applets
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Post by applets on Oct 29, 2017 19:15:13 GMT
It seems a bit like Brexit - let's have a poll and if you don't win just keep on arguing in the hope that you get the result you want anyway. Having said that, this forum probably represents a small sub set of the lenders on MT and perhaps the result of the poll should be ignored (but please not on the grounds that the views of BHs should have more weight than everyone else).
I can see why those wanting to get out of a loan might wish to offer a discount to enable them to do this. Indeed, the argument has been made elsewhere that MT should allow trading of defaulted loans so that those stuck in a loan can get out. In both cases this relies on there being lenders willing to take on a defaulted loan/ a loan with potential problems because they can buy at a discount. I am sure there will be some who will buy, but enough to clear the SM quantities we see at present? I am not convinced.
The SM queues at present are as much to do with lack of confidence as anything else. MT has had a poor summer and start to autumn - defaulted loans, dodgy new loans, poor communication, less than transparent information about the performance of loans etc. It is hardly surprising that many lenders are spooked when they see potential bad news on this forum and head for the sell button. Just what discount would be required to encourage them to buy more of a loan from the BHs and flippers?
Perhaps MT does need to offer a trial period of discounting just to see how much of a discount needs to be offered to persuade people to buy a tainted/ defaulted loan on the proviso that if it doesn't work then the discounters will withdraw gracefully.
More valuable, however, would be action by MT to restore confidence in its platform and loan book.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 29, 2017 19:45:59 GMT
It seems a bit like Brexit - let's have a poll and if you don't win just keep on arguing in the hope that you get the result you want anyway. Having said that, this forum probably represents a small sub set of the lenders on MT and perhaps the result of the poll should be ignored (but please not on the grounds that the views of BHs should have more weight than everyone else).
I can see why those wanting to get out of a loan might wish to offer a discount to enable them to do this. Indeed, the argument has been made elsewhere that MT should allow trading of defaulted loans so that those stuck in a loan can get out. In both cases this relies on there being lenders willing to take on a defaulted loan/ a loan with potential problems because they can buy at a discount. I am sure there will be some who will buy, but enough to clear the SM quantities we see at present? I am not convinced.
The SM queues at present are as much to do with lack of confidence as anything else. MT has had a poor summer and start to autumn - defaulted loans, dodgy new loans, poor communication, less than transparent information about the performance of loans etc. It is hardly surprising that many lenders are spooked when they see potential bad news on this forum and head for the sell button. Just what discount would be required to encourage them to buy more of a loan from the BHs and flippers?
Perhaps MT does need to offer a trial period of discounting just to see how much of a discount needs to be offered to persuade people to buy a tainted/ defaulted loan on the proviso that if it doesn't work then the discounters will withdraw gracefully.
More valuable, however, would be action by MT to restore confidence in its platform and loan book. One issue in trading defualted loans is that purchasers would not be able to claim loss relief which adds an extra complication to pricing and an extra onus on the platform to ensure this is adequately communicated
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greeb
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Post by greeb on Oct 29, 2017 19:57:21 GMT
I accept that there are a range of views on this and perhaps MT could dip a toe in the water as a trial to satisfy part of their customer base with variable Sm pricing on one or two loans where it could be most beneficial - Liverpool comes to mind. Experience and customer feedback would be valuable all round. Satisfy which part the customer base??? All 69 in favour of discounting, from over 4,000 registered users? If MT pandered to all the whining my respect for them would diminish considerably! My reply yes and undecided ( who presumably wouldn't object to a trial) represent 40% of those who voted. Quoting 69 is a bit rich since the whole sample is only 5% of registered users so not particularly valid as a guide combined with the fact that the situation on the Sm is materially changed since the poll started. Why be so concerned to preserve a status quo that distorts economic reality by par pricing and prevents people in economic distress having an opportunity to control their outcomes ?
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dovap
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Post by dovap on Oct 29, 2017 20:04:43 GMT
such a load of old drivel from the pro-spivery lobby.
the desire to exploit is strong
so sad
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Post by beeje13 on Oct 29, 2017 20:16:33 GMT
Withholding interest on loan parts up for sale would be something I'd support. Would reduce the amount available on the secondary market and should make it easier to sell because of this.
I wouldn't push for it though.
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greeb
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Post by greeb on Oct 29, 2017 20:23:48 GMT
The exploitation comes from people in the current situation listing loans for sale as a cost free option when they otherwisse would not and thus destroying the market with wild growth in queue. Today I joined in this if you cant beat em join em mentality with a heavy heart. That is what is so sad and the decline in a once great small platforms prospects.
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Post by martin44 on Oct 29, 2017 20:25:36 GMT
Should MT introduce discounting to help SM liquidity?
Yes they should... and further more, Thankyou to the flippers (if there are any) if i want 10k in a loan and can only get 2k , then the flippers get their cash back , put their holding on the SM and i get my missing 8K . Can't see the problem... and yes i do some DD.
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r00lish67
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Post by r00lish67 on Oct 29, 2017 20:37:23 GMT
The exploitation comes from people in the current situation listing loans for sale as a cost free option when they otherwisse would not and thus destroying the market with wild growth in queue. Today I joined in this if you cant beat em join em mentality with a heavy heart. That is what is so sad and the decline in a once great small platforms prospects. Sadly, I did too. I had already trimmed most of what I wanted previously, but now the queue is so large that I decided I might as well join it to give me an option to sell in a month or two's time. Now, just watch some whale with hot info come and pick up the lot off us all tomorrow morning, total amateurs we are Edit: By the way, latest polling on the popularity vote just for the record. Sunday October 22nd: 28.73% for, 67.4% against, and 3.87% undecided/don't care. Sunday October 29th: 33.64% for, 61.21% against, and 5.14% of people probably increasingly fed up with this thread.
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Post by dan1 on Oct 29, 2017 21:36:07 GMT
Just for fun....
As of a few minutes ago there were: 215 votes of which, 29 are new members 3 are platform reps (not MT) 5 are staff 2 are ex-staff
Voters are not necessarily MT lenders. Individuals may have voted more than once (i.e. they operate more than one account, in contravention of the forum rules). Btw staff don't know how users voted.
Full disclosure: I voted Yes (that should be no surprise)
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Post by martin44 on Oct 29, 2017 21:56:17 GMT
I voted yes as well. fwiw.
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marka
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Post by marka on Oct 30, 2017 5:22:59 GMT
It seems that Liverpool and Newcastle are being cited as examples of how the oh so unworthy "sheeple" clog up the SM for BHs, but number 3 on the SM - Bollington 1st drawdown - would seem to disprove this.
All the other drawdowns for Bollington do not appear on the SM at all, despite having equal priority in the case of default. I can't see any way for this situation to arise other than a BH deciding to dump their holding in this (and perhaps being followed by a few "sheeple" too), so in this case it is a BH that is clogging up the SM for everybody else.
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archie
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Post by archie on Oct 30, 2017 7:27:14 GMT
It seems that Liverpool and Newcastle are being cited as examples of how the oh so unworthy "sheeple" clog up the SM for BHs, but number 3 on the SM - Bollington 1st drawdown - would seem to disprove this. All the other drawdowns for Bollington do not appear on the SM at all, despite having equal priority in the case of default. I can't see any way for this situation to arise other than a BH deciding to dump their holding in this (and perhaps being followed by a few "sheeple" too), so in this case it is a BH that is clogging up the SM for everybody else. Bollington - I used the fact that the tranche 1 queue was large to place a small amount on sale at the back rather than sell an easier tranche. Not a "sheeple" in my case.
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archie
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Post by archie on Oct 30, 2017 7:30:18 GMT
Wasn't it suggested on another thread that, since lenders get interest on the loan parts they put up for sale, that it makes sense to keep the less liquid loans on sale all the time? As such, it's not clear to me that the market is illiquid at all. It could just be an example of smart people understanding the system and wanting to keep all their options as open as possible. Perhaps, MT should consider not paying interest while loan parts are up for sale instead before introducing tax headaches like discounting. This seems to me an interesting question not taken up in this thread. What do people here think would happen. At the moment £1.6m is available on the SM. At a guess availability would drop drastically by perhaps as much as a half or two thirds leaving only those seriously wanting/needing to sell. Looking ahead, what advantage would such a measure provide? Would it discourage flippers? Improve liquidity? Impair MT's attractiveness to investors? If we hold the risk we should be paid interest. I'd buy far less of new loans if there was no interest on the sm, that wouldn't help the platform in my view.
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robski
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Post by robski on Oct 30, 2017 9:11:10 GMT
Tricky one this. I voted no originally and still view it as a no, there are pros and cons for sure.
Liverpool, well I am out of this loan, sold it a couple of weeks ago. I was happy to hold to term but changed some plans and decided that was one to sell. There is so much for sale i am sure there is some getting in the queue going on, get in the queue and if it sells too fast then buy a bit back. Whats to lose. Nothing unless your desperate for cashflow. I take that as you bought into the wrong product, lets not forget MT site is very clear lending can be illiquid. So to me if liquidity is your issue then by default you invested wrong since the platform spells out this risk very clearly.
When you consider discounting I am not sure how this would actually change the length of the queue. Take Liverpool, by now I would see that at a massive discount as people listing now would have no choice. Whatever the max allowed was, all I can see is that people may have lost their place in the que as their discount became too low and they had to relist at a higher one.
If you limit the discount to a low % then people will just go to that, to avoid being beaten, so pointless to even do it. Only hope is that people see the amount of the discount as worth investing, on Liverpool as we stand today I would suggest the que would be nigh on identical as we look at it now. If you allow high discounting, lets say upto the interest rate in a loan, you would IMHO only see an improvement in liquidity by doing this (with people watching the SM que like hawks for the time to list), as people are unlikely to list at a significant loss, unless they felt they had to as they were desperate for the cash. Its still not guaranteeing anyone would buy it, but it would certainly increase the chance if discounted high enough. A loan looking like it was going "lady humps" up would immediately hit this discount and again would probably become illiquid even at the max discount. If you felt there was a 20% chance of losing significant capital or being tied in for time with no interest eventually payable, then even a 10% discount would probably not persuade you to invest in that loan.
So my conclusion is small discounting is worthless, high discounting would allow liquidity for those willing to take the biggest loss on sale, until the percepted risk in a loan exceeded the max discount amount.
My last comment on BH/MH/SH is that businesses and i see MT no differently here always strive to spread their client base, its a form of insurance, you don't want to put all your eggs in one basket, and tailoring to suit the BH is an option, but if they decide to move on then that can create just as many issues as capital flows can stop quickly and become more sporadic. Lots and lots of small investors can lead to a smoother flow and less obvious loan filling issues. So having a mix of BH and SH can provide the sheer weight of funds, but with a profile where some moving on can be less problematic.
My frank conclusion is that people are looking to the SM to solve an issue that isn't an issue with the SM at all. The issue is a rebalancing of the views towards the platform, it was probably over frothed before and under right now. Its very easy to invest your money at 10-13% on a platform with no failures, with no liquidity issues, and a great flow of new loans. Its harder to commit to when the platform is having a bad spell, has liquidity issues (although I still say this was known from day 1, I think people just ignore this), and a flow of loans that seem of lesser quality to those previously offered. MT need to up their communication, their sudden absence from this forum currently at a time when more than anything they need to boost communication is their biggest problem
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r00lish67
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Post by r00lish67 on Oct 30, 2017 9:39:51 GMT
<snip> When you consider discounting I am not sure how this would actually change the length of the queue. Take Liverpool, by now I would see that at a massive discount as people listing now would have no choice. Whatever the max allowed was, all I can see is that people may have lost their place in the que as their discount became too low and they had to relist at a higher one. <snip> Some good points, and I can absolutely see how you'd draw the conclusion that a massive discount would be required given the size of the queue, as it's how I would imagine it myself without empirical information. However, I'm almost certain that this isn't the case because we have very good real life examples of what would happen. FundingSecure have a huge loanbook and some very high risk, large, loans with the same motley crew of suspect borrowers as participate throughout the P2P world. They also have had a lot of flak recently for various reasons, and so don't particularly have a better reputation than MT or anything like that. The maximum discount on FS today stands at a whopping 0.7%, and that'll buy you a 69% LTV DFL loan with only 65 days remaining or a 2nd charge loan with 75 days remaining at the time of writing. The reasons, I think, that what we'd expect to see doesn't actually happen, are: a) For loans with shorter terms the published effective rate becomes rapidly higher e.g. those loans i mention above have an effective rate of approx 16% as they only have short-ish terms remaining. Some people see these as therefore 'bargains' and buy in. b) As seems to be the case, a large portion of people are only selling on MT because everyone else is (me for one) and there's no cost to doing so. This becomes pointless when you can discount, as the small number of people who genuinely want to sell start offering small discounts. The 'sheeple' then decide to de-list or not bother listing as they don't really want to sell at a loss and there's no point in not offering the best price. So, in sum, the actual 'real' selling market is much smaller than you may think and the amount that people are influenced by discounts is much larger than you think. FS is I think the most comparable example, but you can also look over at Assetz Capital or Ablrate for others, and I believe what I'm saying holds true there too. Funding Circle used to be another example too before the recent changes, although in that case you hardly ever saw discounts because of the army of autobidders buying at par. Edit: For genuinely distressed i.e. defaulted or hugely impaired loans, what you say might hold true. However, I would expect MT to follow suit with the other platforms and suspend these loans from the SM entirely where this is the case.
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