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Post by propman on Nov 27, 2018 10:07:56 GMT
It might be slow systems despite their much trumpeted system upgrades, but there definitely seems to be a delay in getting Monday's money onto the market every week now. Ratesetter then seem to delay fulfilling the loans that come through on what used to be the largest lending day of the week. As Sunday is a slow lending day, there is usually some low rate money sitting around reducing the lowest rate shown as the defayult "lend it now". Impatient money then piles on reducing this further. The result is that rather than the often relatively high market rate (due to no auto-reinvestment on the Sunday) setting the benchmark, rates dive on a Monday morning. THere seems to be quite a lot of money put on manually on a Monday so this sets a lower rate. Finally the extra money (3 days of repayments) comes through in the afternoon and is not fully lent. The impact is a significant drop in the market rate and the unlent money being transferred down to this lower rates to add to the Tuesday repayments. As this may be more than is lent, many lenders choose to undercut the market rate to ensure the money is lent further reducing the lend it now and maintaining a lower average into Wednesday's Market Rate.
So another tactic to add to:
market rate calculation generally lower than can be achieved (I still believe that this rounds down as well as ignoring the post 10 PM that is sometimes used to artificially lower the amount and suspect that they may monitor the average to stop it just making the next rate and including the low previous market rate as well as the lend it now - below)
Quoting "Lend it now" as an artificially low rate by offering loans at below the prevailing rates and showing this as the rate for inexperienced borrowers and "hiding" self selection under the offputting "expert" logo.
Offerinmg loans at below the "lend it now rate" and delaying their fulfillment to encourage money in at lower than achievable rates.
Any others I have missed?
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rscal
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Post by rscal on Nov 27, 2018 15:45:27 GMT
I haven't been watching RS rates closely of late as it's all been coming out since their rates peaked in during October. But, yes, the system when I watched it did place auto-reinvested Monday money relatively early (by mid morning) and knowing this one could place a 'sure bet' order 0.1% below that. This was particularly good on a Monday b/c their calculation for Sunday took into account the constant upticking of matching as the market was gradually emptying and resulting in artificially high 'Markey Rate' (rolling 24 hour) numbers. This was bound to attract their attention so some market manipulation to bring rates down was inevitable at some some point.
Why is delay in auto-investment 'unacceptable'? Because when MR went high it took longer for the market rise to start eating into it. Ratesetter thus prolong cash drag - now deliberately to induce a lower rate (reflective of the lower rolling average) the next day.
I suppose they could spruce up the rate calculation w/o too much technical difficulty to (say) be hourly - or even be reset after number of transaction (like after every 1000) and go to basis (0.01%) separation of interest rates. That is possible just not wanted as it will surrender control to (what's that thing called, now?) Er.. the 'market'.
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benaj
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Post by benaj on Nov 27, 2018 16:54:02 GMT
I suppose the UI design has a big impact to RS profitability.
Invest button is BIG, "The rate to lend right now" font is even Bigger. Choose your amount button is BIG. Review and continue button is also BIG.
I have no idea how many times does RS match loans a day. If someone knows loans get matched more than once in an hour, they may do something differently instead of lend right now I suppose. Sometimes, the market does not move at all and no loans matched in the 4 hour period or longer.
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Post by propman on Nov 28, 2018 10:04:10 GMT
... This was particularly good on a Monday b/c their calculation for Sunday took into account the constant upticking of matching as the market was gradually emptying and resulting in artificially high 'Markey Rate' (rolling 24 hour) numbers. This was bound to attract their attention so some market manipulation to bring rates down was inevitable at some some point.
Why is delay in auto-investment 'unacceptable'? Because when MR went high it took longer for the market rise to start eating into it. Ratesetter thus prolong cash drag - now deliberately to induce a lower rate (reflective of the lower rolling average) the next day...
A few months ago the Monday repayments were generally relent by early afternoon, this allowed higher matching later in the day while the immediate lenders were not, on average, lowering their rate that far below the Sunday MR. With higher lending in the latter part of the day, the MR didn't usually go down that far. delaying matching and reinvestment has the effect I described of increasing the dropping of rates by immediate lenders while making it unlikely that the MR lenders will all be matched. The effect is reduced MR into Tuesday and an increase in money at this new MR that will further depress rates. I'm not sure whether you are arguing from the assumption that the depression of rates is inevitable. It has only just occurred to me the irony that "Ratesetter" is singyular. I always assumed that it was publicising that investors were in control, but that would require the plural. The atual name is more precise as they broadly set the rate!
I understand that RS's business volume and revenues are driven by lower rates and so they would want systems to keep the rate as low as possible without discouraging sufficient competition of lending funds to meet the borrower demand at the lowetr rates. As a lender I want the platforms to make sufficient funds to reduce the risks to me from their collapse, while providing me with the highest risk adjusted returns possible. We only have significant leverage in this balance when the platform requires the discretionary funds of the informed investors (ie the "dum money" is insufficient to meet demand). But further, spreading knowledge of their practices should increase the funds affected by their actions, hence teh reason for me pointing out their tactics. I leave it to others to determine whetehr they should respond by not being rushed into lowering rates due to expected rate pick up later in the week, withdrawal in favour of other investments / platforms or accepting what is happening. That is the essence of a market, increased information should increase the market efficiency.
- PM
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Post by oppsididitagain on Nov 28, 2018 11:14:00 GMT
I went to the meeting RS invited everyone too back in Sept. I remember them saying they are in control of the borrowers 'flow tap' meaning, they drip feed the borrowers orders onto the platform to keep the market stable and flowing through the day. The fact there are more lenders than borrowers will naturally have people chasing the rates down. Historically they used to upload the majority of the orders at about 6am, you could see the total amount of money in borrowers orders and as a lender work out where to get the potentially highest match on that day. The matching used to all happen at about 12.30/1300 rates spiked and by 13.30 there were no borrowers left and rates used to drop back. Its in RS interest to keep rates as low as possible to keep them as competivie as possible in the lending market. The offset is less people will lend via their platform. Personally I have noticed my loan repayments in the 5yr get processed a lot later in the day than repayments in the rolling. Rolling usually by 9am. 5Yr between 10-11.30am. Is this on purpose or maybe due to the size of the loan book considering how they have restructured the rolling market I also use the manual lend function, never at market rate, last night I was getting rolling money matched 3.9% (2K worth). which was 50% more than the 2.7% getting matched during the day !!!
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benaj
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Post by benaj on Nov 28, 2018 11:54:39 GMT
I went to the meeting RS invited everyone too back in Sept. I remember them saying they are in control of the borrowers 'flow tap' meaning, they drip feed the borrowers orders onto the platform to keep the market stable and flowing through the day. ... I also use the manual lend function, never at market rate, last night I was getting rolling money matched 3.9% (2K worth). which was 50% more than the 2.7% getting matched during the day !!! In the space of 5 minutes, the Rate to lend is 2.7% for the rolling marketing @ 11:50, last matched was 3.4%@ 11:45, 0.7% spread in just 5 minutes !!! Then the rate increased / matched to 3.5% @ 1155
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Post by oppsididitagain on Nov 28, 2018 21:15:01 GMT
they turned the tap on :-)
getting matched at 4% now
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Post by propman on Dec 3, 2018 17:51:45 GMT
Maqy be a genuine issue, but received only 2 of my scheduled 208 repayments due today on 5 year, so given 1st of the month as well as 2nd & 3rd due, expect the backlog to kill returns for the week and, with the usual slow down for the holiday, possibly until into January!
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m2btj
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Post by m2btj on Dec 3, 2018 18:57:43 GMT
Just received an email from RS inviting me to invest additional funds at market high rates. Clicked the Invest Now button to find the website is down for maintenance. You couldn't make it up!
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spiral
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Post by spiral on Dec 4, 2018 9:01:05 GMT
Just received an email from RS inviting me to invest additional funds at market high rates. Clicked the Invest Now button to find the website is down for maintenance. You couldn't make it up! That reminds me of a time in the 80's when shops had just started "price matching". A friend went into a shop to buy a portable TV for £150 only to find out it had sold out. He then went to another shop selling the same model for £200 and asked if they price matched. The store said yes so he proceeded to tell them the the TV was only £150 in the shop down the road. "Why don't you buy it from there" said the shopkeeper. "Because they are out of stock" said my friend. "Well ours are only £150 when out of stock too" said the shopkeeper.
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ashtondav
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Post by ashtondav on Dec 4, 2018 9:43:49 GMT
Just received an email from RS inviting me to invest additional funds at market high rates. Clicked the Invest Now button to find the website is down for maintenance. You couldn't make it up! That reminds me of a time in the 80's when shops had just started "price matching". A friend went into a shop to buy a portable TV for £150 only to find out it had sold out. He then went to another shop selling the same model for £200 and asked if they price matched. The store said yes so he proceeded to tell them the the TV was only £150 in the shop down the road. "Why don't you buy it from there" said the shopkeeper. "Because they are out of stock" said my friend. "Well ours are only £150 when out of stock too" said the shopkeeper. 😊
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benaj
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Post by benaj on Dec 4, 2018 11:46:25 GMT
Just received an email from RS inviting me to invest additional funds at market high rates. Clicked the Invest Now button to find the website is down for maintenance. You couldn't make it up! RS knows the emails work. Now 1 year rate to lend now is 2.9% @ 11:46. Last match was yesterday 18:10 @ 4.2%
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Post by gravitykillz on Dec 4, 2018 11:54:56 GMT
I have rules when i invest in RS. I withdraw all funds unless rolling is 4% or above. 1 year is 5% or above or 5 year is 6.5% or above.
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scc
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Post by scc on Dec 4, 2018 12:37:44 GMT
Same with very similar numbers. I will tend to leave it there a day or two to see if it'll match.
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benaj
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Post by benaj on Dec 4, 2018 13:33:11 GMT
The power of email marketing. There wasn't much money on the 1 year before the email, less than £1Mil, now the market rate on 1 year is 2.9% (1.7Mil) and 3.1Mil cumulative @ 13:32
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