smezz
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Post by smezz on Mar 18, 2019 20:31:31 GMT
'Passive' money now going in at 4.9%!
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Post by propman on Mar 19, 2019 15:17:12 GMT
I believe that the MR is actually rounded down (in the past from days when I have watched closely, seen a small amount below MR and little above, the rate always goes down even 'though most money is at the previous MR). If this is continued with the longer timescale, it will take a lot for the 28 day average to go up as most week days the majority is lent at MR and the amount lent at weekends is small. In contrast, if over the 28 days the amount lent below MR exceeds that above, the rate will drop 0.1%. This should remain for most of the 28 days before the new MR will take little to lower it. It is only staying up because most days there is a spike before the next MR money that more than offsets the "Lend it now" money placed below MR. It will be "interesting" what happens in the next few days. The late Monday run left more MR money than was required yesterday. If the MR money builds up then the rate will drop.
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aju
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Post by aju on Mar 20, 2019 11:08:45 GMT
Market rates seem to have almost flat-lined, with rolling @ 3.2% for the last 8 days. I guess the new 28 day average is in play now, what does everyone think? Seems to have started early as you say got stuck on 6.1, mind you i am still getting quite a bit better than that rate!
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Post by propman on Jun 12, 2019 17:22:02 GMT
More tactics to impact lending rates. Just had a further confirmation when setting own rate, Said something like "no offers at that rate and so your funds will not be lent. You can select no and lower your rates for quicker lending". How long has that come up?
- PM
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Post by Badly Drawn Stickman on Jun 12, 2019 17:30:53 GMT
More tactics to impact lending rates. Just had a further confirmation when setting own rate, Said something like "no offers at that rate and so your funds will not be lent. You can select no and lower your rates for quicker lending". How long has that come up?
- PM
I think that has always been present, I take it more as telling me something I already know as opposed to an Orwellian mind control tactic.
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travolta
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Post by travolta on Jun 12, 2019 19:45:16 GMT
5.6 on 5yr mkt now
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Greenwood2
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Post by Greenwood2 on Jun 12, 2019 19:56:08 GMT
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Post by Ace on Jun 12, 2019 21:16:51 GMT
I can't get excited at 5.6%. - AC 90 day 5.75%
- GS 1 yr 5.8%
- LW 5 yr 6.5%
- CP ~1 yr 8%
- UB 6 month 8.4%
Ok, they aren't all directly comparable due to different borrower types, but all are available in IFISA wrappers if required, and most have PFs. All are much less hassle than rate chasing on RS. So, why might I consider staying with RS? Or is the rate chasing that gives more satisfaction than the, easier to obtain, higher rates elsewhere? Just wondering why RS is so popular.
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IFISAcava
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Post by IFISAcava on Jun 12, 2019 23:28:14 GMT
I can't get excited at 5.6%. - AC 90 day 5.75%
- GS 1 yr 5.8%
- LW 5 yr 6.5%
- CP ~1 yr 8%
- UB 6 month 8.4%
Ok, they aren't all directly comparable due to different borrower types, but all are available in IFISA wrappers if required, and most have PFs. All are much less hassle than rate chasing on RS. So, why might I consider staying with RS? Or is the rate chasing that gives more satisfaction than the, easier to obtain, higher rates elsewhere? Just wondering why RS is so popular. Platform diversification Track record Size Most people have built up composite rates of 6%+ Easier early access (albeit at a cost) than AC and GS, and early access full stop unlike CP and UB. Lots of downsides too, but you asked for the positive reasons! EDIT: Disclosure - I am in all of them
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scc
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Post by scc on Jun 13, 2019 3:48:25 GMT
I'll add brand awareness. I suspect RS is a gateway drug into P2P for many. From some of the comments here, it's clear that a few people treat it like a savings account (probably because it looks a bit like one and hasn't lost anyone's money yet). But it's not really been tested yet either.
The 1 year market reached my threshold yesterday. The 5 year hasn't been close for a while.
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smezz
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Post by smezz on Jun 13, 2019 6:31:43 GMT
Looks much more promising.
Money on 5 year to lend queue at £3.7M compared to £7M + a month or so ago.
6% in a month???
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r00lish67
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Post by r00lish67 on Jun 13, 2019 6:54:31 GMT
I find it mildly frustrating that value discussions, which is really what we're talking about here, with Ratesetter et al so often revolve around the variation of a few decimal places in the rates offered, (e.g. 6% = 'good', 5.5% = 'bad') and little else. We all acknowledge here that P2P is much more risky than cash savings and I know we're not all statisticians, myself included, but there seems to be little published effort to then quantify the risk in any meaningful way for the 'guaranteed' rate platforms. A large part of this I suspect is just because they've all, so far, honoured the rates people have signed up for. Could it not be that a 6.0% rate today on RS is actually better value than a 6.5% rate 6 months ago if, hypothetically, the PF was stocked with way more cash and less risky at this moment in time? But we don't hear anyone say this sort of thing, and I think we should. FWIW, my abbreviated current view on the main 2: - Ratesetter is poor value at the moment as rates are lower than previously available prior to new ISA year, whilst PF cash as a % of loans outstanding has dropped by a full 10% in the last couple of months. The Interest Coverage Ratio has nominally increased last month, but this is because RS revised their future outflow figure (rather than performance improving). Unless that trend reverses, I would probably only consider investing at 7% (not going to happen for a while, I know!). - LendingWorks concern me more than RS at the moment. As described at greater length recently, their average borrower APR has increased by nearly 50% in a couple of years whilst their supposed future loss rates have decreased by 25%. Meanwhile, their 2016/2017 cohorts are performing far worse than anticipated. I like them as a company, I like their rep here, but I'm not currently re-investing and am considering selling out if things don't improve. This view is unfortunate for me, as I have cash I'd really rather like to deploy in both! If someone can change my mind, I'd be very glad to hear their views. Note, I am not saying I am right and others are wrong about the merits/demerits of either platform's attractiveness/stability, what I am saying is that I'm hearing very little discussion about it, and I'm sure people would have some interesting views if they took the time to look under the bonnet (or share their views if they already do). Other interesting related areas would include informed speculation as to what the downside costs would be of each platform hitting the buffers (e.g. some may take the view that the haircut would be minimal in the worst scenario, others may come up with some sort of domino doom effect, each with their own consequences for how much you're prepared to risk). I am also not saying that I don't want to hear about high rates when they crop up - don't get me wrong, very useful to know! PS: smezz that wasn't aimed at you in particular, I just happened to pick the same 6% good rate as you and our posts crossed
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ceejay
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Post by ceejay on Jun 13, 2019 9:00:26 GMT
... Could it not be that a 6.0% rate today on RS is actually better value than a 6.5% rate 6 months ago if, hypothetically, the PF was stocked with way more cash and less risky at this moment in time? But we don't hear anyone say this sort of thing, and I think we should. ... I think that the idea of having a properly risk-weighted discussion on the value of each platform is great - but I seriously doubt the practicality of such a thing, given the lack of an objective basis for it. I know that various posters do make brave efforts from time to time to shine a light into the size of PFs and other such matters, but I've not seen anything to suggest that a meaningful calculation can be made as a result. For now I am relying heavily on my gut, which isn't always a comfortable position to be in!
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r00lish67
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Post by r00lish67 on Jun 13, 2019 10:32:29 GMT
... Could it not be that a 6.0% rate today on RS is actually better value than a 6.5% rate 6 months ago if, hypothetically, the PF was stocked with way more cash and less risky at this moment in time? But we don't hear anyone say this sort of thing, and I think we should. ... I think that the idea of having a properly risk-weighted discussion on the value of each platform is great - but I seriously doubt the practicality of such a thing, given the lack of an objective basis for it. I know that various posters do make brave efforts from time to time to shine a light into the size of PFs and other such matters, but I've not seen anything to suggest that a meaningful calculation can be made as a result. For now I am relying heavily on my gut, which isn't always a comfortable position to be in! Well, although they're far from perfect, I'd say that the objective basis that we do have is the statistics that are published by the platforms. As in the example I gave above, it only takes a little analysis to understand why RS's ICR has increased this month from 112% to 115%, and doing so reveals (IMV) that it's not necessarily because the loan book is doing any better. In my mind that's pretty meaningful, if not ever entirely conclusive or uncontroversial and by no means a crystal ball in which we can all gallop off together to safety at a certain point. What it might be though is slightly influential as a part of someone's decision-making process as to whether to stay steady, go 'large', or run down investments when perhaps they might otherwise have let their gut mislead them by some headline statistics.
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Post by propman on Jun 13, 2019 10:35:13 GMT
I find it mildly frustrating that value discussions, which is really what we're talking about here, with Ratesetter et al so often revolve around the variation of a few decimal places in the rates offered, (e.g. 6% = 'good', 5.5% = 'bad') and little else. We all acknowledge here that P2P is much more risky than cash savings and I know we're not all statisticians, myself included, but there seems to be little published effort to then quantify the risk in any meaningful way for the 'guaranteed' rate platforms. A large part of this I suspect is just because they've all, so far, honoured the rates people have signed up for. Could it not be that a 6.0% rate today on RS is actually better value than a 6.5% rate 6 months ago if, hypothetically, the PF was stocked with way more cash and less risky at this moment in time? But we don't hear anyone say this sort of thing, and I think we should. FWIW, my abbreviated current view on the main 2: - Ratesetter is poor value at the moment as rates are lower than previously available prior to new ISA year, whilst PF cash as a % of loans outstanding has dropped by a full 10% in the last couple of months. The Interest Coverage Ratio has nominally increased last month, but this is because RS revised their future outflow figure (rather than performance improving). Unless that trend reverses, I would probably only consider investing at 7% (not going to happen for a while, I know!). - LendingWorks concern me more than RS at the moment. As described at greater length recently, their average borrower APR has increased by nearly 50% in a couple of years whilst their supposed future loss rates have decreased by 25%. Meanwhile, their 2016/2017 cohorts are performing far worse than anticipated. I like them as a company, I like their rep here, but I'm not currently re-investing and am considering selling out if things don't improve. Note, I am not saying I am right and others are wrong about the merits/demerits of either platform's attractiveness/stability, what I am saying is that I'm hearing very little discussion about it, and I'm sure people would have some interesting views if they took the time to look under the bonnet (or share their views if they already do). Other interesting related areas would include informed speculation as to what the downside costs would be of each platform hitting the buffers (e.g. some may take the view that the haircut would be minimal in the worst scenario, others may come up with some sort of domino doom effect, each with their own consequences for how much you're prepared to risk). Personally I try and be objective on risk and set minimum risk margins for each site.
FWIW last year I reluctantly lent a small amount at 5% for 5 years and 4% for 1 year at the bottom of the market. This year I am 0.5% higher on both and have limited the amount within 0.5% of these levels. Decreasing "cash" and the possibility that some of this is in a fund not open for withdrawals is part of the story. However the reduced amount of expected future contributions also concerns me. This time last year the expected defaults on that year's loans were similar to the expected future contributions from those loans. The amount now is not even disclosed, but was less than 50% when they stopped doing so. So more of the fund was being taken up front and this was still going out faster than it was coming in. the delay in rpoviding PF statistics also makes me nervous. the only reason i am prepared to lend at the current rates, is that while I believe losses are likely and a haircut almost certain within 3 years. but I believe that the amounts will be less than losses on other risk assets and I am likely to require a significant portion of these funds over the next 5-10 years, insufficient to be sure that the possibly material losses on other investment classes would be recovered.
Re LW, I do invest there, but believe it is significantly higher risk. I think a 1% premium over RS is required, but will probably continue to put a fraction of my reinvestment there for diversity so long as a premium of >0.5% remains.
However, this is trying to put apparent science on what are largely gut estimates. I too think too many look at the gross rate and not a risk adjusted rate. I think there will be significant flight on even a modest haircut based on the visceral responses seen from Zopa investors when receiving their first losses Pre Safeguard even 'though losses were more clearly flagged there. The biggest risk I see is how the platforms respond to the need for haircuts. If they do not ring fence past losses to past investments then it may be impossible to maintain lending and the platforms are likely to cease trading. My final concern with RS in particular is their history of changing lending types and informing lenders after the event. I worry about the increase in real estate lending. Anyone who has read my posts knows that I do not believe secured lending necessarily reduces risk, particularly for Developers, a sector I know well.
Interested in how others read it...
- PM
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