username
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Post by username on Apr 24, 2017 18:04:57 GMT
I think your post should be why I am leaving p2p as you appear to want everything but not accept any risk. There is a reason why people pay the rates that Lendy charge and that is not because there are all great borroweres with a stellar history. I guess we need to remember that it's not just asset risk, but also platform management risk.
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username
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Post by username on Apr 24, 2017 18:03:34 GMT
Yeah fair point, but it's a bit implicit to go from 'growing the business' to 'forcing investors to hold to term'. I really would like to know what value they place on a liquid SM, and what the lack of that liquidity will do to incoming cash flow. They are not forcing you to do anything - you invested, which was your choice. It is clear in the T&Cs that an early exit is entirely dependent on somebody prepared to buy that loan part A liquid SM benefits LY no end; not being liquid is not a situation that suits them as they will be less likely to fill new loans, and it generates a negative vibe amongst investors Yeah I did quote that on purpose - maybe I should have been more explicit
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username
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Post by username on Apr 24, 2017 17:29:40 GMT
EDIT: username actually in all of their emails they've been very clear that they are looking to substantially increase the pace of new business. An entirely logical effect of this will be to slow down SM sales, as people prefer newer loan parts which are further from "default" (in the Lendy sense), rightly or wrongly. I don't think they've made any secret of that. The SM was pretty liquid not too long ago (and certainly since they started talking about far more business) so you could easily have sold out by now if you didn't like the new strategy. Yeah fair point, but it's a bit implicit to go from 'growing the business' to 'forcing investors to hold to term'. I really would like to know what value they place on a liquid SM, and what the lack of that liquidity will do to incoming cash flow.
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username
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Post by username on Apr 24, 2017 17:25:46 GMT
I think everyone needs to put this into perspective and realise that there are clear reasons why this current glut has happened. Simply, they are: 1) No significant repayments this month 2) Quite a few new loans have been issued, and 2b) An old loan has 'rolled' into a new loan without actually repaying yet (annoying). That simple combination = a clogged up SM. A few repayments and an interest run = a liquid SM again. Feast/famine as usual. That said, I'm with you in being cautious about the situation endlessly getting worse, and it needs to be monitored closely over the next few months. If Lendy keep issuing new loans willy nilly, and the new loans vastly outstrip the repayments then a saturation point will be reached and exceeded, and after that the SM will become relatively pointless. All those reasons are a result of the way Lendy is currently running the platform. We're up to 2.8 million on the SM now and transaction volumes are looking low - clearly we're at the limit of investor demand. What I want to know is - do they see this as a cockup - too much dumped at one time, or should we expect this to be the new norm? Maybe they won't see this as a problem if new money keeps appearing to pickup the pipeline loans, but if they're expecting to max out investor appetite constantly then there is no point in having an SM.
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username
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Likes: 40
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Post by username on Apr 24, 2017 17:15:25 GMT
It's very frustrating - given the current tempo of origination, LY are changing the *de facto* investment model without any notice or clear guidance on their plans. Paul64 what are your thoughts on the state of the SM? Presumably LY see an extremely liquid SM as a sign of not enough supply and too much demand? Clearly demand will eventually be sated - is an illiquid SM the target equilibrium? If so, are there plans to remove the SM and move to a fixed term model for all investors?
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