registerme
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Post by registerme on Jan 16, 2016 22:49:47 GMT
Roll up, roll up, available for your perusal right now, this very second, on the secondary market. I suspect it's tripped a date so gone from uninteresting to "frickin ridiculous", but still, whoever has the sell offer up should pull it already  . |
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Post by ablrateandy on Jan 16, 2016 23:28:00 GMT
I will keep an eye on it (but interestingly as an investment it is likely to massively outperform the FTSE based on recent trading... ) |
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duck
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Post by duck on Jan 17, 2016 6:03:19 GMT
....... but interestingly as an investment it is likely to massively outperform the FTSE based on recent trading... ) is it true that Glencores new mission statement is "When you find yourself in a hole stop digging." ?
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blender
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Post by blender on Jan 17, 2016 11:14:04 GMT
I will keep an eye on it (but interestingly as an investment it is likely to massively outperform the FTSE based on recent trading... ) That may be true before tax, but that -11% will look a lot worse if you pay tax on the interest.
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wysiati
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Post by wysiati on Jan 17, 2016 15:10:11 GMT
I will keep an eye on it (but interestingly as an investment it is likely to massively outperform the FTSE based on recent trading... ) Many people will take the view that the platform has a responsibility to protect lenders/investors from entering into any transaction which would result in guaranteed losses if held to term. Other platforms have taken to steps to ensure that such a situation could not arise. Your lack of safeguards seems a bit pathetic if that is what is being described here. Given that there has been a volume of feedback that users have found your secondary market difficult to understand anyway, not to mention the calculation errors, it could later be argued that, as a platform, you should have reasonably foreseen instances in which such loss making transactions would have been entered into, even inadvertently, and therefore done something about it. Some of the more proactive platforms simply do not allow loan parts to be listed with buyer rates (annualised return including estimated bad debt) below a certain threshold (e.g. FC 4%).
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Post by ablrateandy on Jan 17, 2016 15:23:11 GMT
The safeguard is that we check everything that goes through. We have the right to cancel trades if we feel that they are unfair and generally we would consider a negative AER to be unfair. There have been two such instances in the past, both of which were rectified to the satisfaction of both parties.
I am aware of the offer involved and the lender involved and we are in discussion as to what steps are "appropriate".
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blender
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Post by blender on Jan 17, 2016 16:25:43 GMT
I know that I have argued previously that apparent poor deals can be used to transfer loan assets between connected persons - where the premium does not matter. Where there are no current offers on the Ablrate SM, doing the transaction at a poor rate will stop other parties intervening. However, I do tend to agree with Wysiati that a minimum positive AER could easily be set for making offers and automatically removing degraded ones. The person who is not able to appreciate the implications of a poor or negative AER is also the person who will not appreciate the additional effect of income tax on interest. Perhaps better and easier to build in and publicise some limits rather than to have to monitor offers and trades, and intervene where thought necessary. Surely Andy has better things to do, especially as the platform grows in volume.
To protect the consumer-lender, that -11% offer really should not be possible.
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james
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Post by james on Jan 17, 2016 17:00:14 GMT
I do tend to agree with Wysiati that a minimum positive AER could easily be set for making offers and automatically removing degraded ones. Completely removing offers or bids that are negative yield wouldn't be helpful to the person who created that deal, who could just edit it to resolve the problem caused mainly by the passage of time. But no need to let them be included in the list of pieces that are included in purchase and sale transactions. The yield of an offer to sell would normally decline over time for most loans so they require quite regular adjusting of the markup/discount if a consistent yield is the objective of the seller. Selling at minimal price is a trick that has been used at Bondora to move pieces between accounts at low cost, circumventing the charge of 1.5% for buyer and seller that Bondora used to have. Selling at negative yield is also a potential tax evasion tool, another reason not to be very keen on that, though selling at a low price has a similar but less obvious effect. At a place like Ablrate with helpful customer service, a request to move between accounts would probably be honoured if legal, eliminating the need for more fiddly and risky approaches. Transfers between spouses outside any tax wrapper would be one clearly legal common case.
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Post by ablrateandy on Jan 17, 2016 19:34:55 GMT
We've got a solution on the work list |
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Post by ablrate on Feb 27, 2017 13:56:53 GMT
On this one, we have created a temporary fix. The maximum premium is now 110%, which should take care of any negatives for the moment, however we are we coding a minimum yield figure where loans cannot be bought with less than a 1% yield. This will solve the ''pausing in the last month issue'' and will also guard against inadvertent losses by unsuspecting lenders, albeit it still leaves the possibility for errors... What we cannot do is police every trade and we do already have a multitude of risk warnings, summary of what you are about to do etc... In 10,000+ trades on the SM we have had one that we have reversed, but we feel it is prudent to make sure there is something that catches potential losses.
Regards
Ablrate
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blender
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Post by blender on Feb 27, 2017 15:06:51 GMT
On this one, we have created a temporary fix. The maximum premium is now 110%, which should take care of any negatives for the moment, however we are we coding a minimum yield figure where loans cannot be bought with less than a 1% yield. This will solve the ''pausing in the last month issue'' and will also guard against inadvertent losses by unsuspecting lenders, albeit it still leaves the possibility for errors... What we cannot do is police every trade and we do already have a multitude of risk warnings, summary of what you are about to do etc... In 10,000+ trades on the SM we have had one that we have reversed, but we feel it is prudent to make sure there is something that catches potential losses. Regards Ablrate Just to be sure, that means that the max premium is 10% and the max price paid is 110% of remaining principal? Sounds good to me. Presumably there is no parallel limit on selling at a discount, if you need to raise funds/get out in an emergency. For info FC max premium is 3% and max discount is 20%.
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Post by ablrate on Feb 27, 2017 16:55:43 GMT
Hi
Yes, 110% max right now. Max discount right now is 75% and has stayed the same.
Regards
Ablrate
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blender
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Post by blender on Feb 27, 2017 22:07:26 GMT
Yes, but there is a lot of context, like having to break the relationship with the developers and take things in hand, plus the limitations on resources for a small platform plus all the other good work which has been done in improving the platform. There has always been a manual fix for this rare problem. Unlike some other platform where vast capital sums are thrown at the business but serious faults, like selling parts on the SM twice, crediting the seller twice, debiting both buyers but giving one of them the loan part - not fixed for years and no intention to do so. Ablrate is not perfect and there are more important fixes that this one needed, but the commitment and effort is there.
BTW for 75% discount I am reading 25% discount giving a min selling price of 75% of remaining principal.
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