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Post by philanthropist on Sept 1, 2015 13:46:00 GMT
Apologies if this has been aired before:
Having taken the plunge and masqueraded as a "Ratesetter Expert" (I share others' dislike of this dissuading terminology), and clicked the "view full market" tab, what puzzles me is that at a time (a couple of hours ago) when "The rate to lend right now" (I share others' dislike of this coercive phrase, leading people to a rock bottom rate) was 4.2%, there was a smattering of people at every rate upwards from 4.2% (mostly tens of people, a few percentage points had up to 200 lenders), with the striking exception of 5.3% which was chosen by no fewer than 1748 lenders (it's 1750 now).
Why this colossal spike? Why are there so many contracts at this apparently arbitrary rate? Are they all placed by individual people following the largest herd, thereby swelling its ranks, or are these lending chunks connected in some way, perhaps via a large commercial lender? I'm puzzled - is there a simple obvious explanation?
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Post by pepperpot on Sept 1, 2015 14:02:34 GMT
Apologies if this has been aired before: Having taken the plunge and masqueraded as a "Ratesetter Expert" (I share others' dislike of this dissuading terminology), and clicked the "view full market" tab, what puzzles me is that at a time (a couple of hours ago) when "The rate to lend right now" (I share others' dislike of this coercive phrase, leading people to a rock bottom rate) was 4.2%, there was a smattering of people at every rate upwards from 4.2% (mostly tens of people, a few percentage points had up to 200 lenders), with the striking exception of 5.3% which was chosen by no fewer than 1748 lenders (it's 1750 now). Why this colossal spike? Why are there so many contracts at this apparently arbitrary rate? Are they all placed by individual people following the largest herd, thereby swelling its ranks, or are these lending chunks connected in some way, perhaps via a large commercial lender? I'm puzzled - is there a simple obvious explanation? 5.3% is todays 3yr 'Market Rate' so everyone choosing MR for repayments have been lumped there. The large number of offers is due to a long weekend and the first working day of the month (borrower repayments are grouped at the end/beginning of the month).
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oldgrumpy
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Post by oldgrumpy on Sept 1, 2015 20:10:27 GMT
Several people have expressed their distaste at RS's dual policy of recommending Market Rate to most lenders, while guiding another section to lend at a rate (in big black bold font) sometimes far below Market Rate, without making it clear (unless you are an expert, and click on the button) that Market Rate is specifically designed to enable lending at a fair rate within a very short period of days, and it would be advisable to wait.
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Post by philanthropist on Sept 2, 2015 6:51:05 GMT
Thank you Pepperpot - the spike's disappeared already!
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oldgrumpy
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Post by oldgrumpy on Sept 2, 2015 9:03:06 GMT
Those who were duped yesterday into (or decided for themselves) into lending at 4.0% on 3 year (and those borrowers who very suddenly appeared offering 3.8%) will be "interested" to see that matches at 5.9% were made this morning at 09:28 despite MR being 5.2% today.
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ashtondav
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Post by ashtondav on Sept 2, 2015 14:47:45 GMT
We are, collectively, the RS "nerds". The reality is that if p2p is to become a mass market - as it will with ISAs the process needs to be simplified. Most people don't want to "gamble" on rates, and have their money sitting on ice for days. They want to invest their money instantly at a good rate, similar to when they popped down the BS and deposited money in their account.
Most folks would run a mile from the likes of TC, AC and FC - too complex and uncertain they will never become mass market products. RS simply has to have a product for the man on the CLapham omnibus. "lend right now" is it.
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pikestaff
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Post by pikestaff on Sept 2, 2015 16:15:38 GMT
We are, collectively, the RS "nerds". The reality is that if p2p is to become a mass market - as it will with ISAs the process needs to be simplified. Most people don't want to "gamble" on rates, and have their money sitting on ice for days. They want to invest their money instantly at a good rate, similar to when they popped down the BS and deposited money in their account. Most folks would run a mile from the likes of TC, AC and FC - too complex and uncertain they will never become mass market products. RS simply has to have a product for the man on the CLapham omnibus. "lend right now" is it. I agree with all of the above, except that "lend right now" is NOT that product! It is a trap for the unwary, which is likely to catch out the man (or woman) on the bus, and send them running to the FCA when they realise how much below the "market" rate they have lent at. The mass-market product should just be: offer to lend at market rate; if not lent today then it goes back in the queue at tomorrow's market rate.
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spiral
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Post by spiral on Sept 2, 2015 18:35:46 GMT
They want to invest their money instantly at a good rate, similar to when they popped down the BS and deposited money in their account. But if the B/S said pop down this afternoon and we may give you an extra 0.5%, how many would still go in the morning.
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oldgrumpy
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Post by oldgrumpy on Sept 4, 2015 8:08:48 GMT
3 year had lender offers all the way down to 4.1% an hour ago. Now the best offer is 5.9%, 6.0%+ seems imminent. I wish I had been greedy and not invested at 5.8% last night!
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c88dnf
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Post by c88dnf on Sept 4, 2015 14:40:08 GMT
3 year had lender offers all the way down to 4.1% an hour ago. Now the best offer is 5.9%, 6.0%+ seems imminent. I wish I had been greedy and not invested at 5.8% last night! Today's MR in 5-year is 5.9%. This morning the "lend it now" was lower than that, but I was still matched at 6.3% before lunch. As I write at 15.37, there is £111k looking for lenders with 6.5% on the cards. The sooner Ratesetter admit they're in the wrong on MR calculation and abandon the "lend it now" rubric the better. Absent that, I can foresee a flood of complaints from new lenders to the FCA if the presumed mass-market ISA works on the same flawed bases.
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adrianc
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Post by adrianc on Sept 4, 2015 16:45:59 GMT
As I write at 15.37, there is £111k looking for lenders with 6.5% on the cards. There's now only £36k of 6.5% to go before it starts to gnaw on the 6.6% backlog... and £120k of unmet at 5.9%+, with £11k of that at 6.4%...
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trevor
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Post by trevor on Sept 6, 2015 15:12:27 GMT
Apologies if this has been aired before: Having taken the plunge and masqueraded as a "Ratesetter Expert" (I share others' dislike of this dissuading terminology), and clicked the "view full market" tab, what puzzles me is that at a time (a couple of hours ago) when "The rate to lend right now" (I share others' dislike of this coercive phrase, leading people to a rock bottom rate) was 4.2%, there was a smattering of people at every rate upwards from 4.2% (mostly tens of people, a few percentage points had up to 200 lenders), with the striking exception of 5.3% which was chosen by no fewer than 1748 lenders (it's 1750 now). Why this colossal spike? Why are there so many contracts at this apparently arbitrary rate? Are they all placed by individual people following the largest herd, thereby swelling its ranks, or are these lending chunks connected in some way, perhaps via a large commercial lender? I'm puzzled - is there a simple obvious explanation?
As I write this the "Rate to lend to right now is 5.9%" There is £10,674 borrowers waiting a lender and a lender has fallen for it. The next rate is 6.5% where there is just £10,690.35 waiting.
I'm finding Ratesetters bias towards the borrowers and the rip off of non "Expert" lenders to be very, very unpalletable behaviour. Add this to discount a couple of months ago where the 5 year market was down to circa 5.5% while the pile of lenders cash was matched leaves a bad taste. My cash went elsewhere during this period.
Sooner or later these lenders will realise they have been conned and their name plus P2P credibility will be damaged.
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ashtondav
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Post by ashtondav on Sept 6, 2015 16:23:45 GMT
There was no compulsion to lend. The lender(s) decided they would accept 5.9%. You are unwilling to accept 5.9% and will therefore bid at 6.5% or whatever
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Post by ogwellian on Sept 6, 2015 16:26:31 GMT
As I write at 15.37, there is £111k looking for lenders with 6.5% on the cards. There's now only £36k of 6.5% to go before it starts to gnaw on the 6.6% backlog... and £120k of unmet at 5.9%+, with £11k of that at 6.4%... My 6.6% was matched this morning just after eleven. It's been waiting for nine days.
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Post by geoffrey on Sept 6, 2015 17:47:16 GMT
I'm sorry for RS, but I'm in the camp that this coercive push towards the rate requested by borrowers constitutes a rip-off of naïve lenders, and does not befit the high standards and general transparency of "rate setting" that I had come to appreciate so much in RateSetter.
RS, you are at serious risk of sullying your image with this change.
You owe it to your first-time lenders to guide them towards a genuine market rate. You have precisely such a mechanism for setting the market rate in a fair manner, and I say that even after the recent change in the MR calculation which led to a lower MR than in the past. At the very least you should add a clear message underneath the "rate to lend right now" line saying something like "If you are prepared to wait for up to 24 hours, you may be able to lend at the Market Rate (currently x.x%)". Better, simply offer them the Market Rate on this page and, if it is higher than the highest borrower request, add a warning that funds may not be lent immediately. Or, if you prefer, offer lenders the facility to add their loan to the variable Market Rate algorithm that will produce a match in approximately 24 hours.
You OWE this to your lenders if you wish to create/maintain trust in your platform. If I were a new lender and I subsequently realized that I had lost anywhere between 0.5% and 1% on a loan I had made, potentially of substantial funds, OVER FIVE YEARS, I would a) get very angry, and b) would make an official complaint to customer services, if not to the FCA.
"History" is now littered with P2P platforms that lost their way because they refused to listen to warnings from their customers when they made a mistake. RS, you are making a mistake. Listen, before it's too late.
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