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Post by westonkevRS on Aug 16, 2014 20:16:39 GMT
P.S. to avoid any confusion, those against my imaginary wall are former banking colleagues from certain too big to fail banks . Certainly not any wonderful P2P lenders...
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Post by uncletone on Aug 17, 2014 7:57:53 GMT
We're gonna need a bigger wall....
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Post by goldservice on Aug 17, 2014 8:10:40 GMT
And I'm on here as a lender, the forum moderators insist on my "rep" tag. I can't remove it. I'm not an official community rep for RateSetter, just an P2P enthusiast. I love Zopa and FC, and have been lending since near launch. And I can't win. If I respond about the purity of the markets you say "I might be thinking he doth protest too much" and if I don't respond you moan. And besides, I have been internet trolled by people on the Zopa forum ("Don't bother having a 3 year market if it isn't working" thread), comparing me unkindly to used car salesman. I know that the Internet is a cruel place, but I've only ever tried to help. And I got attacked/trolled. It hurt me personally. So I've decided to back off. By for the record, the use of the monthly money is clearly stated here:http://www.ratesetter.com/lending/market_view.aspx The borrowers are "real" for the short term loans, the demand is not synthetic. In fact I find this statement ridiculous. The demand and supply if the markets is pure and always "real". If it were not, wouldn't the rates be lower? Kevin. 8< RS therefore is the sole buyer of monthly money. No one has disputed this yet, and if so, it is clear that RS has considerable market power AND market knowledge, none of which is available to the thousands of suppliers of monthly money. This is not an efficient market and and the market outcome is not what would occur under something approaching perfect competition with thousands of buyers and thousands of suppliers, and information symmetrically shared.>8 Sole buyer? RS may be the sole buyer for RS lenders but there is still the rest of commerce - banks and BS's are also buying monthly money. My apologies but I can't see your point here. Describing RS as running a monopsony (= buyer's monopoly?) seems to me a bit like saying that, when you are selling a car, say, the buyer won't reveal how much he is prepared to pay - and that's a fair tactic. You can always sell/lend to someone else. References to 'efficient market' and 'perfect competition' remind me of text book market theory that bears no relation to the real world. In the real word a perfect market is one that can be exploited and therefore destroyed by the first raider. I don't work in finance so I am reaching for my dunce's cap ...
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Post by chielamangus on Aug 17, 2014 8:21:08 GMT
I am not accusing anyone of conspiracy. It's just that the monthly access model is very different from the other loan periods - it is not a simple matching of lender and borrower, and this is not made clear. I never even thought about it until recently, assuming, somehow, it was the same model, which it patently isn't. It is as I have described. We lenders can take it or leave it - our choice - but it would be more transparent if this market operation was all made clear up front.
And another thing. The link you provide says our money is lent for one month. Imagine my surprise when I check my monthly loan contracts and find that many are for periods in excess of one month! in fact, only 16 out of 57 fit the bill. Four are for a fortnight, one is for 43 days, two are for 35 days and the rest are 1-2 days more than a month. I never agreed to this, but presumably it suits RS.
This is not what it says on the packet. Sounds like a one-sided agreement to me. I have tended to ignore the minutiae of the monthly market as this is the oil that lubricates longer term decisions, but I am beginning to get alarmed at the way RS is using this money. I have been trying to get my contracts to mature on different days of the month so that I am not overexposed to those days when rates are lower than average. But RS is bunchng my contracts up.
You may point to some small print somewhere and say I have agreed to all this. I am not aware that I have. None of these idisosyncrasies of the monthly market are highlighted anywhere on the site.
Over to you, Kev.
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Post by chielamangus on Aug 17, 2014 8:24:18 GMT
I don't work in finance so I am reaching for my dunce's cap ... You said it!
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Post by davee39 on Aug 17, 2014 8:45:26 GMT
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c88dnf
Member of DD Central
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Post by c88dnf on Aug 17, 2014 12:42:31 GMT
ROFL!! I'll stay with opaque (but not Zopa level opaque....)
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spiral
Member of DD Central
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Post by spiral on Aug 17, 2014 18:03:52 GMT
At least at £0.00p their anti money laundering charge is cheaper than TC 
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Post by mattr on Aug 17, 2014 19:19:51 GMT
I have some sympathy with chielamangus' argument. It's sold as P2P not P2RS2P. I would be very interested to know the economics of that from RS's point of view. I also
agree with Chielamangus it could be better flagged on the website.
All that said, I'm happy that a simple monthly market of the kind RS offers to lenders can't function without intermediation of some kind. And it's probably best to see the monthly market as a "take it or leave it" kind of product with inordinately low risk. In which case, yes please I will take it please. And I have.
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Post by chielamangus on Aug 18, 2014 9:35:02 GMT
Those monthly loans which aren't .... Another 5 monthly contracts overnight and none of them for a month! All a couple of days under. RS obviously needs the money on Sept 16th rather than Sept 18, and I am apparently powerless to enforce the agreement for a monthly loan.
Any answers yet, Kev?
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Post by wibble on Aug 18, 2014 12:06:37 GMT
The link you provide says our money is lent for one month. Imagine my surprise when I check my monthly loan contracts and find that many are for periods in excess of one month! in fact, only 16 out of 57 fit the bill. Four are for a fortnight, one is for 43 days, two are for 35 days and the rest are 1-2 days more than a month. I never agreed to this, but presumably it suits RS. Chielamangus - Are you referring to the maturity date, for each of your monthly loans? If so, that's quite a worry for me. I've only taken part in less than 5 monthly loans so far, and they've all been under 1 month long. If they were ever longer than 31 days, that would currently cause me some concern. Kevin - I'd appreciate some clarity here too, please? It's not a big issue (for me), but I'll need to adjust my cashflow procedures if the above info is correct. If it IS correct, then what's the ACTUAL max period a monthly loan can be? Thank you!
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sl75
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Post by sl75 on Aug 18, 2014 12:43:07 GMT
Those monthly loans which aren't .... Another 5 monthly contracts overnight and none of them for a month! All a couple of days under. RS obviously needs the money on Sept 16th rather than Sept 18, and I am apparently powerless to enforce the agreement for a monthly loan. Any answers yet, Kev? Although I don't participate in the monthly markets, it seems obvious to me that these are rematched loans which have a monthly payment on the 16th of each month. As the 16th was on a weekend this month, the payment due date would have been delayed until the next working day (i.e. today, the 18th), but the next payment still remains due on the 16th (at which point the borrower should make a payment covering the interest and capital due, and the remaining capital, if any, would be rematched against the monthly market. On a Monday morning repayment run, it would seem likely that a "luck of the draw" element would be expected to an extent - i.e. whether you get matched at a point when the system is processing repayments that were due on the Saturday (with next payment due 2 days before a full month), the Sunday (with next payment due 1 day before a full month) or the Monday (with next payment due in exactly a month). Conversely, at times when a borrower's next payment would otherwise be due to occur on a weekend, lenders would get matched for up to a couple of days longer than "exactly 1 month" (in particular, I'd suppose that the loans you got matched to today would have lasted from 16 July to 18 Aug for the lenders to whom those borrowers had previously been matched). As well as the weekend effect, most loan providers allow borrowers to pick their repayment day. Assuming RS follow this practice, this would necessarily result in a period between two due payments that is not exactly a month - possibly a little more than a month, and possibly a little less. The lender(s) who are matched to such a loan would then experience a "monthly" loan that is also not exactly a month. In addition, borrowers are also free to make extra payments or settle their outstanding balance in full at any time, which also results in funds being returned to the lenders who supplied it. The direct cause of these effects seems to me as RS having a 1:1 matching between borrowers and lenders in the monthly market (and borrowers necessarily have some variation in what "a month" means, due to weekend effects and the ability to choose a repayment day).
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Post by chielamangus on Aug 18, 2014 12:55:01 GMT
Chielamangus - Are you referring to the maturity date, for each of your monthly loans? Yes. The length of the loan is variable but no one will tell me why. It certainly states in the description that the loan is for one month, so that should mean a contract taken out on the nth of a given month matures on the nth of the following month. I haven't gone into how the interest differs between a 30 and 31 day month, or what difference the other loan lengths make. That must be the next step. These variable (and unknown) loan lengths could cause a problem if one has a substantial amount which is needed by a certain day, but come the day you find you can't have it. In any case, I don't see why RS should be able unilaterally to determine the loan length unless they explicitly state at the outset that they reserve the right to make the loan between 14 and 45 days (the current range of my contracts). On "monthly" loans, we are just pawns, not players in the market.
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Post by chielamangus on Aug 23, 2014 20:11:26 GMT
I see RS are seeking a loan at 2.1 per cent, a couple of points below the current lowest offer. Will someone be tempted even though it is late on Saturday night (and my bedtime)? Monopsonistic power at work. If it is taken they'll probably keep it for 6 weeks. I get more than 2.1% in a building society on proper monthly access.
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sl75
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Post by sl75 on Aug 23, 2014 23:15:31 GMT
I see RS are seeking a loan at 2.1 per cent, a couple of points below the current lowest offer. Will someone be tempted even though it is late on Saturday night (and my bedtime)? Monopsonistic power at work. If it is taken they'll probably keep it for 6 weeks. I get more than 2.1% in a building society on proper monthly access. Despite your assertions, as far as we know, RS don't set these rates, it is the borrowers seeking loans (and in particular the subset of these unwilling to immediately accept the very first rate they're offered) who set them, with RS merely providing the infrastructure allowing borrowers and lenders to interact via this marketplace. For the borrower interacting with the marketplace, the rates wouldn't be described on their screens as 2.1% and 2.3%, but as the APR that the borrower pays, including the effect not only of the interest but also of their personalised "credit rate" and fees. This would be substantially higher, and so asking for a rate 0.2% better might not seem unreasonable. (perhaps something like 5.5% vs 5.7% APR)
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