dave4
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Cynical is a hobby not a lifestyle
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Post by dave4 on May 2, 2020 17:20:57 GMT
In 2 minds. Today at this time, considering everything i think i know. (whatever that may be). I would be very tempted to buy at over 25%. Would sell all at only 8% discount max. What this says about confidence in AC i have no idea. It says we'll make a trader of you yet!  To keep on topic.... Just to clarify what i said please read.... I would be very tempted to buy at over 25%. OR Would sell all at only 8% discount max. Maybe a trader i will become.....
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Post by df on May 2, 2020 17:24:00 GMT
All my funds in access accounts are in withdrawal queue. I have no idea what might happen to these accounts in near future, therefore I prefer reduction, not increase. If it goes back to normal in future I will top them up to the original value, but for now I'm not reinvesting or depositing any new money to AC (as I wouldn't do in any circumstances if there's no loan flow on platform). In other words, I won't be participating in this scheme (neither selling at discount nor buying).
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gmitz
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Post by gmitz on May 2, 2020 17:34:16 GMT
Really? Would buy my AA holdings in defaulted loans among the good ones, at discount of course? That's exactly what will happen if you buy someone else's AA holdings, discounted or not. What does that have to do with you calling it a Ponzi? You shouldn't use terms like that lightly, no insult intended. Yes, but the person you qouted did not call it a ponzi. As of right now with no new loans being under written its a zero number game that eventually it will end that way. However, that is only IF AC stopped under writing loans for life. At that point it would go into Administration. Generally ponzi involve false asset security/marketing ect ect. It just isnt' the same thing, let alone illegal. The Ponzi scheme generates returns for early investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. Both Ponzi schemes and pyramid schemes eventually bottom out when the flood of new investors dries up and there isn't enough money to go around. Do see the similarity when AC allows trading of defaulted loans? Or you think you will be buying someone else's good holdings only and they will be left with the bad ones? Any enterprise can be turn unto a Ponzi Scheme, yes by fraudulent intend or just by mismanagement.
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Post by Harland Kearney on May 2, 2020 17:48:14 GMT
What does that have to do with you calling it a Ponzi? You shouldn't use terms like that lightly, no insult intended. Yes, but the person you qouted did not call it a ponzi. As of right now with no new loans being under written its a zero number game that eventually it will end that way. However, that is only IF AC stopped under writing loans for life. At that point it would go into Administration. Generally ponzi involve false asset security/marketing ect ect. It just isnt' the same thing, let alone illegal. The Ponzi scheme generates returns for early investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. Both Ponzi schemes and pyramid schemes eventually bottom out when the flood of new investors dries up and there isn't enough money to go around. Do see the similarity when AC allows trading of defaulted loans? Or you think you will be buying someone else's good holdings only and they will be left with the bad ones? Any enterprise can be turn unto a Ponzi Scheme, yes by fraudulent intend or just by mismanagement. It would only apply in the instance that those defaulted loans were 100% losses and the intended paper security was false. If not it will create a capital haircut for the fund. This type of classfication could be classed to a wide range of investment types, including the collasping of shares when no buyers can be found in penny stocks or a bond holder. Would you call those ponzi schemes? Is woodfords fund a ponzi scheme by this classfication? We have a lack of buyers for the sellers, this doesnt' make it a ponzi automatically. The creation of a discount is bringing your issues you listed above back to reaility and away from PAR. It isn't a ponzi, but doesn't mean I want to hold onto much of the investment class; thats another matter!
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iRobot
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Post by iRobot on May 2, 2020 19:04:51 GMT
Just looking a the discount bracketing it suggests decrements in 0.5%. I'm curious as to what it'll be come market launch. ABL's is waaaay too granular at 3-decimal places, in my opinion. Can't remember for sure what MT's was when that was introduced, although 0.5% does ring a bell ( SteveT, any connection?). I don't think I'd want to see it at anything less than 0.5% steps, maybe even 1%. Perhaps there should be a poll to gauge sellers preferences?  |
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jcb208
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Post by jcb208 on May 2, 2020 19:45:36 GMT
Just looking a the discount bracketing it suggests decrements in 0.5%. I'm curious as to what it'll be come market launch. ABL's is waaaay too granular at 3-decimal places, in my opinion. Can't remember for sure what MT's was when that was introduced, although 0.5% does ring a bell ( SteveT , any connection?). I don't think I'd want to see it at anything less than 0.5% steps, maybe even 1%. Perhaps there should be a poll to gauge sellers preferences? Can we have a poll for investors who don't want all this discount  ,which is a totally different product we signed up for which was a simple instant access account ,I know in normal market conditions 
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chris1200
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Post by chris1200 on May 2, 2020 19:48:31 GMT
(quote deleted)
Broadly agree on your initial point - and this speaks to my points in another thread about the lack of distinction between Access and MLA accounts now, even though the latter pays higher interest. The only thing to keep in mind, though, is the existence of the provision fund. Obviously we don't know if it will be enough, but it should narrow the interest margin a little.
I'm not quite sure I follow on how you get to a (huge) 50% discount, though? Or do you mean a 50% discount of the interest margin (rather than of the principal) or something similar?
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IFISAcava
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Post by IFISAcava on May 2, 2020 20:12:30 GMT
MLA pays let's say 8%. You won't want less than that. But lat's say 10% of loans are suspended/in default etc in the AA account, so you'd need 9% or so to cover that as you wouldn't be in them in the MLA. Then there's an average discount of say 2% in the ML. So we are up to say 11% Then there's a a price for reduced liquidity - let's look at at 2% (a bit bigger than the difference between QAA and 90-day). So up to 13%. AAs pay 3.75% currently. So there's a 9.25% difference on those figures. Hard to see AAs being bought for less than a 10% discount.
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chris1200
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Post by chris1200 on May 2, 2020 20:19:39 GMT
Broadly agree on your initial point - and this speaks to my points in another thread about the lack of distinction between Access and MLA accounts now, even though the latter pays higher interest. The only thing to keep in mind, though, is the existence of the provision fund. Obviously we don't know if it will be enough, but it should narrow the interest margin a little. I'm not quite sure I follow on how you get to a (huge) 50% discount, though? Or do you mean a 50% discount of the interest margin (rather than of the principal) or something similar? MLA pays let's say 8%. You won't want less than that. But lat's say 10% of loans are suspended/in default etc in the AA account, so you'd need 9% or so to cover that as you wouldn't be in them in the MLA. Then there's an average discount of say 2% in the ML. So we are up to say 11% Then there's a a price for reduced liquidity - let's look at at 2% (a bit bigger than the difference between QAA and 90-day). So up to 13%. AAs pay 3.75% currently. So there's a 9.25% difference on those figures. Hard to see AAs being bought for less than a 10% discount. Yes, but that's a rather smaller discount than 50%! I'd also be a little more generous, though. As I said before, you also have the benefit of the provision fund in Access accounts. You could also argue that there is the potential for par-sales to return in the not-too-distant future. Access accounts should also go higher than 3.75% interest eventually - and, besides, lower Access interest also means lower MLA interest. All this is supposition, of course, but I think it should be reflected in a few % points on your estimate. Obviously it's all going to be subjective, though! Edit: Also, why would you deduct 2% for reduced liquidity? The introduction of the marketplace should mean there is liquidity - that's the whole point of course (provided you sell at the 'right' price - but that price is what you're trying to calculate here, so surely we shouldn't assume any issue with selling?)
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Post by jasonnewman on May 2, 2020 20:34:03 GMT
If anyone wants to sell any loans at a 50% discount message me so I can buy them off you - I intend to subsequently put them in the withdrawal queue and redeem at par.
Thanks
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alender
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Post by alender on May 2, 2020 22:34:38 GMT
Broadly agree on your initial point - and this speaks to my points in another thread about the lack of distinction between Access and MLA accounts now, even though the latter pays higher interest. The only thing to keep in mind, though, is the existence of the provision fund. Obviously we don't know if it will be enough, but it should narrow the interest margin a little. I'm not quite sure I follow on how you get to a (huge) 50% discount, though? Or do you mean a 50% discount of the interest margin (rather than of the principal) or something similar? MLA pays let's say 8%. You won't want less than that. But lat's say 10% of loans are suspended/in default etc in the AA account, so you'd need 9% or so to cover that as you wouldn't be in them in the MLA. Then there's an average discount of say 2% in the ML. So we are up to say 11% Then there's a a price for reduced liquidity - let's look at at 2% (a bit bigger than the difference between QAA and 90-day). So up to 13%. AAs pay 3.75% currently. So there's a 9.25% difference on those figures. Hard to see AAs being bought for less than a 10% discount. One other factor are future commitments of loan tranches which will mostly/almost exclusively come from the AAs, the MLA will pay out all capital repayments but the AAs will see a lot of these repayments funding these tranches.
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IFISAcava
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Post by IFISAcava on May 2, 2020 23:03:07 GMT
MLA pays let's say 8%. You won't want less than that. But lat's say 10% of loans are suspended/in default etc in the AA account, so you'd need 9% or so to cover that as you wouldn't be in them in the MLA. Then there's an average discount of say 2% in the ML. So we are up to say 11% Then there's a a price for reduced liquidity - let's look at at 2% (a bit bigger than the difference between QAA and 90-day). So up to 13%. AAs pay 3.75% currently. So there's a 9.25% difference on those figures. Hard to see AAs being bought for less than a 10% discount. Yes, but that's a rather smaller discount than 50%! I'd also be a little more generous, though. As I said before, you also have the benefit of the provision fund in Access accounts. You could also argue that there is the potential for par-sales to return in the not-too-distant future. Access accounts should also go higher than 3.75% interest eventually - and, besides, lower Access interest also means lower MLA interest. All this is supposition, of course, but I think it should be reflected in a few % points on your estimate. Obviously it's all going to be subjective, though! Edit: Also, why would you deduct 2% for reduced liquidity? The introduction of the marketplace should mean there is liquidity - that's the whole point of course (provided you sell at the 'right' price - but that price is what you're trying to calculate here, so surely we shouldn't assume any issue with selling?) Yes true re liquidity - except that you will still probably have worse liquidity than the MLA as you have variable discounting in MLA for different loans. The figures I used were for the sake of argument and probably underestimates (although I forgot to take of the 0.9% for the MLA), and as people say there is also the risk of being left with funding future tranches of development loans from PF or repayments, and of being left with a gradually increasing ratio of bad debt as there are no new loans to replace those repaid. My feeling is that 10% is the absolute minimum and it is likely to be much higher at least initially.
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jlend
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Post by jlend on May 3, 2020 5:45:16 GMT
I would not go back into the Access accounts at this time.
But I do hope it works out for everyone both those that want to exit for whatever reason and those that are happy to take the risk.
I have tried to make an educated judgement call after seeing the poll, but having tried there are simply too many unknowns for me about how the country and in particular AC will react as we go through the next few months.
Good luck with whatever you decide to do.
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SteveT
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Post by SteveT on May 3, 2020 8:07:07 GMT
Just looking a the discount bracketing it suggests decrements in 0.5%. I'm curious as to what it'll be come market launch. ABL's is waaaay too granular at 3-decimal places, in my opinion. Can't remember for sure what MT's was when that was introduced, although 0.5% does ring a bell ( SteveT , any connection?). I don't think I'd want to see it at anything less than 0.5% steps, maybe even 1%. I simply assumed it will be the same steps as the MLA
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SteveT
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Post by SteveT on May 3, 2020 8:16:23 GMT
If anyone wants to sell any loans at a 50% discount message me so I can buy them off you - I intend to subsequently put them in the withdrawal queue and redeem at par. Your faith in the long-term future of AC is restored then?!
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,which is a totally different product we signed up for which was a simple instant access account ,I know in normal market conditions 
