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Post by WestonKevTMP on Jun 12, 2017 8:22:41 GMT
Shame really, my favourite thing about RateSetter was the markets. I was looking forward to the day when lenders had to pay RateSetter for the pleasure of looking after their money, like a Japanese central bank!
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adrianc
Member of DD Central
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Post by adrianc on Jun 12, 2017 8:35:33 GMT
Unless there is some statistical freak, it looks like the lowest the rates can go is 2% (Market Rate, excluding manually placed orders). It appears RateSetter have put a floor on the Market Rate calculation; 1yr Last Matched is currently 1.8%...
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Post by bracknellboy on Jun 12, 2017 9:28:12 GMT
Being of a scientific bent, I'm all for testing theory by experiment and observation. But for a theory to last all of 9 minutes is a bit sad.
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jonah
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Post by jonah on Jun 12, 2017 9:59:32 GMT
Unless there is some statistical freak, it looks like the lowest the rates can go is 2% (Market Rate, excluding manually placed orders). It appears RateSetter have put a floor on the Market Rate calculation; 1yr Last Matched is currently 1.8%... According to this... p2pindependentforum.com/thread/5507/current-loan-availability-tracker?page=4&scrollTo=1571581 year has been lower than rolling for a while now and less than 2% for a few days. 1 year does look very bad value currently, so much so that I have had to check that I wasn't mixing up the 2 numbers somehow (which I don't think I am!)
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Post by WestonKevTMP on Jun 12, 2017 13:06:38 GMT
Unless there is some statistical freak, it looks like the lowest the rates can go is 2% (Market Rate, excluding manually placed orders). It appears RateSetter have put a floor on the Market Rate calculation; 1yr Last Matched is currently 1.8%... As I said, 1.8% that's a manually placed order, there's no accounting for people's lending choices. The 2% is the Market Rate, the automated rate based on the previous day's matches. It doesn't seem to go below 2%. Either by some coincidence the average of the previous day's matches rates are 2%, or RateSetter have decided to set a floor. Kevin.
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adrianc
Member of DD Central
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Post by adrianc on Jun 12, 2017 13:08:48 GMT
1yr Last Matched is currently 1.8%... As I said, 1.8% that's a manually placed order, there's no accounting for people's lending choices. Quite. Market rate gets the blame, but pig-thick users do exist... So is MR following the market, or setting it?
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robski
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Post by robski on Jun 12, 2017 14:40:40 GMT
There is so much money sloshing around right now on RS
Its inevitable the rates will drop when supply exceeds demand this much, just as they shot up earlier in the year when demand was outstripping supply
The formula inherently benefits RS slightly over investors, and when you add in investors who want it invested no matter the rate then it arguably benefits RS a lot more
I keep hoping that the rates dropping will cause enough people to leave, but the fact the supply keeps going up rather than down isn't giving me confidence its likely to happen soon
If the market rate settles at say 2% and there is a continued oversupply then you will also get a queue at that rate even, it will take some shifting to move the rate away from 2% due to the formula on working out the market rate.
Overall I say the system works well, its just a sad state of affairs when people see 2% on some risky lending as worthwhile
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Post by yorkshireman on Jun 12, 2017 16:26:15 GMT
I was looking forward to the day when lenders had to pay RateSetter for the pleasure of looking after their money, like a Japanese central bank! That’s not funny and in very poor taste Kev.
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Post by WestonKevTMP on Jun 13, 2017 7:43:28 GMT
If the market rate settles at say 2% and there is a continued oversupply then you will also get a queue at that rate even, it will take some shifting to move the rate away from 2% due to the formula on working out the market rate. Well after 2 weeks of a 2.0% Market Rate, looks like someone gave the Market Rate black box a kick. The 1-year bond Market Rate has dropped to 1.9% AER.... But with over £20m of lender cash sloshing around on the markets, either RateSetter need to find some new borrowers or the rates will drop further. To be blunt, having worked with a number of UK P2P lenders, the finding of good quality borrowers has always been the problem. There's always been plenty of lenders looking for yield (with less risk than equities, but more than cash - a new asset class!). Kevin.
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09dolphin
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Post by 09dolphin on Jun 13, 2017 18:58:27 GMT
With the latest published inflation rates I wonder if some lenders appreciate they are losing money lending at the rates they do.
Obviously I have stopped lending money on this site as I'm not happy to be subsidising borrowers, and I prefer to lend money with an interest rate that at least equals inflation.
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09dolphin
Member of DD Central
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Post by 09dolphin on Jun 27, 2017 10:41:13 GMT
I really don't understand why people lend at rates that don't keep pace with inflation. Do these mugs actually want to lose money or don't they understand that you need to lend at a rate that equates to inflation. Can anyone explain the motivation of people who choose to lend at below inflation
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Post by p2plender on Jun 27, 2017 11:47:38 GMT
Well the way things seem to work, it is quite possible a few 'rogue' orders are sat in people's reinvestment settings. I've done this recently myself and I'm a six yr rs veteran! Always worth checking your settings imo.
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Post by nesako on Jun 27, 2017 11:51:46 GMT
I really don't understand why people lend at rates that don't keep pace with inflation. Do these mugs actually want to lose money or don't they understand that you need to lend at a rate that equates to inflation. Can anyone explain the motivation of people who choose to lend at below inflation Top easy-access ISA pays 1.06%, 1.25% for "normal" easy access account If someone has maxed out current account incentives and do not know of other platforms / do not want to have more accounts / cannot be bothered to move money to another provider / want to have platform diversification, then they will invest under inflation.
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Post by keyboardworrier on Jun 27, 2017 12:23:04 GMT
Where are people exiting RS putting their cash?
I'm at the point where I am considering giving up with RS, the issue is that I am not sure where else to put the money as I have as much as I am comfortable with in the various AC accounts, LW accounts etc.
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ceejay
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Post by ceejay on Jun 27, 2017 12:39:25 GMT
A very good question. At the moment my transfers are going to AC, but with the anticipated end of current RS loans, I will hit my self-imposed limit for AC in about three weeks' time.
Some is going into a stocks & shares ISA, but of course there's a £20k limit for the tax year, which means I will have considerably more potentially coming out of RS than I can put there, too.
Some I will recirculate in RS Rolling for a little while, just to see what happens (at least it's possible to get slightly higher rates on Rolling than 1 year, which is of course mad).
But the rest will probably end up back in cash, looking forlornly for a new home.
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