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Post by dan1 on Oct 27, 2018 9:11:09 GMT
I think that stems from difficulty in calculating the AER for amortising loans where capital repayment dates have moved / are unknown. ablrate , to overcome this issue and enable trading of non-performing amortising loans, how about simply replacing the displayed AER with a clear " N/A" and a note explaining that the AER cannot be calculated since the timing of capital (and interest) payments is not known. You have about the most sophisticated SM in the world of P2P, but it breaks down as soon as an amortising loan misses a repayment date. Not sure it's as simple as that because there are checks when trading - for example, I believe a trade will fail if the calculated yield falls below 1%, and I guess there are other traps within the code. I do hope this new venture, ASMX, won't prevent development of the SM into a full trading platform (auto-matching of bids/offers, full plethora of order types - limits, stops, etc and removal of restrictions like allocating cash to orders awaiting a trade).
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SteveT
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Post by SteveT on Oct 27, 2018 10:33:58 GMT
These are all self-declared non-performing loans. On a platform such as FC they would not be traded at all (even in olden times). There is no plan yet which provides for any future payments. FC couldn't permit trading of late / non-performing loans because it would expose their Autobiddies to buying them blind. Ablrate's market is entirely different, no-one able to buy or sell without making the positive decision to do so.
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bg
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Post by bg on Oct 27, 2018 10:52:56 GMT
These are all self-declared non-performing loans. On a platform such as FC they would not be traded at all (even in olden times). There is no plan yet which provides for any future payments. FC couldn't permit trading of late / non-performing loans because it would expose their Autobiddies to buying them blind. Ablrate's market is entirely different, no-one able to buy or sell without making the positive decision to do so. I don't think it would have been too difficult for FC to have allowed manual trading of NPL's while excluding them from the autobid.
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ceejay
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Post by ceejay on Oct 27, 2018 11:17:14 GMT
FC couldn't permit trading of late / non-performing loans because it would expose their Autobiddies to buying them blind. Ablrate's market is entirely different, no-one able to buy or sell without making the positive decision to do so. I don't think it would have been too difficult for FC to have allowed manual trading of NPL's while excluding them from the autobid. Probably not, though in the old days at FC there was a lot of "buy first, look later", especially with discounted loans. To avoid this happening with NPLs you'd have to put big flags on them to avoid the possibility of too many innocents buying risk they didn't understand - again, perfectly do-able but would they ever have wanted a system which highlighted how many bad loans they had?
However, returning to ABL - this is already a much more sophisticated market, with no autobidding, so it really ought to be possible for them to allow us to trade in these loans. After all, if they were so dead set against allowing trade in these loans why didn't they shut them off a couple of weeks ago? There is already a warning in place...
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blender
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Post by blender on Oct 27, 2018 13:18:45 GMT
The point about autobiddies on FC is right, especially when in the old days it did not buy at best. I am more concerned about the platform making these arbitrary decisions about what can be traded and what cannot, and at what range of prices individual loans may be traded. Those who make those decisions are responsible for the consequences. Personally I would have suspended trading in that group as soon as the underlying credit event occurred, and until they were either defaulted or put back on a sustainable path.
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nyneil
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Post by nyneil on Oct 27, 2018 19:10:44 GMT
It looks like a lot of contagion from the BNG loans. Some peeps feeling nervous about the platform?
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gibmike
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What is a cynic? A man who knows the price of everything and the value of nothing.
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Post by gibmike on Oct 28, 2018 10:52:30 GMT
I took one bite of a loan on the SM when it dropped to 75%. Could not resist.
I do think it is people simply removing an amount of risk from their holdings which is understandable. However at present we do not have enough information to see the impact across the loans.
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blender
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Post by blender on Oct 28, 2018 11:54:09 GMT
I took one bite of a loan on the SM when it dropped to 75%. Could not resist.
I do think it is people simply removing an amount of risk from their holdings which is understandable. However at present we do not have enough information to see the impact across the loans.
If you wait till 1st Nov, you should get some 75% offers on 97, before this amortising loans joins its undefaulted fellows awaiting a pub sale and full or partial eventual repayment (imo). Only 67 will then be left to stagger drunkenly on and contaminate the SM - just because it is interest only and the others are amortising. Meanwhile, trading in extended 69 is still limited to between 95% and 100% to avoid 'negative cash flows'. Some rule-based system would inspire more confidence in the SM. The other loans are the same as they were, risk wise, when it was a sellers' market.
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toast
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Post by toast on Oct 28, 2018 12:51:59 GMT
Meanwhile, trading in extended 69 is still limited to between 95% and 100% to avoid 'negative cash flows'. Those limits were applied prior the the extension being confirmed, I think, so they can be lifted now?
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toast
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Post by toast on Nov 2, 2018 16:08:29 GMT
Negative yields on 1000031.
Should there be an automated task, run daily, to cancel such offers?
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IFISAcava
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Post by IFISAcava on Nov 2, 2018 17:31:34 GMT
Any good reasons I have missed as to why the A*** C*** I*** loans are all trading at such heavy discounts (seems over and above the general platform malaise at the moment)?
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victors
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Post by victors on Nov 2, 2018 17:55:22 GMT
I was just thinking the same about the A*** C*** I*** loans. Seem like good value now at 95%.
No specific problem that I'm aware of - maybe just general caution.
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blender
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Post by blender on Nov 2, 2018 18:01:06 GMT
I am working on the assumption that 114 is dragging down the others, and the reason for 114 being sold might be that it was underwritten. I have bought some (which means that I have a vested interest in talking the price up - so take no notice of this post). There may be some entirely separate reason - I was selling another undamaged loan at 95% recently.
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nw99
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Post by nw99 on Nov 2, 2018 18:04:39 GMT
114 I’ve been a big buyer into the underwriters dumping
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blender
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Post by blender on Nov 2, 2018 18:23:22 GMT
I guess they are after the cash returned from 115. I remember 114 was well short, and so it could take some time.
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