agent69
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Post by agent69 on Feb 20, 2014 18:25:14 GMT
"RS is a MARKET so lenders can quite rightly set any stupid rate they like,..."
Quite so!
But I need reassurance that RS itself is not actually allocating stupid rates under the guise of "market rate".
The populated rate is now 5.2% simply because a borrower requires a loan at ----- 5.2%. There's no logic to this especially as the lowest lending offer is at 5.6%!!! I saw this when I logged on earlier tonight. Madness. As an aside, I received an e-mail on Tuesday from RS noting that my £200 at 5.7% had been unmatched for some time. The nice people suggested that if I reduced my asking rate my money would get lent out quicker. On Wednesday I received an e-mail saying my £200 at 5.7% had been matched.
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mikeb
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Post by mikeb on Feb 20, 2014 18:57:47 GMT
Yet again the small dangling offer causes a suggestion to undercut it. Again, 5.7% was achievable within the day, so 5.2% was just unnecessary queue jumping Attachments:
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bugs4me
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Post by bugs4me on Feb 20, 2014 23:08:57 GMT
Yet again the small dangling offer causes a suggestion to undercut it. Again, 5.7% was achievable within the day, so 5.2% was just unnecessary queue jumping Now back at 5.6% - all go figure time stuff for me. So today the populated rate has been 5.2% - 5.6% - 5.2% - 5.6% (think I've got the correct number of changes but stand to be corrected). Fortunately I set my own rates. If that availability ever ceases to exist then I'll go into withdrawal mode.
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oldgrumpy
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Post by oldgrumpy on Feb 20, 2014 23:31:55 GMT
"So today the populated rate has been 5.2% - 5.6% - 5.2% - 5.6% (think I've got the correct number of changes but stand to be corrected). Fortunately I set my own rates. If that availability ever ceases to exist then I'll go into withdrawal mode".
Me too. Today I achieved a 5.7% on a small reinvested repayment during that sequence.
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pikestaff
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Post by pikestaff on Feb 21, 2014 7:46:26 GMT
My worry with the new system is that the percentage of lenders accepting stupidly low suggested rates will be high enough that they become the Market Rate, hence driving the return down for passive reinvestors especially. RS is a MARKET so lenders can quite rightly set any stupid rate they like, and borrowers can ask for any rate they like (Look at complaints about another place where this no longer happens!). If there was a successful lender conspiracy to drive rates up to 6% (facebook, twitter?) the borrowers would fall away, lenders would get fed up and rates would fall. I log in daily to see if I have at least £10 to re-invest and keep updated on the markets. I think its all very clear - actively manage for the best rates, invest passively for slightly lower but still excellent rates (4.9% Rate Promise -(Terms and conditions apply) anyone?). You've missed the point. If a few people consciously put in stupidly low rates, so be it. There should not be too many and I would not expect it to affect the Market Rate (as defined). But the suggested rate process, as currently implemented, will inevitably result in significant numbers blindly accepting what is suggested. And that will result in the suggested rate becoming the Market Rate (as defined), pulling rates down for passive investors. I would expect the spread between active and passive investment to widen significantly and that is not good.
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oldgrumpy
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Post by oldgrumpy on Feb 22, 2014 10:26:04 GMT
How to reduce your interest rate on monthly access in Ratesetter by more than a quarter. Do what is suggested in this screen shot, 10:20 today. Accept 1.4% when the going rate is still only 1.9%! Really this is nonsense, Kevin/Rhydian. Stop this link to what a borrower decides they want to pay. (Full market rates also shown).
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Post by chielamangus on Feb 22, 2014 11:21:23 GMT
"RS is a MARKET so lenders can quite rightly set any stupid rate they like" someone said. But it is not an efficient market if some players behave irrationally - some lenders see their opportunity cost as what they get in the bank (0.5 to 1 per cent) when in fact it is what they could get in RS. So they drive the rates down, aided by RS website defaults, which makes naive lenders the market rate setters. Nothing has been done about this despite some sort of promise. It can only involve changing one line of code - hardly any work at all. But even that won't remove the irrational ones - they are a cross we have to bear.
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oldgrumpy
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Post by oldgrumpy on Feb 22, 2014 11:31:39 GMT
Anyone is entitled to offer at 1.4% in the above scenario. There won't be many of those, and their funds will soon be mopped up. I am beginning to object strongly to RS actually populating that "suggestion" box with such figures. I am still awaiting assurance that "passive" people's funds are not automatically being lent out at rates like that 1.4% rate just because RS have put that figure in. IMHO the market rate there is 1.9% and I want to know that ONLY the people who have manually offered cash at 1.4% have their funds lent out at 1.4%, or less than 1.9%. I'm going to shut up now.
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bugs4me
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Post by bugs4me on Feb 22, 2014 13:08:24 GMT
Anyone is entitled to offer at 1.4% in the above scenario. There won't be many of those, and their funds will soon be mopped up. I am beginning to object strongly to RS actually populating that "suggestion" box with such figures. I am still awaiting assurance that "passive" people's funds are not automatically being lent out at rates like that 1.4% rate just because RS have put that figure in. IMHO the market rate there is 1.9% and I want to know that ONLY the people who have manually offered cash at 1.4% have their funds lent out at 1.4%, or less than 1.9%. I'm going to shut up now. No don't shut up grumps. I've always said that RS is not for passive lenders - go to Zopa for that. I check daily and have my reinvestment rate set high so there's no chance of it being lent out. Then I look and see what's happening and adjust accordingly. We are though as you correctly state waiting for clarification of some description.
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oldgrumpy
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Post by oldgrumpy on Feb 22, 2014 18:07:32 GMT
Well someone has just manually done what Ratesetter "suggest". Dumped £10K in 5 year at 5.4% when there's just £40 in 5.5% and £5.1K in 5.6% and £4.1K in 5.7% (which I have just matched in, having come down a notch). Ooops! ... sorry... Edit 23Feb 10:18: Good for him. He lent all his cash out in a few hours at 5.4%! I had to sit knibbling my knuckles until this morning to lend out the rest of my 5.7% . I was in 5.8% (the wrong end) so gritted my molars and came down. A few patient fellows are getting 5.8% today)
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mikes1531
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Post by mikes1531 on Feb 22, 2014 18:10:22 GMT
Anyone is entitled to offer at 1.4% in the above scenario. There won't be many of those, and their funds will soon be mopped up. I am beginning to object strongly to RS actually populating that "suggestion" box with such figures. I am still awaiting assurance that "passive" people's funds are not automatically being lent out at rates like that 1.4% rate just because RS have put that figure in. IMHO the market rate there is 1.9% and I want to know that ONLY the people who have manually offered cash at 1.4% have their funds lent out at 1.4%, or less than 1.9%. I agree. And I expect the FCA will agree as well. RS are taking advantage of naive lenders, and the regulators shouldn't take kindly to that.
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bugs4me
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Post by bugs4me on Feb 22, 2014 19:40:11 GMT
Well someone has just manually done what Ratesetter "suggest". Dumped £10K in 5 year at 5.4% when there's just £40 in 5.5% and £5.1K in 5.6% and £4.1K in 5.7% (which I have just matched in, having come down a notch). Ooops! ... sorry... The only 'compensation' is those silly rates will soon be snapped up. I refuse to drop my required rates to those levels. There are alternatives.
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mikes1531
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Post by mikes1531 on Feb 22, 2014 19:59:58 GMT
Well someone has just manually done what Ratesetter "suggest". Dumped £10K in 5 year at 5.4% when there's just £40 in 5.5% and £5.1K in 5.6% and £4.1K in 5.7% (which I have just matched in, having come down a notch). Ooops! ... sorry... The only 'compensation' is those silly rates will soon be snapped up. I refuse to drop my required rates to those levels. There are alternatives. This is true. However, my experience with the 'old' Zopa -- where lenders could set their own rates -- suggests that with P2P growing so quickly there seemed to be an infinite supply of naive/stupid lenders and they did have a noticeable effect on the rest of the sensible lender population. This resulted in rates in some markets -- at the time you could choose which quality (credit risk) of lender you lent to as well as loan duration -- that were, IMHO, unreasonably low. Not being willing to set my rates that low, I was unable to lend in those markets. If this happens at RS, then it will no longer be a place for sensible lenders to invest, and the only lenders there will be newbies, and possibly passive newbies at that. This seems to be the market Zopa are aiming for at the moment, and it's always possible that RS will decide that's where their future is. Unfortunate, but possible.
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bugs4me
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Post by bugs4me on Feb 22, 2014 20:29:11 GMT
The only 'compensation' is those silly rates will soon be snapped up. I refuse to drop my required rates to those levels. There are alternatives. This is true. However, my experience with the 'old' Zopa -- where lenders could set their own rates -- suggests that with P2P growing so quickly there seemed to be an infinite supply of naive/stupid lenders and they did have a noticeable effect on the rest of the sensible lender population. This resulted in rates in some markets -- at the time you could choose which quality (credit risk) of lender you lent to as well as loan duration -- that were, IMHO, unreasonably low. Not being willing to set my rates that low, I was unable to lend in those markets. If this happens at RS, then it will no longer be a place for sensible lenders to invest, and the only lenders there will be newbies, and possibly passive newbies at that. This seems to be the market Zopa are aiming for at the moment, and it's always possible that RS will decide that's where their future is. Unfortunate, but possible. Agree with your sentiments and if RS go that way then it's time to move on. All P2P/P2B's seem to start off with true peer lending then start muddying things up - they think they know best and the result is they are for the professional passive lender. If I wanted that I'd sit back, swallow more than a percent here and there and leave it in a so called 'high interest' rate bank account. For now though RS is okay if you're prepared to actively manage your involvement.
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Post by bracknellboy on Feb 22, 2014 20:44:31 GMT
Well someone has just manually done what Ratesetter "suggest". Dumped £10K in 5 year at 5.4% when there's just £40 in 5.5% and £5.1K in 5.6% and £4.1K in 5.7% (which I have just matched in, having come down a notch). Ooops! ... sorry... Yeah, I got a 5.7% match mid morning having put some on late yesterday expecting it to have to hang around for a bit.
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