spiral
Member of DD Central
Posts: 909
Likes: 456
|
Post by spiral on Nov 11, 2015 10:50:42 GMT
"I don't quite understand your point. I assume if they did lend out the PF it would be for the benefit of the PF. "
The point I was making was that if they moved the goalposts so that say a 1 day late repayment was considered a PF payout. The PF would aquire a healthy selection of loans and increase funds available to the market.
Now I don't believe for 1 minute, any of this would happen. Its just something that with a little thought, could work to increase funds on market.
P.S. How do you multiquote? I've had a nightmare trying the above. The bits after my reply to the second quote didn't post (twice) hence the reason for adding a second reply.
|
|
pom
Member of DD Central
Posts: 1,922
Likes: 1,244
|
Post by pom on Nov 11, 2015 10:55:40 GMT
Click on the cog & select post for each you want to quote (only recently found out myself)
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Nov 11, 2015 10:55:46 GMT
P.S. How do you multiquote? If you want to select several posts to reply to:- click on the cog next to the post and 'Select Post', do this on several posts and then when you reply you will see all of them. If you want to repeat a post, click on BBCode rather than Preview and copy and past.
|
|
spiral
Member of DD Central
Posts: 909
Likes: 456
|
Post by spiral on Nov 11, 2015 16:58:22 GMT
Click on the cog & select post for each you want to quote (only recently found out myself) Thankyou P.S. How do you multiquote? If you want to select several posts to reply to:- click on the cog next to the post and 'Select Post', Thankyou If you want to repeat a post, click on BBCode rather than Preview and copy and past. And thanks again. I must say I'd never have worked all that out in a million years. Now all I have to do is remember it.
|
|
jlend
Member of DD Central
Posts: 1,817
Likes: 1,444
|
Post by jlend on Nov 11, 2015 20:06:18 GMT
If RS move goalpost that determine if and when the PF pays out, they could in effect achieve a very healthy portfolio within the PF. A healthy 6% return on funds deemed to be surplus would certainly be a better return than current arrangements (don't ask). But of course it's the whole circular risk thing going on here, and although it seems like a good idea also has so many negative connotations and risks. I don't think it'll happen until the fund has grown hugely and represents a much larger proportion of outstanding balances. Kevin. P.S. Any chance of a vote: www.altfi.com/awards/2015_peoples_choice_vote Just voted for you. Well deserved !
|
|
|
Post by bracknellboy on Nov 11, 2015 21:20:48 GMT
If RS move goalpost that determine if and when the PF pays out, they could in effect achieve a very healthy portfolio within the PF. A healthy 6% return on funds deemed to be surplus would certainly be a better return than current arrangements (don't ask). But of course it's the whole circular risk thing going on here, and although it seems like a good idea also has so many negative connotations and risks. I don't think it'll happen until the fund has grown hugely and represents a much larger proportion of outstanding balances. Kevin. P.S. Any chance of a vote: www.altfi.com/awards/2015_peoples_choice_vote If - and its a big if - I understand the original posts sentiment correctly, I think it would give me sleepless nights. The idea that the PF or even a portion of it would invest in the same assets that it is designed to provide provision against loss for strikes me as bonkers. At the very least, the relative 'cover' that the PF should be structured to provide would have to increase to allow for the losses on the assets it is provisioning for but for which it has itself invested. I think I would run a mile if I thought the PF was investing in RS's own loans, or even highly correlated asset class.
|
|
adrianc
Member of DD Central
Posts: 9,012
Likes: 4,824
|
Post by adrianc on Nov 11, 2015 22:16:35 GMT
If - and its a big if - I understand the original posts sentiment correctly, I think it would give me sleepless nights. The idea that the PF or even a portion of it would invest in the same assets that it is designed to provide provision against loss for strikes me as bonkers. Agreed - and, yes, that's the way I understood it, too. Oh, look - lots of loans have gone south. Still, at least there's enough in the PF to cover them. Oh, wait a sec. The PF was heavily in those loans. Umm...
|
|
|
Post by Deleted on Nov 11, 2015 22:25:37 GMT
If - and its a big if - I understand the original posts sentiment correctly, I think it would give me sleepless nights. The idea that the PF or even a portion of it would invest in the same assets that it is designed to provide provision against loss for strikes me as bonkers. Agreed - and, yes, that's the way I understood it, too. Oh, look - lots of loans have gone south. Still, at least there's enough in the PF to cover them. Oh, wait a sec. The PF was heavily in those loans. Umm... Yep, that sounds like a horrible idea. When the protection is actually needed to insure against defaults in a time of market stress, the protection itself has been decimated by defaults. Sounds like exactly the kind of flawed thinking used in the correlation products during the major crash of 2007/08. Here is a nice portfolio of diversified, uncorrelated loan products (CDOs, CMOs etc)... except, in times of market stress, suddenly they *are* correlated... ooops, sorry...
|
|
adrianc
Member of DD Central
Posts: 9,012
Likes: 4,824
|
Post by adrianc on Nov 11, 2015 22:27:52 GMT
Sounds very like the kind of thing Flawed Correlations might do...
|
|
jlend
Member of DD Central
Posts: 1,817
Likes: 1,444
|
Post by jlend on Nov 12, 2015 10:19:25 GMT
Asset allocation for the provision fund, now there is a topic for discussion.
The current provision fund trust is 16m plus and includes a half a million pound loan from ratsetter unless i have misunderstood. I seem to remember the trust pays a small amount of interest for the money but i may be mistaken.
With p2p isa it is not inconceivable that the fund gets up to 100m pounds in years to come. So where to put it ? In a bank savings account ? There is some irony in that ☺
Inflation will impact the fund over time so earning nothing on the money is a risk but perhaps one worth taking ?
A spread of low risk assets like government gilts and high grade corporate bonds, mixed with cash?
There might be something to be learned from the experience of others. Charities have money they invest to get better than cash returns without hopefully taking too much risk. Insurance companies invest our annual car insurance money to help keep premiums down but need to keep enough of the money liquid. Does anyone have any experience of other large funds that might give ideas ?
|
|
spiral
Member of DD Central
Posts: 909
Likes: 456
|
Post by spiral on Nov 12, 2015 10:29:21 GMT
What happens to the PF if the bank it is deposited with goes bust? Is only the first 85K covered?
|
|
|
Post by nutfield on Nov 12, 2015 10:39:07 GMT
What happens to the PF if the bank it is deposited with goes bust? Is only the first 85K covered? And only £75k from 1 Jan 16..........
|
|
|
Post by GSV3MIaC on Nov 12, 2015 10:41:54 GMT
Asset allocation for the provision fund, now there is a topic for discussion. The current provision fund trust is 16m plus and includes a half a million pound loan from ratsetter unless i have misunderstood. I seem to remember the trust pays a small amount of interest for the money but i may be mistaken. With p2p isa it is not inconceivable that the fund gets up to 100m pounds in years to come. So where to put it ? In a bank savings account ? There is some irony in that ☺ Inflation will impact the fund over time so earning nothing on the money is a risk but perhaps one worth taking ? A spread of low risk assets like government gilts and high grade corporate bonds, mixed with cash? There might be something to be learned from the experience of others. Charities have money they invest to get better than cash returns without hopefully taking too much risk. Insurance companies invest our annual car insurance money to help keep premiums down but need to keep enough of the money liquid. Does anyone have any experience of other large funds that might give ideas ? It's the pension fund investment scenario isn't it - large & ongoing (hopefully) accumulation of assets which might/will be required at some rate/date in the future. Typical answer is a mix of income producing equities and bonds, balance according to taste. Of course there is no such thing as guaranteed safe .. government bonds? Would than be Greece, Argentina, or pre-WW2 Germany? Even 'unlikely to default governments' (name one?) use inflation to chisel away over time. Personally I'd rather lend it to XYZ-Large-Co by way of a bond, on the assumption that most XYZ-Large-cos at least get properly audited. Oh, did someone mention Polly Peck. B&gger. 8<. Eggs/baskets, off-ya-go. (nb, this is not to be regarded as investment advice!).
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on Nov 12, 2015 10:48:15 GMT
Put it into Zopa with Safeguard?
|
|
spiral
Member of DD Central
Posts: 909
Likes: 456
|
Post by spiral on Nov 12, 2015 11:50:22 GMT
Put it into Zopa with Safeguard? Don't they have enough institutional investors!
|
|