r00lish67
Member of DD Central
Posts: 2,691
Likes: 4,048
|
Post by r00lish67 on Jan 14, 2020 9:42:49 GMT
The problem all P2P companies that operate a PF model have is they are essentially operating like a bank where provision fund is equivalent to capitalisation. If the PF exhausts, its no different to a run on a bank as investor confidence collapses and will trigger a liquidity event. This coupled with no proper secondary market for troubled loanbooks (incidentally a good example of someone who got this right = ABLRate) and there is a severe risk of multiple FC's occurring. Furthermore the PFs are calculated based on internal model assumptions which seem to change on a quarterly basis to cover up a weakening cash position. It makes sense to look at cash because its the metric that will act as a trigger for a liquidity event. The FCA reforms focused on compliance and contingency plans, but not so much on the actual risk. I'd give this a double-like if I could. Sums it up really well. The only point I'd slightly disagree with is re: it being no different to a bank run if the PF exhausts. The difference is that investors would be trying to sell off their invested money rather than withdraw their nominally 'free' cash (although appreciate in reality it would actually be invested). That's not to diminish the risk and impact though, as you say it's one of the fundamental issues that these firms face. If RS cease being able to raise any retail money, I can't imagine them patiently hanging about for 5+ years to wind down all of the outstanding loans with no new revenue coming in.
|
|
r00lish67
Member of DD Central
Posts: 2,691
Likes: 4,048
|
Post by r00lish67 on Jan 14, 2020 9:50:06 GMT
A good idea would be for p2p companies to create an independent body to measure the strength of provision funds. That would give investors more confidence. RS already do, they use brismo . The problem though is that the two constituents of RS's headline PF measure (the Interest Coverage Ratio) contains two large forecast numbers which are not audited and are always going to be subjective. Hence why (I believe) rogedavi is correct to look at PF cash levels as the most relevant measure.
|
|
aju
Member of DD Central
Posts: 3,480
Likes: 917
|
Post by aju on Jan 14, 2020 10:37:11 GMT
So it's clear this cash value is important but I wonder why the percentages are so large and bold. Makes me wish I had been recording this correctly in the past. Does anyone have any details of the last 2 years of PF figures perhaps.
Looking at the overall figures last time I was not sure I fully understood the details, which is not like me to be fair, especially when the interest cover went down 3% points I was not sure it was that much of an issue. Now I'm not convinced anymore.
I agree with others its very unsettling when the press print this stuff, like many here I like to think I understand but it does make you think when I saw the 9M in print I thought, what just happened to make this so low.
The rates on access and the 1Y do seem to fluctuate seemingly quite randomly for me, but the main rates were stable born out by the different brick walls that seemed to build in them each day. At the moment though, 10:32 Tue 14th Jan the brick walls do seem to have dropped away at the main rates levels.
Access 209k @ 3% Plus 209k @ 3.5% Max 209k @ 4%
There is quite some scope across the piece.
|
|
|
Post by bernythedolt on Jan 14, 2020 11:28:29 GMT
So it's clear this cash value is important but I wonder why the percentages are so large and bold. Makes me wish I had been recording this correctly in the past. Does anyone have any details of the last 2 years of PF figures perhaps. The Times article spooked me enough to research this topic yesterday and I found this. It's a sticky thread under Ratesetter: p2pindependentforum.com/thread/10992/provision-fund-trackingEdit: Figures dry up after March 2019, so may not be exactly what you're after. Gives a good indication of PF figures and trends though.
|
|
aju
Member of DD Central
Posts: 3,480
Likes: 917
|
Post by aju on Jan 14, 2020 11:48:13 GMT
So it's clear this cash value is important but I wonder why the percentages are so large and bold. Makes me wish I had been recording this correctly in the past. Does anyone have any details of the last 2 years of PF figures perhaps. The Times article spooked me enough to research this topic yesterday and I found what you are after. It's a sticky thread under Ratesetter: p2pindependentforum.com/thread/10992/provision-fund-trackingSo that's a large thread and I see I've been there before but I will need to peruse it again to find the links to more recent data. Thanks for reminding me of it. I notice also that there has been an influx of more lending coming into the Access line. My 5% punt now has 200k more funds in front of it than about an hour ago.
|
|
robski
Member of DD Central
Posts: 772
Likes: 462
|
Post by robski on Jan 14, 2020 12:29:25 GMT
So it's clear this cash value is important but I wonder why the percentages are so large and bold. Makes me wish I had been recording this correctly in the past. Does anyone have any details of the last 2 years of PF figures perhaps. Looking at the overall figures last time I was not sure I fully understood the details, which is not like me to be fair, especially when the interest cover went down 3% points I was not sure it was that much of an issue. Now I'm not convinced anymore. I agree with others its very unsettling when the press print this stuff, like many here I like to think I understand but it does make you think when I saw the 9M in print I thought, what just happened to make this so low. The rates on access and the 1Y do seem to fluctuate seemingly quite randomly for me, but the main rates were stable born out by the different brick walls that seemed to build in them each day. At the moment though, 10:32 Tue 14th Jan the brick walls do seem to have dropped away at the main rates levels. Access 209k @ 3% Plus 209k @ 3.5% Max 209k @ 4% There is quite some scope across the piece. Its the same £209k, its just showing across all three as the lender can select Access, plus or Max. The queues for lending are also the same, so if there is £100k showing in front of you, you cannot tell if its in access, plus or max. Basically it doesnt matter, all you are seeing is the effect of the 0.5% and 1% premiums for plus and max, otherwise its just one lender and borrower que
|
|
aju
Member of DD Central
Posts: 3,480
Likes: 917
|
Post by aju on Jan 14, 2020 14:56:46 GMT
So it's clear this cash value is important but I wonder why the percentages are so large and bold. Makes me wish I had been recording this correctly in the past. Does anyone have any details of the last 2 years of PF figures perhaps. Looking at the overall figures last time I was not sure I fully understood the details, which is not like me to be fair, especially when the interest cover went down 3% points I was not sure it was that much of an issue. Now I'm not convinced anymore. I agree with others its very unsettling when the press print this stuff, like many here I like to think I understand but it does make you think when I saw the 9M in print I thought, what just happened to make this so low. The rates on access and the 1Y do seem to fluctuate seemingly quite randomly for me, but the main rates were stable born out by the different brick walls that seemed to build in them each day. At the moment though, 10:32 Tue 14th Jan the brick walls do seem to have dropped away at the main rates levels. Access 209k @ 3% Plus 209k @ 3.5% Max 209k @ 4% There is quite some scope across the piece. Its the same £209k, its just showing across all three as the lender can select Access, plus or Max. The queues for lending are also the same, so if there is £100k showing in front of you, you cannot tell if its in access, plus or max. Basically it doesnt matter, all you are seeing is the effect of the 0.5% and 1% premiums for plus and max, otherwise its just one lender and borrower que Yeah I know what your saying and usually they do match as they do above. What I was trying to convey though was that there was so little money on the queues at the normal brickwall today and over the last couple of days that most of the time has 2-5M on it. Or has done since the new products started. I was using the Access offer to get way better than 3% and it's easy to get out without fees. Most of the loans in there that I have obtained are usually 36 months or more, ok they can close anytime just like others. I have been hitting the 1 year with a view to getting good rates too but also getting out slowly by marking high relend rates that I can quit as I want its not the same with access though but its still cost free. The access is a different beast thought as I can get out when I want, as long as there is not a run then we are all doomed until the run finishes or RS bails etc etc.
|
|
cb25
Posts: 3,520
Likes: 2,665
|
Post by cb25 on Jan 15, 2020 15:58:57 GMT
Just managed to get 5.2% on the 1year market
|
|
|
Post by Deleted on Jan 15, 2020 17:38:41 GMT
5.5% available on Plus at the moment (5% Access and 6% Max).
|
|
Stonk
Stonking
Posts: 735
Likes: 658
|
Post by Stonk on Jan 15, 2020 17:39:51 GMT
5.1% on Access / 6.1% on Max ... coming this evening.
It's like the Good Old Days again, when by mid-week the demand exceeded the wall of supply created by Monday's reinvestment orders, resulting in higher and higher rates late in each following day.
I am tempted back in by the 6%-plus on Max, but I remember in the Good Old Days that the rates at the weekend were always even better still ...
I'll stick my neck out and say that Max will reach 6.5% by the end of the weekend (and probably most of Monday, too, if the payment run is still taking ages).
|
|
ashtondav
Member of DD Central
Posts: 1,805
Likes: 1,087
|
Post by ashtondav on Jan 15, 2020 21:15:33 GMT
Just placed a nice wedge at 6.3%. Salivating, at the thought of a match....
|
|
|
Post by gravitykillz on Jan 16, 2020 6:16:32 GMT
I think rs had set their rates artificially too low and this did not reflect the risks involved in p2p investing. External factors have pushed rates back to a realistic level but for how long ? And will their be any side effects?
|
|
|
Post by bernythedolt on Jan 16, 2020 11:22:09 GMT
I think rs had set their rates artificially too low and this did not reflect the risks involved in p2p investing. External factors have pushed rates back to a realistic level but for how long ? And will their be any side effects? Currently quite a big disparity between 5yr and Max. In Max, the cumulative first £1m of lenders' money isn't exhausted until 6.2%, so there's a reasonable chance of a match anywhere up to that figure at some point, whereas in 5yr there's a wall of £3.3m stuck on the very first rung at 4.6%. Unlikely to get a match at 4.7% there for quite a while. I wouldn't expect such a wide disparity so you might be right that RS is manipulating things.
|
|
coogaruk
Hello everyone! Anyone remember me?
Posts: 702
Likes: 463
|
Post by coogaruk on Jan 16, 2020 15:19:09 GMT
I managed to match at up to 5.1% in Access yesterday but didn't even get a sniff at 4.9% in the 1yr. Markets are still broken then.
|
|
|
Post by paultw5 on Jan 16, 2020 16:23:59 GMT
I took 5.2 in the 1 year yesterday, about 1/2 million shoved in early afternoon,,,, then got 5.6 in (plus) at about 7pm after queuing for about 3-4 hours..
Markets drifting again as i type, but 1/4 million shoved in to stop. currently 3.5/4.0/4.5
|
|