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Post by westonkevRS on Aug 21, 2015 19:49:50 GMT
5-Year Money Market Rate Volatility
The chart below shows the weekly Standard Deviations (as determined within Excel) for the daily MRs for 5-year money each week in 2015.  5-year money is clearly more volatile than monthly, not only with a Standard Deviation around 0.15 vs, 0.10 but also within the month (remember, day 21 is my favourite lending day!). Arguably it shows is that the changes to Market Rate and Your Rate had a small impact on the MR volatility for a short space of time, I personally think this was due to the old lower 'Your Rates' working through the system and being purged after a month. The volatility soon returned to it's normal monthly swings Any volatility with the cash backs has been merged into the typical weekly volatility within the month, and I would argue did not cause any additional volatility as it did for the monthly money (where a number of carpet blagging bonus chasing lenders tried to game the system, but that's to be expected....). @ westonkevRSlink.ratesetter.com/8Ls46js www.linkedin.com/profile/view?id=19236219
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locutus
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Post by locutus on Aug 21, 2015 23:12:31 GMT
locutus I am sad to hear that you are winding down your investment. But trust is very important to us, and if we have lost that trust it is only right that a lender should walk with his credit. What I would say however is that I'm aware of some of your transparency issues. Ironically enough these primarily relate to what you saw a anomolies in the market data and contract rates achieved, information that is freely available on the web site to provide transparency. So you have transparency issues with the transparent data. Perhaps we should be like a bank and say nothing - here is your rate and here are the fees, take it or leave it. I also spent some not inconsiderable personal evening time investigating your concerns and liaising at RateSetter HQ during the day. Although the answers were not sufficient for you, we did our best. And certainly the time spent was more than we could afford for every lender. I wish you well, Kevin. link.ratesetter.com/8Ls46js www.linkedin.com/profile/view?id=19236219 A little disingenuous Kev. The last word I would use to describe RS is transparent but perhaps we have different interpretations of the word. Even today, I asked customer services how the Sell Out calculation worked and was told that it may contain sensitive information unsuitable for public use. Honestly, customer services must think I was born yesterday with a response like that. Labelling me a problem customer instead of acknowledging the valid questions and concerns I have posed on numerous occasions won't work in the long run.
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wapping35
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Post by wapping35 on Aug 22, 2015 7:54:31 GMT
5-Year Money Market Rate Volatility
The chart below shows the weekly Standard Deviations (as determined within Excel) for the daily MRs for 5-year money each week in 2015. 5-year money is clearly more volatile than monthly, not only with a Standard Deviation around 0.15 vs, 0.10 but also within the month (remember, day 21 is my favourite lending day!). Arguably it shows is that the changes to Market Rate and Your Rate had a small impact on the MR volatility for a short space of time, I personally think this was due to the old lower 'Your Rates' working through the system and being purged after a month. The volatility soon returned to it's normal monthly swings Any volatility with the cash backs has been merged into the typical weekly volatility within the month, and I would argue did not cause any additional volatility as it did for the monthly money (where a number of carpet blagging bonus chasing lenders tried to game the system, but that's to be expected....). @ westonkevRSlink.ratesetter.com/8Ls46js www.linkedin.com/profile/view?id=19236219 Thanks for doing this Kev. Clearly a lot of work. I am focusing on the SD's over a month not each week. The reason for this is if you look at weekly variance you are going to pick up the variance we already know is present within both the new & old MR function due to the monthly cycle. You even mention that when you refer to the 21st of the month being a monthly peak. I would also ignore Cash backs which clearly also cause volatility. I am looking (when we have the data) at the Standard Deviation for August 1-31st 2015 versus May 24th - June 23rd (just before the MR change). That also involves a lot less work. Both ignore the CB & are relatively close to each other and thus minimise seasonal volatility (another factor which will come in if you look at a period of 3 years). Incidentally since August 1st it is apparent we have a weekly cycle which was not apparent with the old MR. That is each Sunday to Wednesday/Thursday in that period (3 weekly cycles) rates have fallen , 0.4% (6.1-5.7) , 0.4% (5.9-5.5) , 0.4% (6.1-5.7) …. as a prediction that would suggest Wednesday's MR (August 26th) will be about 0.4% lower than the MR for tomorrow. Let's see what happens.. Edit: I see the MR on Sunday 23rd August is 6.2% (same as Saturdays). So if the weekly cycle continues Wednesday/Thursdays(26/27th) rate will be 0.4% less. 5.8%..Anyway I am just providing feed back (based on the data/what I have seen, no conspiracy.. sorry I know that is v boring of me) . From what you have posted I assume RS is v wedded to this new structure at least for now. To be fair if we see 4-5 months of weekly cycles like the above that is only when it becomes a known cycle (like the 21st of the month one you mention)…. Incidentally if this cycle is now in play in addition to the "old" 21st of the month peak it would imply the new MR monthly peak will occur on the Sunday after 21st (so tomorrow… Edit: which came in at 6.2% which is the joint highest so far this month, along with Saturdays, The 21st was 6.0% ).
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markr
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Post by markr on Aug 22, 2015 21:12:15 GMT
Agreed. I've been investing with RS since 2012 and have always manually invested at a level that I am happy with. On a couple of occasions I've not re-invested for a couple of weeks (when rates are not what I've wanted) but I've always come back (I do invest in several other platforms) ..... RS has always been good to me! In return I'm prepared to invest a 6 figure sum. Likewise. I'm always happy to invest at a rate higher than my current average rate. Since I put a big chunk in in 2013 when 5.5% was considered a spike, this is mostly been quite easy! By parking funds in the monthly when necessary and bidding to catch spikes, I've got my average rate up from 5.3% to 5.9% now, which is fine by me. Sadly, I don't have a 6 figure sum to invest anywhere, but RS has the lion's share of my P2P investment.
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wapping35
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Post by wapping35 on Sept 13, 2015 9:59:09 GMT
I did a analysis of the weekly MR variation (Monday to Sunday) for the 6 weeks from the start of August. The first one being the week commencing August 3. The graph attached shows the variation from the mean / average MR for that week. Doing that removes the variation due to the tendency of MR to rise over the month peaking around 25th of the month (as has been mentioned above). From what I can see it seems there is now a very predictable and consistent V - shaped weekly MR pattern (yes sometimes the V is steeper but a very consistent pattern seems to have been established). With rates peaking Monday & The weekend and low rates Wednesday & Thursday. I am selecting my rates (YR) using that pattern. It does seem it is pretty easy and predictable to beat the MR merely by not using it Wednesday & Thursday. Market Rate Weekly Variation graph.pdf (20.69 KB) Edit: I should say this is for the 5 year market. |
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Post by contangoandcash on Sept 16, 2015 8:56:55 GMT
I did a analysis of the weekly MR variation (Monday to Sunday) for the 6 weeks from the start of August. The first one being the week commencing August 3. The graph attached shows the variation from the mean / average MR for that week. Doing that removes the variation due to the tendency of MR to rise over the month peaking around 25th of the month (as has been mentioned above). From what I can see it seems there is now a very predictable and consistent V - shaped weekly MR pattern (yes sometimes the V is steeper but a very consistent pattern seems to have been established). With rates peaking Monday & The weekend and low rates Wednesday & Thursday. I am selecting my rates (YR) using that pattern. It does seem it is pretty easy and predictable to beat the MR merely by not using it Wednesday & Thursday. Edit: I should say this is for the 5 year market. Many thanks for this, very informative!
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