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Post by GSV3MIaC on Jul 31, 2017 20:17:20 GMT
Money on the rolling market can come from anywhere, not just rolling repayments (some of it can even be new deposits .. much of it can be interest and capital repayments from any of the markets. A lot of folks who were in 3/5 year loans at sensible rates (6% and up) are reluctant to put it back in at today's rates, so it goes into rolling. Remember most RS loans are amortising, so lots of capital is getting repaid every day.
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spiral
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Post by spiral on Aug 1, 2017 7:45:03 GMT
Money on the rolling market can come from anywhere, not just rolling repayments You're either misreading what I wrote or I didn't make it clear enough. Its not the lenders money I was on about but the borrowers money. My point is if I have a £10K loan that RS decide to match in rolling there are a series of lenders that match my £10K. 1 month later after I have made my first repayment I will have a loan a little under £10K but for this example we'll still call it £10K. RS has repaid the lenders that made up my original £10K loan and not yet matched it to new lenders because that money is sitting on the market under borrower offers but I still have a £10K loan. That means either RS are taking on the risk from their own loan book or more likely, they are using the unmatched lender offers to maintain continuity despite not having matched them yet. It would be very interesting to see what would happen if all of the lender offers were pulled from the market simultaneously.
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Post by nutfield on Aug 1, 2017 8:34:00 GMT
But isn't this the way that Building Societies funded their 25 year loans from odd amounts deposited by all and sundry people some of whom deposited their cash to just save up for Christmas? This seemed to work well until they all got too big for their boots and decided that they could become banks - and pay their executives banking-type salaries.
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Post by diversifier on Aug 1, 2017 9:34:33 GMT
Spiral: IMHO (and I could be wrong) I don't think this is how the rollover works. I think that "1 month later......RS has repaid the lenders that made up my original £10K loan" isn't true. Instead, the 1-month loan will automatically try to sellout (whether it gets re-invested or not is separate), but that sellout goes into the borrower queue which is what you are seeing.
I 100% agree that the majority of borrower bids in Rolling are reinvestment: the *daily* volume is £5-10M, whereas the *weekly* volume on the whole platform is ~£10M
But what *rate* that sellout is being posted at, I can't understand. It shouldn't be floating, otherwise there is unquantified risk for RS between the rate that RS originally took on the e.g. 9-month loan. And that's not P2P. Neither does it look like fixed rate sellout, as this borrower offer rate floats upwards during each day to find the market rate.
I think the liquidity risk remains with the investor, not RS: if it doesn't sellout at any price on a particular day, then it remains with the original investor. " It would be very interesting to see what would happen if all of the lender offers were pulled from the market simultaneously." If everyone turns reinvestment off, then I think investors just discover that the money is retained until the term of the underlying contracts, which is 3-9 months. What else could it be in P2P? RS just point to their T&C's and say "we did inform you of the risk". This is what I was pondering in another thread: the P2P concept is just not consistent with a 1-month investor market & 3-9 month borrower market. It just can't be.
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dorset
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Post by dorset on Aug 1, 2017 10:08:41 GMT
That is exactly the point diversifier.
RS is borrowing very short (one month) and lending long pocketing the difference in rates. The liquidity risk is as you say is all yours. At some point in the future when the consumer credit bubble finally bursts the rolling lender will take the hit.
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robski
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Post by robski on Aug 1, 2017 10:16:23 GMT
Spiral: IMHO (and I could be wrong) I don't think this is how the rollover works. I think that "1 month later......RS has repaid the lenders that made up my original £10K loan" isn't true. Instead, the 1-month loan will automatically try to sellout (whether it gets re-invested or not is separate), but that sellout goes into the borrower queue which is what you are seeing. I 100% agree that the majority of borrower bids in Rolling are reinvestment: the *daily* volume is £5-10M, whereas the *weekly* volume on the whole platform is ~£10M But what *rate* that sellout is being posted at, I can't understand. It shouldn't be floating, otherwise there is unquantified risk for RS between the rate that RS originally took on the e.g. 9-month loan. And that's not P2P. Neither does it look like fixed rate sellout, as this borrower offer rate floats upwards during each day to find the market rate. I think the liquidity risk remains with the investor, not RS: if it doesn't sellout at any price on a particular day, then it remains with the original investor. " It would be very interesting to see what would happen if all of the lender offers were pulled from the market simultaneously." If everyone turns reinvestment off, then I think investors just discover that the money is retained until the term of the underlying contracts, which is 3-9 months. What else could it be in P2P? RS just point to their T&C's and say "we did inform you of the risk". This is what I was pondering in another thread: the P2P concept is just not consistent with a 1-month investor market & 3-9 month borrower market. It just can't be. I think in theory this is how it works, and RS must at some point be able to flick a switch and make it happen like this. As it actually stands today (and every day previously) they must make the assumption that enough funds are there in order to be able to be matched, because you can send you money to holding and withdraw it. Although with all that being said, maybe this is the point in the 1 day delay, they can send it to holding and you can request a withdrawl, but if for some reason there was not enough money to buy you out then maybe your withdrawl request would not happen and you would find you still own a loan waiting to be sold. There would be some funds available to be released though, the interest element. I do wonder if RS actually have all this programmed and available in order to deal with a liquidity crisis. It may well be whats behind the delay in getting full authorisation, being in a fully robust state for all normal eventualities, which I suspect they are not.
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Post by GSV3MIaC on Aug 1, 2017 10:53:23 GMT
Money on the rolling market can come from anywhere, not just rolling repayments You're either misreading what I wrote or I didn't make it clear enough. Its not the lenders money I was on about but the borrowers money. My point is if I have a £10K loan that RS decide to match in rolling there are a series of lenders that match my £10K. 1 month later after I have made my first repayment I will have a loan a little under £10K but for this example we'll still call it £10K. RS has repaid the lenders that made up my original £10K loan and not yet matched it to new lenders because that money is sitting on the market under borrower offers but I still have a £10K loan. Yes, I was looking at the lenders queue - money can arrive there, as I said from lots of places. On the other side I think you (lenders) don't get repaid until RS has already matched the £10k (or at least the £9.xk remaining) on the market, and money on the rolling borrower queue can come from new requests (of practically any duration) or from 'please refill this rolling loan' (but, as I say, I suspect that happens before you get repaid, so lining up the pieces would be challenging). Only the new requests are likely to be obvious and/or negotiable.
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Post by diversifier on Aug 1, 2017 10:58:39 GMT
Ouch.
Since you are clearly watching closely, I'm sure you're right about what they're actually doing. "they must make the assumption that enough funds are there in order to be able to be matched," Again, ouch. Assuming liquidity is just bonkers. Look at 5-yr market hilarity right now [zero depth of borrowers, inverted rate to Rolling]. I'm in 5-yr & not at all bothered, just not re-investing.
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Post by fiatlender on Aug 1, 2017 11:37:04 GMT
4.1% available on the rolling right now if anyone is interested. Doubt it will last until the end of the day.
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Post by keyboardworrier on Aug 1, 2017 11:48:32 GMT
I've added an extra deposit to grab the 4.1%! It was too tempting for me to turn down.
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jcb208
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Post by jcb208 on Aug 1, 2017 12:19:05 GMT
Managed to reinvest mine from 3.5 to 4.3 a while back
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robski
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Post by robski on Aug 1, 2017 12:55:24 GMT
You're either misreading what I wrote or I didn't make it clear enough. Its not the lenders money I was on about but the borrowers money. My point is if I have a £10K loan that RS decide to match in rolling there are a series of lenders that match my £10K. 1 month later after I have made my first repayment I will have a loan a little under £10K but for this example we'll still call it £10K. RS has repaid the lenders that made up my original £10K loan and not yet matched it to new lenders because that money is sitting on the market under borrower offers but I still have a £10K loan. Yes, I was looking at the lenders queue - money can arrive there, as I said from lots of places. On the other side I think you (lenders) don't get repaid until RS has already matched the £10k (or at least the £9.xk remaining) on the market, and money on the rolling borrower queue can come from new requests (of practically any duration) or from 'please refill this rolling loan' (but, as I say, I suspect that happens before you get repaid, so lining up the pieces would be challenging). Only the new requests are likely to be obvious and/or negotiable. I dont think it works like this. When you get big rollover days they dont match till around lunchtime
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Post by squeezedmiddle on Aug 1, 2017 13:33:27 GMT
Rolling 4.5% right now
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radar
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Post by radar on Aug 1, 2017 13:34:47 GMT
Rollover now 4.5%
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spiral
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Post by spiral on Aug 1, 2017 13:37:19 GMT
I dont think it works like this. When you get big rollover days they dont match till around lunchtime That's what's confusing me. First thing this morning I had a sum of money returned which was placed on the market at my rate. Unless this was repaid from yesterday's matches and passed to me today, there is a period of time when I have no money on loan but the borrower still has their funds.
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