults the intelligence of those who disagree. I'm not expecting you to accept my position, but I do expect you to respect it.
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jlend
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Post by jlend on Feb 1, 2018 18:29:03 GMT
Make no mistake, the introduction of variable pricing would affect everyone, whether they don't like/understand/want it or not. I agree, but Iâd really question whether the effect would be negative. Here on MT it feels like the wheels are slowly grinding to a halt. As queues lengthen, the rate of buying falls and new queues start to form. This affects sentiment on new loans, which then struggle to fill. Compare this with the situation on Assetz Capital, where discounting is allowed (but NOT selling at a premium). Whilst there are some queues, they move steadily because: A) there is no advantage to be gained by joining the queue before another lender (ie. sales are spread randomly amongst all those selling) and B) lenders know they have the option, if they really want/need to exit quickly, of adding a discount. The net effect is that there is actually very little discounting needed to sell on AC, and the few parts that do get offered at a discount tend quickly to get snapped up. Obviously ACâs track record in securing decent outcomes on overdue and defaulted loans also plays a part. It depends on AC... I'm only in the non MLIA accounts there and stuck in a few loans when trying to sell out because of discounting as it's not allowed outside the mlia. Just saying the AC model doesn't work quite so well for everyone.
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SteveT
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Post by SteveT on Feb 1, 2018 18:30:30 GMT
I agree, but Iâd really question whether the effect would be negative. Yes, we get this. But continually asking the same question because you don't like the answer just insults the intelligence of those who disagree. I'm not expecting you to accept my position, but I do expect you to respect it. Who was it who said âWhen the facts change, I change my mindâ? I fully respect your opinion, but todayâs announcement that we will no longer be able to opt out and exit a loan when it renews (âextendsâ in the new parlance) surely warrants another look at the issue. Perhaps someone can make the case again for why the current situation (of ever lengthening and slowing queues as more and more people feel compelled to join them) is the better bet?
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Nomad
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Post by Nomad on Feb 1, 2018 18:35:11 GMT
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SteveT
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Post by SteveT on Feb 1, 2018 18:45:38 GMT
It depends on AC... I'm only in the non MLIA accounts there and stuck in a few loans when trying to sell out because of discounting as it's not allowed outside the mlia. Just saying the AC model doesn't work quite so well for everyone. You're right that AC doesn't let GBBA / GEIA account holders add discounts, only MLIA lenders, but any delays in selling GBBA / GEIA holdings are not "because of discounting". I've just looked at the 100 loans with greatest availability on AC and could not find even one of them with parts listed at a discount.
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agent69
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Post by agent69 on Feb 1, 2018 18:46:41 GMT
Never been a fan of selling at a premium, but always favoured selling at a loss if you are desperate to cash in your holdings.
I'm not particularly happy with the new MT system. Fair enough to introduce it on new loans, but for existing loans it does look like significant movement of the goal posts.
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agent69
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Post by agent69 on Feb 1, 2018 18:49:50 GMT
I've just looked at the 100 loans with greatest availability on AC and could not find even one of them with parts listed at a discount. Is that because most of the money is held by AC, in one form or another? (is it possible to identify which availability on the SM is AC and what is normal lenders?)
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bugs4me
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Post by bugs4me on Feb 1, 2018 18:56:59 GMT
I must be terribly dense but I cannot see the downside to allowing existing lenders the facility to discount and possibly invest in existing and/or upcoming loans.
Me, putting 2 and 2 together, it's clear MT have hit a crossroads getting their new offerings funded. Also, unless they cease allowing folks the option to not renew then there's every possibility that any renewal may fall flat on it's face. This I believe is the driving factor behind this new policy.
The new rule, with a stagnant SM, means that effectively existing lenders may be locked in for an eternity so not a good marketing move on their part but understandable even though I disagree. In my book, a 6 month loan is a 6 month loan. To simply extend it, without a lender vote fails the fair and reasonable test IMO.
What MT need to remember is there does not exist an endless supply of lender funds, or at least folks that are willing to commit to everything especially whilst there is ÂŁ6m plus of defaults already locked in.
Personally I will be examining in far greater detail future loan opportunities. I do not expect the initial rules to be changed halfway through although that's how it's being presented as I read it. A 6 month loan but we (MT) at our sole discretion can extend it without lenders permission.
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