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Post by bikeman on May 17, 2020 18:23:43 GMT
Ok I'll accept that maybe your assessment is correct but that being the case isn't it also the case that the platform is lending almost everything it has so it does't take more than a few spooked investors withdrawing to trigger a problem? And then GS compounds the problem by instead of attracting replacement investors it goes and spooks all the others by issuing a liquidity event. While I disagree with your second sentence (it's really not anywhere near as simple as you suggest - especially given the current economic climate - to rapidly solicit such investment), I agree with your first question that I've bolded. In retrospect, the GS model is quite bizarre and I feel a little silly for not having thought about it more before investing myself. I understood the LE and RE processes, but I didn't think enough about how easily they could be caused given the lack of requirement for a willing investor to be ready to take up your capital if you chose to withdraw. Granted attracting investment at the moment might be difficult but as much as I hate AC they've manage to attract investment with cash backs and recently secured £15m from BBI. And now the govt is falling over itself to get platforms to offer it's BBLS and CBILS loans. So I really don't think GS had to shoot itself in the foot at the first hurdle.
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Post by bikeman on May 17, 2020 17:50:02 GMT
No, GS have created the problem by declaring a 'liquidity event' which spooked investors at a time when the extent of borrower defaults was unknown and the government support for borrowers wasn't in place. Had they bided their time and considered that most would need no more than a short payment holiday, they wouldn't have knee jerked into a 90 day countdown to a 'resolution event' and caused a likely run on the bank. I don't think you understand what caused the Liquidity Event. The platform can only function as long as investors don't withdraw more money than is on loan - but we did. GS declaring a LE wasn't a choice... there was about to not be enough money to go around. That is to say, your "run on the bank" was already happening. Just like it has done at every single other platform. It had nothing to do with borrower defaults. Ok I'll accept that maybe your assessment is correct but that being the case isn't it also the case that the platform is lending almost everything it has so it does't take more than a few spooked investors withdrawing to trigger a problem? And then GS compounds the problem by instead of attracting replacement investors it goes and spooks all the others by issuing a liquidity event.
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Post by bikeman on May 17, 2020 16:51:04 GMT
I guess investors panicking has contributed to this event, an essentially self-centered response. Every man for himself. No, GS have created the problem by declaring a 'liquidity event' which spooked investors at a time when the extent of borrower defaults was unknown and the government support for borrowers wasn't in place. Had they bided their time and considered that most would need no more than a short payment holiday, they wouldn't have knee jerked into a 90 day countdown to a 'resolution event' and caused a likely run on the bank.
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Post by bikeman on May 16, 2020 20:23:34 GMT
They're going to have trouble maintaining lending - as soon as they announced a 'stabilisation period' most investors wacked up their lend rates and put in withdrawal requests.
Shot themselves in the foot there.
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Post by bikeman on May 16, 2020 20:12:02 GMT
Wow you're fkin lucky - AC have never declared ANY of my losses as non-recoverable. Really, that doesn't sound right, which loans?. Nothing to stop you declaring them yourself if they meet the criteria though Id be cautious with anything covered by a PF as youll end up paying tax if the PF pays out down the line. Edit Oh those loans. Not in them so not really sure why they aren't in formal recovery and therefore don't qualify. Because AC make it up as they go. My advice to everyone is don't get sucked in by the incentives, run while you can.
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Post by bikeman on May 16, 2020 20:08:30 GMT
Because diversification is achieved through the provision fund in RateSetter. True, unequivocally. Having said that, presumably the 19k was put on the market in one lump, why would anybody expect any other result than it mostly going to a limited number of loans? Because Ratesetter claim that their provision fund backups up their loans so it makes no difference to risk having all funds invested in a single loan, so we take them at their word and put in lump sums. And then they undermine this by sticking a disclaimer against the details of each loan - a new addition which takes some finding: The Provision Fund we offer does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The Fund has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Provision Fund when considering whether or how much to invest.As an ex Assetz Capital investor I'm getting a bit of de ja vu.
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Post by bikeman on Apr 13, 2020 18:11:39 GMT
I've only been lending via AC for several months, but under the "Loans in Recoveries" section of my "Tax Statement" on the platform, it states: "Total funds in loans put into recoveries in the period 6th Apr 2019 to 4th Apr 2020 £xxx.xx (this could be declared as a potential loss during this period)". Wow you're fkin lucky - AC have never declared ANY of my losses as non-recoverable.
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Post by bikeman on Apr 13, 2020 18:01:51 GMT
To those who believe they have a genuine grievance, how about -make a formal complaint to AC -when that's exhausted, if the answer isn't to your satisfaction, make a formal complaint to the regulator -and/or start legal action against AC (nearly always a very costly and very risky move even if you're in the right)
Then come back and tell us the results, but in the meantime let's cool it on this (and other) threads?
Done almost 12 months ago. Regulator is a waste of space. AC repeatedly taking the piss and getting away with it. Glad I'm out.
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Post by bikeman on Apr 9, 2020 12:39:05 GMT
The last payment I received as 23rd Dec. When did you receive a payment? It depends which of the I** loans you hold. If, like me, you only hold #437 (Neilston) , you won't have received anything . AFAIK you should have received something if you held any of the others. This is because AC recovered some cash via a sale of the properties , but none of that cash pertained to #437, which remains unsold and of negligible value I believe. When AC were previously asked to explain why the #437 wasn't declared unrecoverable they referred to the possibility of recovery of the other loans. But now something's been recovered they want to treat them separately again. I would seem that AC group these loans together or split them according to their own benefit.
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Post by bikeman on Apr 9, 2020 12:34:03 GMT
Looking at rate trends volume entries for RS it seems there was not that much lent out yesterday Sunday 5th Aug - £82771 - relative to normal if I can call it that. Mind you it is the last day of the old ISA year and the next few days may reap more volume perhaps! That's a good thing isn't? I'd prefer if RS didn't form any new loans for the timebeing.
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Post by bikeman on Apr 9, 2020 12:24:31 GMT
... it is possible that this can be bought under control in a month or two. Wow. That is optimistic. Try this: www.wto.org/english/news_e/pres20_e/pr855_e.htm "World trade is expected to fall by between 13% and 32% in 2020 as the COVID 19 pandemic disrupts normal economic activity and life around the world." Firstly China claims to have bought this under control. Secondly, I'm referring to the UK bringing this under control or more importantly allowing people back to work, what happens in the rest of the world is not so relevant to RS. Many of the businesses/people RS lend to are not going to default if they are helped through this with deferred payments and have a job to go back to. These are not payday loans for the unemployed.
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Post by bikeman on Apr 8, 2020 20:42:13 GMT
The amount of money the government has put into the economy to protect jobs is nothing short of remarkable. This will be all over in a few months with the majority getting a reasonable income and their jobs protected. Sure there will be defaults but with this provision I think the level of defaults could be grossly over estimated. I think this scaremongering doesn't help and those that are cashing in potentially going to cause these platforms big problems. I'd like to see withdrawals frozen for 3 months like has been done at Growth street. Interesting that you read my post as "scaremongering". I think of myself as cautiously optimistic, certainly in the long run. I think it only realistic to note that a significant proportion of RS's borrowers are simply going to stop paying, whether officially sanctioned or not: and, if RS stay in their standard operating model and cover all missed payments from the PF, then the PF is going to be very stressed - and, as noted above, this PF top-up although very welcome won't make a huge difference on its own. Which is why we will I think see more levers pulled - such as the withdrawal freeze that you suggest. (Perhaps just a freeze on RYIs, rather than the full GS shutters-down?). I don't agree - most borrowers have retained some level of income and so can pay something. I'm of the opinion that most will be unwilling to default when it could all be over in a couple of months. Yes the PF will come under stress but if we can believe what's happened in China it is possible that this can be bought under control in a month or two.
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Post by bikeman on Apr 8, 2020 19:33:54 GMT
You think it fair that someone who's only holding with AC are suspended IL* loans that AC previously promised to refund but now can suspend indefinitely whilst levying an ongoing 'servicing fee' for as long as they deem fit? Effectively they've turned a liability into a revenue stream. As ilmoro has said the fee is not payable on defaulted loans. AC are also only taking the fee from via any interest payments that are being made by borrowers so I wouldn't worry about the fee impacting the loans you mention right now. If your only holdings are the loans you mention you need AC to survive and the fees are a small but important part of that. I also hold the loans you mention. Good to know but I think their communication could have been clearer. I've lost all trust in AC - they seem to make up the rules as they go along.
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Post by bikeman on Apr 8, 2020 19:30:08 GMT
Will this money be used to speed up withdrawals? Looking at what's happening in the world right now, I'd say that the Provision Fund is, or very soon will be, under huge pressure as borrowers simply stop paying. So the chances of anything being released as surplus from the PF are ... slim. My interpretation is that this is one of many levers that RS are frantically pulling in an attempt to avoid running headlong into the buffers. I have no idea whether they will succeed in this, although of course I hope they do. The amount of money the government has put into the economy to protect jobs is nothing short of remarkable. This will be all over in a few months with the majority getting a reasonable income and their jobs protected. Sure there will be defaults but with this provision I think the level of defaults could be grossly over estimated. I think this scaremongering doesn't help and those that are cashing in potentially going to cause these platforms big problems. I'd like to see withdrawals frozen for 3 months like has been done at Growth street.
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Post by bikeman on Apr 8, 2020 9:53:44 GMT
The fee, although undesirable, seems fairly reasonable at 0.075% per month. AC have clearly taken this approach for added security moving forwards to continue to pay interest and keep the platform in a healthier state over the coming months. I personally see it as just a partial retraction of the 1% bonus/cashback they have been paying to lenders. In the greater scheme of things, this isn't a huge blow given the global economic downturn, cut in UK base rate, etc. It's worth noting AC are adding an additional charge to Borrowers of 0.15% per month. On the positive side, AC have definitely been the most transparent P2P company when it comes to updates and they have given some tangible solutions to the liquidity issue where other P2P platforms are holding cards close to their chest. So you have to give them credit for that. With that said, I do sincerely hope it is a temporary fee and things will return to normal over the coming months. We'll see how this plays out. You think it fair that someone who's only holding with AC are suspended IL* loans that AC previously promised to refund but now can suspend indefinitely whilst levying an ongoing 'servicing fee' for as long as they deem fit? Effectively they've turned a liability into a revenue stream.
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