walktall7
Member of DD Central
Posts: 181
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Post by walktall7 on Jul 24, 2018 10:40:15 GMT
Also the rates on SM have dropped in that a loan which was being sold with a 1% premium is now being sold with a 2% premium
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Post by tomas on Jul 24, 2018 10:56:11 GMT
It is quite risky to buy with such a high premium as some of loan originators could at any moment take lessons from Mogo and make a buyback to list later with a lower rate.
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Post by patright on Jul 25, 2018 5:49:06 GMT
let's face it, a storm is coming in the financial world, all of those P2P investment in which I am also heavily involved will crash..all the individuals borrowing at those rate will be the first one to go down when the market turn..and it will turn as it always does. The riskier one now based on current prices is the real estate type of P2P which should probably be exited asap, as a matter of fact auto loans is also pretty risky I won't even go into the quick loan that most people use to buy even groceries these days.. I am reducing my position personally and while no expert etc...not a financial advisor but look at the data yourself and make your own mind Sure, it may come at some point, we don't know when and how. Doom & gloomers have been saying that a crash bigger than the previous one is coming since like 2014 or something. Sure, if you repeat the same thing over and over again each year, you will be correct once. Its like a stalled clock - its correct twice a day... The current drop in interest rates has nothing to do with actual problems or a crisis. Its just a simple issue of supply and demand of money. Mogo issued a big bond repurchasing their loans, lots of free money - it hasto go somewhere, so every other decent loan got bought up. Other loan originators see this and they lower their interest as well, because why not if the supply of higher interest loans is not there and there are a lot of uninvested money lying around. We have seen dips before (not so sudden and big though), my guess is it will go up eventually in the next months. The only problem I see and a thing I don't like is that the investments are less attractive. You might think lower interest rate means safer loans, right? It usually is like that, but not in this situation. The loans are the same, the companies are the same, the clients are the same with weak income and high risk of defaults. The loan originators are cashing in their extra profit because what we see on mintos has no influence on the real loans given out to people. Those interest rates are the same, loan originators are just getting their source of money cheaper. Loan originators are profiting more than before on this rate dip, we are just the losers. What I mean by my last sentence is: loan originator gets 100 eur from investors @ 14% and will pay back 114 eur in a year. He than loans the 100 eur to a client with 70% interest rate and gets back 170 eur. So thats 56 of eur to cover administrative costs, defaults and profit. So when they lower the interest rates on mintos, to lets say 9%, it means they now have 61 eur to cover those expenses compared to 56 before. Well that's the thing..QE is already over in the US, in fact it's now QT (tightening) QE will be over in Europe by the end of the year, at least it's the ECB's plan...when cheap money goes away, more and more people will struggle with mortgage, credit card debts, auto loans and so on and they are at a variable rate and take a look if you want as well at the yield curve in the US, it's likely to invert (2years vs 10, which often means a crisis But then again of course I could be all wrong but I am staying alert is all
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fric
Member of DD Central
Posts: 199
Likes: 79
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Post by fric on Jul 25, 2018 6:00:42 GMT
Ofc, we should stay alert, that's what got people in trouble in 2008 - people thought this party is not going to end. Sure, a crisis may come, but the question is - is it a year from now, 2 years, 5 years etc. No one can precisely predict a crash, a bottom of the crisis etc. You might sell everything now and than bite your fingers seeing that there is no crisis in the coming years, but you might sell everything and get lucky because after half a year or a year there could be serious problems.
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Post by patright on Jul 25, 2018 6:03:38 GMT
Ofc, we should stay alert, that's what got people in trouble in 2008 - people thought this party is not going to end. Sure, a crisis may come, but the question is - is it a year from now, 2 years, 5 years etc. No one can precisely predict a crash, a bottom of the crisis etc. You might sell everything now and than bite your fingers seeing that there is no crisis in the coming years, but you might sell everything and get lucky because after half a year or a year there could be serious problems. Well real estate level in the US have exceeded the high of 2008 I am seeing red signals all over but indeed I am not a prophet nor a financial advisor or anything when the news hit the Mass Media, it's already too late, for now indeed on the surface it all looks good. we shall see
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fric
Member of DD Central
Posts: 199
Likes: 79
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Post by fric on Jul 25, 2018 7:36:21 GMT
Well, your investments should be balanced in a way, where you don't get slaughtered in a financial crisis. As for stocks, ETFs etc it has been noted time and time again that even professional traders, hedge funds etc cannot predict bottoms, crisis well enough to make more money than people invested in indexes and who don't panic sell or when they feel its gonna crash.
As for mintos and non-bank lenders - its a high risk investment, in a 2008 style crisis I wouldn't be surprised if loan originators would start to go bust left and right and we might end up loosing more % of our investment than compared to stock market loses.
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Post by nellerdk on Jul 25, 2018 20:36:02 GMT
I won't be investing anywhere at less than 12%. Why? Just curious. The alternatives are: - an overvalued stock market - shitty bonds with no yield - 1% on a bank account
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Post by nellerdk on Jul 25, 2018 20:36:53 GMT
Ofc, we should stay alert, that's what got people in trouble in 2008 - people thought this party is not going to end. Sure, a crisis may come, but the question is - is it a year from now, 2 years, 5 years etc. No one can precisely predict a crash, a bottom of the crisis etc. You might sell everything now and than bite your fingers seeing that there is no crisis in the coming years, but you might sell everything and get lucky because after half a year or a year there could be serious problems. Well real estate level in the US have exceeded the high of 2008 I am seeing red signals all over but indeed I am not a prophet nor a financial advisor or anything when the news hit the Mass Media, it's already too late, for now indeed on the surface it all looks good. we shall see what do you mean by real estate level? Are you talking about leveraged real estate funds and such investments?
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Post by patright on Jul 26, 2018 4:46:57 GMT
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Post by rimvydukas on Jul 26, 2018 12:20:23 GMT
It seems that interest rates for short term loans are seen at 9.5-9.8 Good news each day :/
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Post by geldregiertdiewelt on Jul 27, 2018 8:35:51 GMT
I won't be investing anywhere at less than 12%. Why? Just curious. The alternatives are: - an overvalued stock market - shitty bonds with no yield - 1% on a bank account
Old investor wisdom: Don't only care about the return ON the money, also care about the return OF the money.
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Post by patright on Jul 27, 2018 8:52:45 GMT
Why? Just curious. The alternatives are: - an overvalued stock market - shitty bonds with no yield - 1% on a bank account
Old investor wisdom: Don't only care about the return ON the money, also care about the return OF the money. exactly right
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Post by patright on Jul 31, 2018 6:04:56 GMT
However, returns are getting very low, indeed we are near 8/9% now considering the risk, it's too low in my mind Mintos will go down the way Twino did in the eyes of investors at those rates I think
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Post by amoult on Jul 31, 2018 6:24:00 GMT
However, returns are getting very low, indeed we are near 8/9% now considering the risk, it's too low in my mind Mintos will go down the way Twino did in the eyes of investors at those rates I think What do you mean 'go down'? Twino seems to be on growing path on how much they issue new loans (based on www.p2p-banking.com statistics). So there must be plenty of investors and money around. It's supply and demand. If loan originators attract enough money with lower rates then why would they offer any better? Sure there is always a active group of people who follows different platforms and pulls out money if there is a better opportunity elsewhere. But majority just doesn't seem to care.
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Post by patright on Jul 31, 2018 7:42:56 GMT
However, returns are getting very low, indeed we are near 8/9% now considering the risk, it's too low in my mind Mintos will go down the way Twino did in the eyes of investors at those rates I think What do you mean 'go down'? Twino seems to be on growing path on how much they issue new loans (based on www.p2p-banking.com statistics). So there must be plenty of investors and money around. It's supply and demand. If loan originators attract enough money with lower rates then why would they offer any better? Sure there is always a active group of people who follows different platforms and pulls out money if there is a better opportunity elsewhere. But majority just doesn't seem to care. you're absolutely right, I meant in the eyes of the savy people in this forum, not to the general public but I failed to be precise
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