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Post by ruralres66 on Mar 17, 2020 19:29:49 GMT
My RYI needs you even more.....
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Post by ruralres66 on Mar 17, 2020 19:31:01 GMT
I don’t understand why there would be a run on RS withdrawals though. Panic and herd mentality
I'm glad you think that way. My RYI needs you.
but my RYI needs you even more....!
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Post by throwaway2501 on Mar 17, 2020 19:36:32 GMT
Good afternoon everyone. This afternoon we posted a RateSetter Notice update on processing investment releases, which is copied below for your reference. We will continue to keep you updated.
It is useful to have some numbers, £0.5M and £1.2M paid out in RYIs. There is movement -- good. But the glaring omission that would make these numbers truly useful is: how many £s-worth of requests are in the RYI queue?
This is really good question and I’ve been trying to get my head around it. We know that: - £862m under management - 85,267 investors on the platform - average investment size therefore ~£10k How many people do you think made an RYI last Monday (which was when the queuing started)? Let’s assume 1000 people logged on and did an RYI. Assuming they were “average” investors that would mean total RYI of £10m. Based on today’s announcement by RateSetter, and assuming they get up to £2m withdrawals a day, that would assume ~5 days to work through last Monday’s demand (from when they started clearing which sounds like today). If the withdrawal rate has remained constant - then it’ll be 5 days extra for every day after 9 March that the request was made. What do people think? Reasonable?
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Post by blueboy on Mar 17, 2020 19:57:51 GMT
So basically a liquidity problem. The high demand that RS mentioned previously isn’t for loans, it’s for withdrawals. Just a bit of clever wording. I don’t understand why there would be a run on RS withdrawals though. Panic and herd mentalityOr a rational fear that the biggest recession since WWII might just affect consumer loan repayments, added to a rapidly depleting PF? Only thing we can be certain of, is that nobody knows what is going to happen.
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Stonk
Stonking
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Post by Stonk on Mar 17, 2020 19:59:59 GMT
I have an errie feeling that this thread is about the go the way of "that thread" over on the Funding Circle board.
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Post by blueboy on Mar 17, 2020 20:18:59 GMT
Any p2p platform that undergoes a run on the money is going to be in a precarious position. It’s about the worst thing that can happen to it. Unfortunately, all we can do is hope for the panic to stop and a quick return to a semblance of normality.
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Post by blueboy on Mar 17, 2020 20:28:59 GMT
So basically a liquidity problem. The high demand that RS mentioned previously isn’t for loans, it’s for withdrawals. Just a bit of clever wording. I don’t understand why there would be a run on RS withdrawals though. Panic and herd mentality wanting cash to hunt opportunities in S&S. This is what I was hoping to do, wanted to add to one of my ETF’s. I was naively surprised that there was a run on RS.
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Stonk
Stonking
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Post by Stonk on Mar 17, 2020 20:30:33 GMT
Any p2p platform that undergoes a run on the money is going to be in a precarious position. It’s about the worst thing that can happen to it. Unfortunately, all we can do is hope for the panic to stop and a quick return to a semblance of normality.
This is not true. Most P2P platforms including RS have never guaranteed to repay investors who want to get out early, and they have simple mechanisms to prevent a run. This is totally different to banks, which can be brought down by runs, because savers have a right to money on deposit.
RS would be perfectly within its rights to remove the RYI feature (permanently if need be), cancel all existing RYI requests, and tell everyone that they are locked in for the natural life of their underlying loans. Then they could return to their business of providing loans to borrowers, which they have currently stopped doing.
EDIT: And I'll bet you half the payout of my outstanding RYI that this option has already been discussed by RS management.
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Post by blueboy on Mar 17, 2020 20:45:15 GMT
Any p2p platform that undergoes a run on the money is going to be in a precarious position. It’s about the worst thing that can happen to it. Unfortunately, all we can do is hope for the panic to stop and a quick return to a semblance of normality.
This is not true. Most P2P platforms including RS have never guaranteed to repay investors who want to get out early, and they have simple mechanisms to prevent a run. This is totally different to banks, which can be brought down by runs, because savers have a right to money on deposit.
RS would be perfectly within its rights to remove the RYI feature (permanently if need be), cancel all existing RYI requests, and tell everyone that they are locked in for the natural life of their underlying loans. Then they could return to their business of providing loans to borrowers, which they have currently stopped doing.
EDIT: And I'll bet you half the payout of my outstanding RYI that this option has already been discussed by RS management.
It don’t agree with that at all. Unlike a bank which creates money out of thin air when it creates a loan. RS, not holding a banking license is unable to do this. It’s a myth to think that any deposit you put into a bank account is used by the bank for loans. Once you make a deposit it’s legally theirs to do with as they please, however they do have to retain a % of the deposit. but I do agree that they are entitled to lock In the loans and this maybe the next logical step
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alanh
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Post by alanh on Mar 18, 2020 10:49:23 GMT
I've cancelled my RYI request. I was hoping to see the rates drift up in this environment and be able to reinvest at much higher rates. That doesn't seem likely as RS seem to be managing the demand side of the equation thereby keeping rates at the GR, so it seems pointless releasing an investment earning around 6% to then have nowhere to put it. At the same time, RS must be making a decent amount of money through all this as they are effectively taking an RYI queue which will on average have rates much higher than where they are now and recycling all of these into loans paying 3-4%. They will also be taking in early release fees.
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Post by p2plender on Mar 18, 2020 11:38:11 GMT
Similar here. Where would put cash if withdrew? Stockmarket that's losing about 5% a day!
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r00lish67
Member of DD Central
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Post by r00lish67 on Mar 18, 2020 11:44:26 GMT
Similar here. Where would put cash if withdrew? Stockmarket that's losing about 5% a day! er, Yes?
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Post by throwaway2501 on Mar 18, 2020 11:50:32 GMT
Quick update: Just spoke to RateSetter. Latest guidance is still "a bit more than a week" for RYIs. "Less than two weeks" was even mentioned but obviously caveated heavily on it depending on market liquidity.
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Post by cmundo on Mar 18, 2020 12:26:20 GMT
I've cancelled my RYI request. I was hoping to see the rates drift up in this environment and be able to reinvest at much higher rates. That doesn't seem likely as RS seem to be managing the demand side of the equation thereby keeping rates at the GR, so it seems pointless releasing an investment earning around 6% to then have nowhere to put it. At the same time, RS must be making a decent amount of money through all this as they are effectively taking an RYI queue which will on average have rates much higher than where they are now and recycling all of these into loans paying 3-4%. They will also be taking in early release fees. How do you cancel a RYI request. I thought that once you had confirmed the request you couldn't cancel it?!
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alanh
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Post by alanh on Mar 18, 2020 12:40:28 GMT
I've cancelled my RYI request. I was hoping to see the rates drift up in this environment and be able to reinvest at much higher rates. That doesn't seem likely as RS seem to be managing the demand side of the equation thereby keeping rates at the GR, so it seems pointless releasing an investment earning around 6% to then have nowhere to put it. At the same time, RS must be making a decent amount of money through all this as they are effectively taking an RYI queue which will on average have rates much higher than where they are now and recycling all of these into loans paying 3-4%. They will also be taking in early release fees. How do you cancel a RYI request. I thought that once you had confirmed the request you couldn't cancel it?! You just email them - see yesterdays notice "update on release investment processing"
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