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Post by throwaway2501 on Mar 16, 2020 23:45:17 GMT
You are a pretty gloomy guy!
Yes, I am. I don't want to be. Please fault my logic. Please. I desperately want you to.
A few reasons to be more optimistic: - Current government estimates are for 12 weeks of material disruption. That’s not long enough to create a sustained decrease in productive capacity of the economy. People are therefore not laid off and few businesses are forced to close even if there is some disruption in the short term. - Short term disruption to businesses is however likely to be smoothed by fiscal measures announced by the government (with potentially more to come) and monetary policy (an increase in the Bank of England’s lending facility) - Economists/analysts are expecting a hard bounce when the short term pain is over. This will make up for much of lost business earnings and all borrowers to meet repayment obligations in the longer term. - A good portion of RateSetter’s loan book is secured so a default does not always result in a material loss. - The provision fund is still able to cover 250% of expected losses.
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IFISAcava
Member of DD Central
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Post by IFISAcava on Mar 16, 2020 23:48:10 GMT
Yes, I am. I don't want to be. Please fault my logic. Please. I desperately want you to.
A few reasons to be more optimistic: - Current government estimates are for 12 weeks of material disruption. That’s not long enough to create a sustained decrease in productive capacity of the economy. People are therefore not laid enough and few businesses are forced to close even if there is some disruption in the short term. - Short term disruption to businesses is however likely to be smoothed by fiscal measures announced by the government (with potentially more to come) and monetary policy (an increase in the Bank of England’s lending facility) - Economists/analysts are expecting a hard bounce when the short term pain is over. This will make up for much of lost business earnings and all borrowers to meet repayment obligations in the longer term. - A good portion of RateSetter’s loan book is secured so a default does not always result in a material loss. - The provision fund is still able to cover 250% of expected losses. Except it won't be 12 weeks.
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Stonk
Stonking
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Post by Stonk on Mar 17, 2020 0:15:28 GMT
Yes, I am. I don't want to be. Please fault my logic. Please. I desperately want you to.
A few reasons to be more optimistic: - Current government estimates are for 12 weeks of material disruption. That’s not long enough to create a sustained decrease in productive capacity of the economy. People are therefore not laid off and few businesses are forced to close even if there is some disruption in the short term. - Short term disruption to businesses is however likely to be smoothed by fiscal measures announced by the government (with potentially more to come) and monetary policy (an increase in the Bank of England’s lending facility) - Economists/analysts are expecting a hard bounce when the short term pain is over. This will make up for much of lost business earnings and all borrowers to meet repayment obligations in the longer term. - A good portion of RateSetter’s loan book is secured so a default does not always result in a material loss. - The provision fund is still able to cover 250% of expected losses.
I could make pithy retorts to each point, but you'd probably call me gloomy again!
I'm glad that some people are optimistic. It gives me hope that my RYI will be processed. And if that translates into a 10% loan for you, then we're both happier.
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Post by ruralres66 on Mar 17, 2020 4:15:21 GMT
I see things, the extra risk right now is astronomical.......
We have entire industries verging on going bust. Airlines, trains, cinemas, to name a few. All running, like so many busineses, on a knife-edge of massive outgoings and debts finely balanced against slightly-larger incomings......
I agree and have just actioned a substantive draw down.
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scc
Member of DD Central
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Post by scc on Mar 17, 2020 7:48:27 GMT
Yes, I am. I don't want to be. Please fault my logic. Please. I desperately want you to.
A few reasons to be more optimistic: - Current government estimates are for 12 weeks of material disruption. That’s not long enough to create a sustained decrease in productive capacity of the economy. People are therefore not laid off and few businesses are forced to close even if there is some disruption in the short term. - Short term disruption to businesses is however likely to be smoothed by fiscal measures announced by the government (with potentially more to come) and monetary policy (an increase in the Bank of England’s lending facility) - Economists/analysts are expecting a hard bounce when the short term pain is over. This will make up for much of lost business earnings and all borrowers to meet repayment obligations in the longer term. - A good portion of RateSetter’s loan book is secured so a default does not always result in a material loss. - The provision fund is still able to cover 250% of expected losses. I wish I could feel as optimistic. It won't be anything like 12 weeks especially if you consider the virus rolling across the world and possible second waves. Most of the affected businesses I know of could just about manage the next payroll under current conditions. It's clear to me that the Govt has given almost no thought (yet) to how the ordinary person in the street will make mortgage payments, pay off credit card, even buy food. And the average person in the street has almost no buffer. I can see many false dawns as companies attempt to return to business as usual only for them to be exposed to another set of cases/wave and close down again. Restarting the global economy is going to be like restarting a country's electricity supply when all of the power stations have gone down.
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Post by Deleted on Mar 17, 2020 11:32:50 GMT
6% available in 1 year market for anyone interested.
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Mar 17, 2020 13:05:18 GMT
6% available in 1 year market for anyone interested. I won't lend at less than 10% at the moment. Well, maybe 9.9% at a push
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Stonk
Stonking
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Post by Stonk on Mar 17, 2020 23:21:00 GMT
All these high percentages sound great, if they work out.
I hope you have thought it through. As I see things, the extra risk right now is astronomical.
We have entire industries verging on going bust. Airlines, trains, cinemas, to name a few. All running, like so many busineses, on a knife-edge of massive outgoings and debts finely balanced against slightly-larger incomings. Take away 10% of their incomings, and they issue dire profit warnings, fall into heavy losses, shed thousands of jobs. Now, instead, take away 90% of their incomings: what's going to happen?
The same goes for a lot of small business, heavily indebted and/or with huge fixed costs like rent and business rates.
All these industries and businesses employ people. A surprising number of those people also live on a similar knife-edge. A decent enough salary, but with only a couple of £K in the bank and maybe £100 spare at the end of each month. If they lose their job, or go onto statutory sick pay at £94 a week, they're stuffed. Who are they going to choose not to pay? The landlord? The mortgage lender? The Sky Sports subscription? That unsecured loan from that purple website for the new car they couldn't really afford?
I feel I should update my position. Yesterday, my perception was that the risk of investing with RS was astronomical.
The Government's wide-ranging package of measures announced today has, in my opinion, reduced the risk to some extent. It is certainly not back to normal, because the measures will not reach every corner of the economy. But the size and scope of the measures shows a real willingness to do whatever is necessary.
Yesterday I would not have lent through RS at 10%, nor 100%, nor 1,000% ... not even at Wonga%.
Today I would still not lend at 10%. But I would at Wonga%. Somewhere between those two figures is my critical point, and I honestly don't know where it is.
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Post by throwaway2501 on Mar 18, 2020 0:46:31 GMT
All these high percentages sound great, if they work out.
I hope you have thought it through. As I see things, the extra risk right now is astronomical.
We have entire industries verging on going bust. Airlines, trains, cinemas, to name a few. All running, like so many busineses, on a knife-edge of massive outgoings and debts finely balanced against slightly-larger incomings. Take away 10% of their incomings, and they issue dire profit warnings, fall into heavy losses, shed thousands of jobs. Now, instead, take away 90% of their incomings: what's going to happen?
The same goes for a lot of small business, heavily indebted and/or with huge fixed costs like rent and business rates.
All these industries and businesses employ people. A surprising number of those people also live on a similar knife-edge. A decent enough salary, but with only a couple of £K in the bank and maybe £100 spare at the end of each month. If they lose their job, or go onto statutory sick pay at £94 a week, they're stuffed. Who are they going to choose not to pay? The landlord? The mortgage lender? The Sky Sports subscription? That unsecured loan from that purple website for the new car they couldn't really afford?
I feel I should update my position. Yesterday, my perception was that the risk of investing with RS was astronomical.
The Government's wide-ranging package of measures announced today has, in my opinion, reduced the risk to some extent. It is certainly not back to normal, because the measures will not reach every corner of the economy. But the size and scope of the measures shows a real willingness to do whatever is necessary.
Yesterday I would not have lent through RS at 10%, nor 100%, nor 1,000% ... not even at Wonga%.
Today I would still not lend at 10%. But I would at Wonga%. Somewhere between those two figures is my critical point, and I honestly don't know where it is.
Finally some positivity!
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ceejay
Posts: 971
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Post by ceejay on Mar 18, 2020 9:02:30 GMT
...
We have entire industries verging on going bust. Airlines, trains, cinemas, to name a few. All running, like so many busineses, on a knife-edge of massive outgoings and debts finely balanced against slightly-larger incomings. Take away 10% of their incomings, and they issue dire profit warnings, fall into heavy losses, shed thousands of jobs. Now, instead, take away 90% of their incomings: what's going to happen?
...
I feel I should update my position. Yesterday, my perception was that the risk of investing with RS was astronomical.
The Government's wide-ranging package of measures announced today has, in my opinion, reduced the risk to some extent. It is certainly not back to normal, because the measures will not reach every corner of the economy. But the size and scope of the measures shows a real willingness to do whatever is necessary.
Yesterday I would not have lent through RS at 10%, nor 100%, nor 1,000% ... not even at Wonga%.
Today I would still not lend at 10%. But I would at Wonga%. Somewhere between those two figures is my critical point, and I honestly don't know where it is.
I am wondering whether the Government package might have an entirely different effect. If businesses can borrow money on reasonable terms from the Government, why would they need to go to P2P? If there is a glut of funds out there, it is possible that substantial chunks of current P2P borrowing gets paid back. Result - platforms loan books run down, no-one wants new loans, we get returned (most of) our money and P2P disappears into a historical footnote...
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Post by ruralres66 on Mar 19, 2020 8:19:25 GMT
"Government-backed Start Up Loan
The Start Up Loans Company provides government-backed unsecured loans to people who are starting or growing a business. Technically, these are personal loans, granted for business purposes. Successful applicants also receive 12 months of business mentoring.
Loan amount: £500 - £25,000
Interest rate: Fixed rate of 6 per cent a year.
Loan term: One to five years.
Fees: No application fee and no early repayment fee."
It might be a good idea to do a comparison check now things are fast changing in the economy and the world of loans?
Is anyone tracking what the Governments new offers amount to in interest and related charges to borrowers?
Surely, a struggling business in the current climate is hardly going to pay the level of interest fees which are required by RS?
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Post by Deleted on Mar 19, 2020 16:38:02 GMT
I see RS as one of the better platforms to survive this cataclysmic event, along with LW and possibly Z. FC being the worst placed imo. There is ALWAYS some grounds for optimism, history shows us this does it not? Wait for the infection rates to flatten and a vaccine to appear...things will improve. Always darkest before dawn. Hold your nerve.
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aju
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Post by aju on Mar 23, 2020 19:16:51 GMT
Seems that high rates are chipping away again in the 1Y, I got some in @ 6% which is at 44k at the moment. There been a bit of activity earlier to bring this down a bit.
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ceejay
Posts: 971
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Post by ceejay on Apr 3, 2020 14:15:52 GMT
I know that the RYI queue is long (see other thread!) but what about 1Y loans coming to their natural ends - has anyone seen any of these lately?
What does the panel think are the prospects of these loans ending normally?
There does seem to be a general mood that any kind of loan/mortgage repayment is now optional, and for some (many?) borrowers I'm sure that's right. OTOH, some borrowers will be less affected by current events and might be happy just to settle up in the normal way.
I don't have any 1Y loans imminently ending - have you?
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r00lish67
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Post by r00lish67 on Apr 3, 2020 14:51:35 GMT
I know that the RYI queue is long (see other thread!) but what about 1Y loans coming to their natural ends - has anyone seen any of these lately? What does the panel think are the prospects of these loans ending normally? There does seem to be a general mood that any kind of loan/mortgage repayment is now optional, and for some (many?) borrowers I'm sure that's right. OTOH, some borrowers will be less affected by current events and might be happy just to settle up in the normal way. I don't have any 1Y loans imminently ending - have you? Nothing left myself, but as of right now I would fully expect naturally finishing loans to close as normal whatever the market. RS are still currently paying out all owed interest, and if your borrower does default then the PF will pick up the rest. This will apply until/unless RS declare any change in policy.
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