robski
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Post by robski on Jul 28, 2020 13:35:12 GMT
Something I hadn't considered before, maybe others have but then I missed it.
If as per reasonable extrapolation and RS management comments they are lending approx 50% of the incoming capital and sending 50% to RYI.
From what I can tell the 50% lending is all new markets, I cannot think of a time I have seen anything in the 5 year. As I lost access to 1 year its possible there is still lending there but I havent seen anyone posting about rate spikes as often happen in 1 year due to being big value loans which caused the spikes.
So assuming the lending is all/mainly access thats going to significantly affect the amount for repayment in that market.
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robski
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Post by robski on Jul 28, 2020 13:42:22 GMT
based on ? releasing 75 million pounds + not losing a penny of capital? what suggestion do you have? Decreasing returns on RYI, allowing no new investors, etc. No new investors I believe is a defence thing. Either enforced by the FCA or at RS own direction. I believe this will be in force until either there is demonstratably a better funded PF thats clearly in a good position, or the worst happens and RS goes into administration and hence cannot allow reinvestment. I believe there is a real risk of a misselling type issue right now should they be allowing new investors. Th eonly option I could see to avoid this would be new products with eitehr their own provision mechanism, or no mechanism at all. RS dont want to screw their own business model going forwards because some people didnt or couldnt understand what they were investing in, or choose to ignore the issues. Decreasing returns on RYI is completely predictable, not just that as the amount lent out is reducing then the incoming cash will be reducing, but even the sleepiest investors who took maybe 3 months to decide to withdraw will tilt the balance slowly further into active/passive withdrawl vs reinvestment.
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chris1200
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Post by chris1200 on Jul 28, 2020 13:47:48 GMT
Something I hadn't considered before, maybe others have but then I missed it. If as per reasonable extrapolation and RS management comments they are lending approx 50% of the incoming capital and sending 50% to RYI. From what I can tell the 50% lending is all new markets, I cannot think of a time I have seen anything in the 5 year. As I lost access to 1 year its possible there is still lending there but I havent seen anyone posting about rate spikes as often happen in 1 year due to being big value loans which caused the spikes. So assuming the lending is all/mainly access thats going to significantly affect the amount for repayment in that market. These have been exactly my recent thoughts too - hence wanting to get an RYI release market breakdown from RS (but being suspicious as to why they might not provide it, for exactly this reason). When you say you haven't seen anything in the 5 Year, do you mean money waiting to be matched on the market data screen? If so, this is exactly what I was going to ask other users about (as I have lost access to both 1 Year and 5 Year). Is there money in the Investor column, but not the Borrower column when you look? Agreed on your last line. We did see decent movement in Access for a while, but I wonder if the recent increase in new lending + (likely) less re-investment due to the interest rate changes has slowed things up significantly... One of aju 's posts above had a link to a site saying there was £24m of new RS lending last month. If practically all of that is in A/P/M, then yes... that doesn't leave much for RYIs...
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robski
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Post by robski on Jul 28, 2020 13:52:29 GMT
Something I hadn't considered before, maybe others have but then I missed it. If as per reasonable extrapolation and RS management comments they are lending approx 50% of the incoming capital and sending 50% to RYI. From what I can tell the 50% lending is all new markets, I cannot think of a time I have seen anything in the 5 year. As I lost access to 1 year its possible there is still lending there but I havent seen anyone posting about rate spikes as often happen in 1 year due to being big value loans which caused the spikes. So assuming the lending is all/mainly access thats going to significantly affect the amount for repayment in that market. These have been exactly my recent thoughts too - hence wanting to get an RYI market breakdown from RS (but being suspicious as to why they might not provide it, for exactly this reason). When you say you haven't seen anything in the 5 Year, do you mean money waiting to be matched on the market data screen? If so, this is exactly what I was going to ask other users about (as I have lost access to both 1 Year and 5 Year). Is there money in the Investor column, but not the Borrow column when you look? Agreed on your last line We did see decent movement in Access for a while, but I wonder if the recent increase in new lending + (likely) less re-investment due to the interest rate changes has slowed things up significantly... One of aju 's posts above had a link to a site saying there was £24m of new RS lending last month. If practically all of that is in A/P/M, then yes... that doesn't leave much for RYIs... Re 5 year, yes that exactly my point. There is constantly a reasonable amount sitting in the investor column, I haven't seen anything in the borrower column for months, Nothing at all. Most days i would log on twice or three times probably. Every morning I check for repayments, I withdraw weekly, but if I had a really large day I would withdraw then. I also tend to check lunchtime and later afternoon most days, since I like to keep an ideal on whats going on, and you can get the odd payment come in outside the normal batch being preocessed. And over months in all those logs ons I have never seen any borrower in 5 year.
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Post by diversifier on Jul 28, 2020 14:00:22 GMT
t-test? Plot the graph of the 18 weekly figures. It’s reducing during the period before that under investigation, so it needs to be de-trended before one can use the raw data. Standard linear regression: linear trend is -£0.12m per week, Correlation value 0.8. De-trend the data by subtracting that overall gradient. Calculate the population standard deviation of the de-trended weekly figures: £0.45m Let’s exclude the data from weeks 1-7, as we are trying to detect a *second* step-down in RYI amount. The Null Hypothesis is that the true average “recent” weekly (last 3 weeks) is the same as the true average “previous” weekly (weeks 8-15) The linear mean of weeks 8-15 is £3.6m, and the std dev of that estimate is £0.45m/sqrt(8) = £0.16m Recent Weeks 16-18 mean £2.9m, and the std dev of that estimate is £0.26m The means differ by £0.7m, with a combined stddev of £0.3m. *Therefore, we reject the Null Hypothesis at the 2.3-sigma level, which corresponds to p<0.001* Does that help? Please don’t say “I can’t follow your calculations” if you’re going to claim that *I’m* statistically illiterate. It may help you to pause your response, if you know that I have a PhD in quantum physics from Cambridge, and a long senior engineering career in mathematical methods and algorithms. Like chris1200 , I’d have (rightly or wrongly) approached this using Student's t-test on the null hypothesis, because of the low sample sizes (with the caveat that the sample variances are rather too dissimilar to provide an accurate test). The unbiased sample std dev of the weeks 8-15 data set (3.6, 4.0, 3.4, 3.5, 3.7, 3.5, 2.8, 4.3) is s 1 = 0.44 and for the weeks 16-18 data (3.6, 2.4, 2.7), s 2 = 0.62. Using the weighted average, with n 1 = 8 and n 2 = 3, I calculate the pooled std dev, s p = sqrt ( ( (n 1-1) s 12 + (n 2-1) s 22 ) / (n 1 +n 2 - 2) ) to be 0.49 Means differ by 0.7, so the t statistic is given by t = 0.7 / ( s p * sqrt (1/n 1 + 1/n 2) = 2.12 At 9 degrees of freedom, this is not significant at the 95% level (p=0.063), so I’d have concluded this isn’t quite sufficient to reject the null hypothesis! I’m looking at the data, you the standard error of their means, but why have we got such different outcomes? My degree was well over 30 years ago and I’m well rusty now, so please be gentle if I’ve made a gaffe but I’m intrigued why the two assessments lead to different outcomes, mine a borderline acceptance of H 0 but yours a definite rejection. How do we tell which is right? Could it be that looking at the data tells us more about their variance, which perhaps SEM loses sight of? Or perhaps the sample variances are too dissimilar, rendering the t-test too inaccurate to be of use. At one time I probably could have resolved this for myself, but these days I’m well out of my depth… TLDR; Sorry, you’re mostly right. I am 🦧 A bunch of small differences, which the p-value is exponentially sensitive to the t value, so that causes a big difference. Apart from one small point. #1: T distribution is correct for small numbers of items, while the standard error of the means gives the same result only in the limit of large numbers....but I carelessly misread the erfc table (2.3sigma is *not* p<0.001), and thought that it was so far over the limit that I was too lazy to do the t-distribution. #2: You used two-sided values, I used one-sided values. Two-sided is obviously correct, because if the RYIs had increased instead of decreasing we would also be having the discussion. Again, when I carelessly read p<0.001, I didn’t bother to think about which of them to use. #3: You’ve assumed that the RYI is constant *within* each period. That isn’t necessarily true. I used linear regression to de-trend and remove the gradient within each period, prior to significance testing. This decreases the s_p from 0.49 to 0.45. The linear correlation coefficient is quite high, so we are subtracting a genuine confounding factor rather than just p hacking. However, since we are removing a degree of freedom from the data, we have to use n=8 in the t-table rather than n=9, relative to a t-statistic of 2.31 Net result - I think p equals 5% Fortunately, we only have to wait another three days and this will be irrelevant That’s not too long for me to hide.
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chris1200
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Post by chris1200 on Jul 28, 2020 14:03:00 GMT
Re 5 year, yes that exactly my point. There is constantly a reasonable amount sitting in the investor column, I haven't seen anything in the borrower column for months, Nothing at all. Most days i would log on twice or three times probably. Every morning I check for repayments, I withdraw weekly, but if I had a really large day I would withdraw then. I also tend to check lunchtime and later afternoon most days, since I like to keep an ideal on whats going on, and you can get the odd payment come in outside the normal batch being preocessed. And over months in all those logs ons I have never seen any borrower in 5 year. Well I guess that's helping the 5 Year market RYI requests along somewhat How frustrating for A/P/M account holders... Especially given that there are loans of 5 years being lent out from these markets...
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robski
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Post by robski on Jul 28, 2020 14:09:36 GMT
Re 5 year, yes that exactly my point. There is constantly a reasonable amount sitting in the investor column, I haven't seen anything in the borrower column for months, Nothing at all. Most days i would log on twice or three times probably. Every morning I check for repayments, I withdraw weekly, but if I had a really large day I would withdraw then. I also tend to check lunchtime and later afternoon most days, since I like to keep an ideal on whats going on, and you can get the odd payment come in outside the normal batch being preocessed. And over months in all those logs ons I have never seen any borrower in 5 year. Well I guess that's helping the 5 Year market RYI requests along somewhat How frustrating for A/P/M account holders... Especially given that there are loans of 5 years being lent out from these markets... Yep it makes sense, when they scrapped the markets for new lenders it was always a question, pretty much an assumption, that at some point they would turn off all new lending to 1 and 5 as well. Just like they did with 3. I assume Covid just brought this forwards, and with new markets generally being at lower rates it seems silly they would continue to lend in the old ones. I suspect everyone will lose access to 1 and 5 at some point. You can probably delay for now but I think they will naturally die as the last loans come to an end.
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chris1200
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Post by chris1200 on Jul 28, 2020 14:14:38 GMT
Yep it makes sense, when they scrapped the markets for new lenders it was always a question, pretty much an assumption, that at some point they would turn off all new lending to 1 and 5 as well. Just like they did with 3. I assume Covid just brought this forwards, and with new markets generally being at lower rates it seems silly they would continue to lend in the old ones. I suspect everyone will lose access to 1 and 5 at some point. You can probably delay for now but I think they will naturally die as the last loans come to an end. Yes agreed it makes sense given the phasing out, but at least one user on here has recently reported a new loan in their 1 Year account with the full 12 months remaining, which would suggest a new loan in the market (I'm afraid I can't remember exactly who said it and where). Perhaps this is occurring still in 1 Year, but not 5 Year (hence faster movement in 5 Year?). It's more just that the splitting up of the markets for RYI purposes makes somewhat less sense to me in light of this. Anyway, nothing that can be done about it. (Although I'd still like to see that RYI release breakdown!)
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Post by gar on Jul 28, 2020 14:16:22 GMT
Neil Woodford was an investor in Ratesetter. If he has a £15M RYI request in the queue ahead of you. That might explain the slow progress in the access queue Obviously he didnt read the Access T&C'S, suppose it happens to the best of us.
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Post by gricehead on Jul 28, 2020 14:23:02 GMT
Yep it makes sense, when they scrapped the markets for new lenders it was always a question, pretty much an assumption, that at some point they would turn off all new lending to 1 and 5 as well. Just like they did with 3. I assume Covid just brought this forwards, and with new markets generally being at lower rates it seems silly they would continue to lend in the old ones. I suspect everyone will lose access to 1 and 5 at some point. You can probably delay for now but I think they will naturally die as the last loans come to an end. Yes agreed it makes sense given the phasing out, but at least one user on here has recently reported a new loan in their 1 Year account with the full 12 months remaining, which would suggest a new loan in the market (I'm afraid I can't remember exactly who said it and where). Perhaps this is occurring still in 1 Year, but not 5 Year (hence faster movement in 5 Year?). It's more just that the splitting up of the markets for RYI purposes makes somewhat less sense to me in light of this. Anyway, nothing that can be done about it. (Although I'd still like to see that RYI release breakdown!) That would have been me. 16/7 repayable 16/7/21. Had to come down to 5.8% (before interest reduction), but as the main purpose was to secure access to the market beyond 1/3 when the last of my other loans is repayable, it seemed an OK move.
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on Jul 28, 2020 15:02:33 GMT
based on ? releasing 75 million pounds + not losing a penny of capital? what suggestion do you have? Decreasing returns on RYI, allowing no new investors, etc. how do you expect them to release more when they are lending less and have a glut of demand. It might be that the FCA say no to new investors... Lending Works does not allow any either. It would be unfair and ethically wrong to allow new investors during such turbulence. They are doing people right - it just takes time
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Post by inquiete on Jul 28, 2020 15:20:11 GMT
How about them committing all redemption proceeds to repaying RYI's rather than originating new loans? Why should we be funding new lending out of money that could be used to accelerate the speed of meeting the backlog of RYI's.
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chris1200
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Post by chris1200 on Jul 28, 2020 15:28:36 GMT
How about them committing all redemption proceeds to repaying RYI's rather than originating new loans? Why should we be funding new lending out of money that could be used to accelerate the speed of meeting the backlog of RYI's. Because if they do this, they die. What they need is a sensible mix. However, as the posts above have been trying to tease out, things may be going a little too far in one direction, at least for the A/P/M market. But it's impossible to know without seeing the breakdown. This, presumably, is why we're not allowed to see the breakdown
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Post by inquiete on Jul 28, 2020 15:44:17 GMT
I agree this is the only justification for them continuing to lend. I am surprised that the FCA are allowing this given the overhang of RYIs. There is an inherent conflict of interest though isn't there - who comes first RS or their lenders??
The other conflict of interest to my mind is the priority they seem to applying to meeting the 5 year RYIs ahead of A/M/P requests. The justification for this I guess is also that the platform needs the lower cost of funds on the A/M/P in order to survive.
Pretty thin ice to be skating on though - "we our putting our own interests ahead of our lenders because we have got ourselves into a bit of pickle".
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chris1200
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Post by chris1200 on Jul 28, 2020 15:50:39 GMT
I agree this is the only justification for them continuing to lend. I am surprised that the FCA are allowing this given the overhang of RYIs. There is an inherent conflict of interest though isn't there - who comes first RS or their lenders?? The other conflict of interest to my mind is the priority they seem to applying to meeting the 5 year RYIs ahead of A/M/P requests. The justification for this I guess is also that the platform needs the lower cost of funds on the A/M/P in order to survive. Pretty thin ice to be skating on though - "we our putting our own interests ahead of our lenders because we have got ourselves into a bit of pickle". I won't get into the whole thing about them not doing anything wrong according to the T&C everyone agreed to as that has been done to death on here. But I would note that, especially if you're not near the front of the queue, RS's interests are largely aligned with your interests. RS keeping themselves afloat is also keeping you afloat. (Also I don't know if it's fair to say RS 'got themselves' into a pickle. It's hard to see how much of any of this is RS's doing...)
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