iRobot
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Post by iRobot on Jun 26, 2020 14:24:29 GMT
Thereby creating liquidity. Yes? it It merely creates liquidity for the individual who sells at a discount to you. That's the only liquidity that particular individual is going to care about  (Same for the dozens? hundreds? of others who can find an acceptable discount with which to exit.) AC have stated they're against introducing new products, so I don't think that's an option. Borrowers might point at their contracts and say: "Errr, no we won't!"
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cb25
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Post by cb25 on Jun 26, 2020 14:25:00 GMT
Thereby creating liquidity. Yes? it It merely creates liquidity for the individual who sells at a discount to you. Better possibly allowing investors in the access funds to transfer funds to say a 8% account on the basis of 12 month exit. Borrowers of Further tranches would be charged a 3% premium to fund. That would hopefully leave less in the Other access accounts and might permit them having access to all capital redeemed. i) quick calculation shows AA accounts should generate 7.65% on average, so doubt 8% to lenders is possible ii) I'd imagine Borrowers have a contract that dictates the cost of future tranches and AC can't just decide to increase that at the whim on a few lenders
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Post by honda2ner on Jun 26, 2020 14:29:32 GMT
You really need to go to Specsavers. Let me be quite clear, again... I WILL PUT NEW MONEY INTO THE AA SM. THAT MONEY WILL REMOVE PEOPLE FROM THE WITHDRAWAL QUEUE, EVEN IF I FLIP IT BACK UP FOR SALE EVERYONE BEHIND THE PERSON I BOUGHT FROM MOVES CLOSER TO THE FRONT OF THE QUEUE, THAT INCLUDES YOU. THEREFORE THERE IS A VERY GOOD CHANCE YOU WILL BE HELPED BY THE AA SM. Is that clear enough for you? This is very very simple stuff. Of course I get it but this will not help as I keep explaining which you do not seem to understand there is no new money for the AA pot, i.e. it will not increase the size of the AAs to help liquidity.
Now what will happen is that everyone with any sense who is already invested will request a withdraw of their funds so they get out at par, they can take the money elsewhere or buy back in at a discount increasing their yield and perhaps a capital gain, and then immediately request to withdraw of these funds, I explained this when the AA SM was first considered and stated the only way to stop this behaviour and further disadvantage the AA holder was to create a subordinate loan product once an AA is traded that say perhaps can not be redeemed at par until normal condition return. The exit queue will increase and repayments will decrease for existing AA holders, it that now clear.
Of course this is good news for anyone wanting to enter the AAs and make money by this approach so perhaps why it has so many supporters but bad news for existing AA holders.
The only way it won't help you is if you buy at a discount in the SM, is this what you are planning? Taking your argument if people buy into the SM (this is me), quite rapidly legacy (before SM) AA investors will be bought out at discount or move quicker to the front of the queue and leave with their capital and interest complete (this is YOU). If the economy remains a mess eventually the only people in the queue are those that bought in at a discount so hopefully (please please please) understand the risks they are taking. How any of this is detrimental to existing AA holders in the exit queue is beyond me and everyone else on this forum. You keep arguing that the SM is a terrible thing but it's your knight in shining armour, it's the only thing that could get you out of AC without loss so fighting it is shooting yourself in the foot with both barrels, repeatedly.
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alender
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Post by alender on Jun 26, 2020 14:30:45 GMT
I'm confused..... alender : "there is no new money for the AA pot" honda2ner : "I WILL PUT NEW MONEY INTO THE AA SM" What am I missing? (I didn't think a market has to increase in size to have liquidity. MSFTs number of shares doesn't increase every time a trade is made and it's pretty liquid.) AIUI, alender believes the launch of a SM for the AAs will lead to a greater % of the total AA balances being queued for withdrawal (at Par). Hence, for anyone already in the queue, they will see their funds being returned to them more slowly than currently. Whilst I understand his argument, I strongly suspect the opposite will be true and that the launch of a SM will see the % queued for withdrawal actually reduce. Many AA lenders will have requested withdrawal of their entire holdings simply because it’s currently the only way to start getting any of their money out (even if they have no pressing need for the funds) and so many other lenders are clearly doing it. Once the SM goes live, and a “market rate” discount is established for anyone wanting a fairly rapid exit, the incentive for many to continue to queue for withdrawal will disappear. While I can understand your logic to get maximum returns (which is what investors want) if there is an SM and an investor wishing to stay in AAs the best course of action is always to request to withdraw all funds, once funds are withdrawn buy back into the AAs at say 10% discount (this is an example not expected discount) if the current rate at par is 4% you will now get a rate of 4.444...% and of course just over 11% increase in your withdraw payments i.e. you got 100% at par for 90% 100/90 = 1.111.....
Wash rinser and do it all again. The withdraw amount can only go down to exiting lenders as a result of the SM.
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alender
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Post by alender on Jun 26, 2020 14:38:26 GMT
Of course I get it but this will not help as I keep explaining which you do not seem to understand there is no new money for the AA pot, i.e. it will not increase the size of the AAs to help liquidity.
Now what will happen is that everyone with any sense who is already invested will request a withdraw of their funds so they get out at par, they can take the money elsewhere or buy back in at a discount increasing their yield and perhaps a capital gain, and then immediately request to withdraw of these funds, I explained this when the AA SM was first considered and stated the only way to stop this behaviour and further disadvantage the AA holder was to create a subordinate loan product once an AA is traded that say perhaps can not be redeemed at par until normal condition return. The exit queue will increase and repayments will decrease for existing AA holders, it that now clear.
Of course this is good news for anyone wanting to enter the AAs and make money by this approach so perhaps why it has so many supporters but bad news for existing AA holders.
The only way it won't help you is if you buy at a discount in the SM, is this what you are planning? Taking your argument if people buy into the SM (this is me), quite rapidly legacy (before SM) AA investors will be bought out at discount or move quicker to the front of the queue and leave with their capital and interest complete (this is YOU). If the economy remains a mess eventually the only people in the queue are those that bought in at a discount so hopefully (please please please) understand the risks they are taking. How any of this is detrimental to existing AA holders in the exit queue is beyond me and everyone else on this forum. You keep arguing that the SM is a terrible thing but it's your knight in shining armour, it's the only thing that could get you out of AC without loss so fighting it is shooting yourself in the foot with both barrels, repeatedly. The problem you fail to understand is that as I have explained it now makes no sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM.
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ian
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Post by ian on Jun 26, 2020 14:43:06 GMT
it It merely creates liquidity for the individual who sells at a discount to you. That's the only liquidity that particular individual is going to care about (Same for the dozens? hundreds? of others who can find an acceptable discount with which to exit.) AC have stated they're against introducing new products, so I don't think that's an option. Borrowers might point at their contracts and say: "Errr, no we won't!" 1. AC should considering offering anything that might free up the present position. There is no regulatory requirement that prevents them offering an account such as the one I allude to. 2. I would be horrified if AC can not get it of further lending given the exceptional circumstances we find ourselves in and the fact that net realisable GDVs are probably 80% less than they were prior to lock down. I would even go so far as saying AC are negligent if these clauses are not in their agreements. AC do not seem to mind riding roughshod over lenders in terms of adherence to terms and conditions. That said it is in the companies interests to retain as much of lenders capital as possible in order to generate income for the company to survive short to medium term.
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cb25
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Post by cb25 on Jun 26, 2020 14:44:06 GMT
The only way it won't help you is if you buy at a discount in the SM, is this what you are planning? Taking your argument if people buy into the SM (this is me), quite rapidly legacy (before SM) AA investors will be bought out at discount or move quicker to the front of the queue and leave with their capital and interest complete (this is YOU). If the economy remains a mess eventually the only people in the queue are those that bought in at a discount so hopefully (please please please) understand the risks they are taking. How any of this is detrimental to existing AA holders in the exit queue is beyond me and everyone else on this forum. You keep arguing that the SM is a terrible thing but it's your knight in shining armour, it's the only thing that could get you out of AC without loss so fighting it is shooting yourself in the foot with both barrels, repeatedly. The problem you fail to understand is that as I have explained it now makes sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM. AC's blog states "Currently, as funds become available for withdrawal from the Access Account, these are allocated to an investor’s withdrawal request on a pro-rata basis directly related to each investor’s total investment in that loan within the relevant AA that they are withdrawing from, not the size of their withdrawal request", meaning the amount in the withdrawal queue isn't currently the key to repayments. Have AC said that will change with the introduction of the SM?
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SteveT
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Post by SteveT on Jun 26, 2020 14:45:37 GMT
AIUI, alender believes the launch of a SM for the AAs will lead to a greater % of the total AA balances being queued for withdrawal (at Par). Hence, for anyone already in the queue, they will see their funds being returned to them more slowly than currently. Whilst I understand his argument, I strongly suspect the opposite will be true and that the launch of a SM will see the % queued for withdrawal actually reduce. Many AA lenders will have requested withdrawal of their entire holdings simply because it’s currently the only way to start getting any of their money out (even if they have no pressing need for the funds) and so many other lenders are clearly doing it. Once the SM goes live, and a “market rate” discount is established for anyone wanting a fairly rapid exit, the incentive for many to continue to queue for withdrawal will disappear. While I can understand your logic to get maximum returns (which is what investors want) if there is an SM and an investor wishing to stay in AAs the best course of action is always to request to withdraw all funds, once funds are withdrawn buy back into the AAs at say 10% discount (this is an example not expected discount) if the current rate at par is 4% you will now get a rate of 4.444...% and of course just over 11% increase in your withdraw payments i.e. you got 100% at par for 90% 100/90 = 1.111.....
Wash rinser and do it all again. The withdraw amount can only go down to exiting lenders as a result of the SM.
It’s ironic then that AC’s decision to create the AA SM came in response to all the repetitive bleating from a handful of lenders clamouring to exit (of which I think you were one?). As the saying goes, be careful what you wish for!
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Greenwood2
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Post by Greenwood2 on Jun 26, 2020 14:50:13 GMT
The only way it won't help you is if you buy at a discount in the SM, is this what you are planning? Taking your argument if people buy into the SM (this is me), quite rapidly legacy (before SM) AA investors will be bought out at discount or move quicker to the front of the queue and leave with their capital and interest complete (this is YOU). If the economy remains a mess eventually the only people in the queue are those that bought in at a discount so hopefully (please please please) understand the risks they are taking. How any of this is detrimental to existing AA holders in the exit queue is beyond me and everyone else on this forum. You keep arguing that the SM is a terrible thing but it's your knight in shining armour, it's the only thing that could get you out of AC without loss so fighting it is shooting yourself in the foot with both barrels, repeatedly. The problem you fail to understand is that as I have explained it now makes sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM. Why? If someone didn't want to sell at par why would they suddenly want to sell at a loss? Do you mean they might want to sell at a small loss in the hope they could buy back in at a lesser loss, a bit risky, particularly if you didn't really want to sell in the first place. Or those that have successfully sold at par might be daft/brave enough to buy back in at a discount? Edit: Hopefully it will lead to some churning but isn't that what everyone wants? Movement out of (for those that want out) and into (for those that want in to) the account.
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alender
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Post by alender on Jun 26, 2020 14:56:43 GMT
The problem you fail to understand is that as I have explained it now makes sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM. AC's blog states "Currently, as funds become available for withdrawal from the Access Account, these are allocated to an investor’s withdrawal request on a pro-rata basis directly related to each investor’s total investment in that loan within the relevant AA that they are withdrawing from, not the size of their withdrawal request", meaning the amount in the withdrawal queue isn't currently the key to repayments. Have AC said that will change with the introduction of the SM? You are correct, I forgot about this feature but it makes no difference, buying on the SM will have this new amount added to the amount that can be withdrawn so once withdrawn can be recycled for extra interest and increased withdraw amounts (next time round) as explained, each time you do this you will increase your % of the AAs. The point is that why would anyone who wishes to stay not keep doing this as it will increase your returns to the detriment of current holders who wish to withdraw funds. The analogy to shares or trusts does not hold because of the withdraw at par function.
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iRobot
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Post by iRobot on Jun 26, 2020 14:57:50 GMT
The problem you fail to understand is that as I have explained it now makes sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM. AC's blog states "Currently, as funds become available for withdrawal from the Access Account, these are allocated to an investor’s withdrawal request on a pro-rata basis directly related to each investor’s total investment in that loan within the relevant AA that they are withdrawing from, not the size of their withdrawal request", meaning the amount in the withdrawal queue isn't currently the key to repayments. Have AC said that will change with the introduction of the SM? posted early in May: " It is presently intended that the existing withdrawals in the original withdrawal queue shall remain in place and at their present date and time stamp as per that withdrawal queue. They shall therefore now be called 'Sell' orders at par (full) value and with no discount in the new marketplace. It is presently intended that those go back to a FIFO priority and that all trades at par value will execute in the date order they were originally posted. The old withdrawal system is therefore planned to be absorbed into the marketplace and returns to FIFO, although of course offers to sell at a discount will be served to new investors first of all so that new investment automatically takes advantage of the oldest and highest discounts first of all." Simply having something awaiting withdrawal will no longer generate returns. Edit: ooops, my bad - should have scrolled further. Stuart goes on to say:
"Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace, hence reducing your sell order if it is still waiting to execute against a new willing buyer."
So it would appear some returns may be generated from having something on the marketplace.If you must exit, you will have to use the SM and you will likely have to discount. Anyone buying at a discount and who want to try and 'rinse and repeat' wil have to hope to 'buy low' and then 'sell not-quite-so-low'. The market will even out. They always do. Anyone who must exit would possibly do well to leave it as long as possible and then drip feed their holdings, gauging the level of discounts needed as time passes. Perhaps easier said than done for anyone in severely dire straights.
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iRobot
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Post by iRobot on Jun 26, 2020 15:02:06 GMT
That's the only liquidity that particular individual is going to care about (Same for the dozens? hundreds? of others who can find an acceptable discount with which to exit.) AC have stated they're against introducing new products, so I don't think that's an option. Borrowers might point at their contracts and say: "Errr, no we won't!" 1. AC should considering offering anything that might free up the present position. There is no regulatory requirement that prevents them offering an account such as the one I allude to. 2. I would be horrified if AC can not get it of further lending given the exceptional circumstances we find ourselves in and the fact that net realisable GDVs are probably 80% less than they were prior to lock down. I would even go so far as saying AC are negligent if these clauses are not in their agreements. AC do not seem to mind riding roughshod over lenders in terms of adherence to terms and conditions. That said it is in the companies interests to retain as much of lenders capital as possible in order to generate income for the company to survive short to medium term. I'd be interested in seeing some hard evidence for that 'fact'.
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alender
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Post by alender on Jun 26, 2020 15:06:02 GMT
While I can understand your logic to get maximum returns (which is what investors want) if there is an SM and an investor wishing to stay in AAs the best course of action is always to request to withdraw all funds, once funds are withdrawn buy back into the AAs at say 10% discount (this is an example not expected discount) if the current rate at par is 4% you will now get a rate of 4.444...% and of course just over 11% increase in your withdraw payments i.e. you got 100% at par for 90% 100/90 = 1.111.....
Wash rinser and do it all again. The withdraw amount can only go down to exiting lenders as a result of the SM.
It’s ironic then that AC’s decision to create the AA SM came in response to all the repetitive bleating from a handful of lenders clamouring to exit (of which I think you were one?). As the saying goes, be careful what you wish for! The bleating as you call it was for a pro rata system for withdrawals, we have now got that so perhaps in this case our wishes come true.
I guess you would like people with different views to yours to not have a say and if they do try to put them down with pejorative language.
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Post by honda2ner on Jun 26, 2020 15:14:51 GMT
The only way it won't help you is if you buy at a discount in the SM, is this what you are planning? Taking your argument if people buy into the SM (this is me), quite rapidly legacy (before SM) AA investors will be bought out at discount or move quicker to the front of the queue and leave with their capital and interest complete (this is YOU). If the economy remains a mess eventually the only people in the queue are those that bought in at a discount so hopefully (please please please) understand the risks they are taking. How any of this is detrimental to existing AA holders in the exit queue is beyond me and everyone else on this forum. You keep arguing that the SM is a terrible thing but it's your knight in shining armour, it's the only thing that could get you out of AC without loss so fighting it is shooting yourself in the foot with both barrels, repeatedly. The problem you fail to understand is that as I have explained it now makes sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM. Why would the exit queue rise? If there is £1000 in the queue and I buy £10 of it and then flip it at par the queue is errrrrm, £1000. I'm at the back of it, boo hoo. Even if existing AA holders sell out in order to buy back in at discount this speeds up the queue by exactly the same amount so the effect on everyone else in the queue is nothing. In other words if the queue doubles to £2000 because existing investors decide to sell, buy and flip, when £1000 from investors buy back in, the queue is errrrm, £1000. Only completely insane investors would increase discounts in this situation.
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Post by Deleted on Jun 26, 2020 15:17:43 GMT
It’s ironic then that AC’s decision to create the AA SM came in response to all the repetitive bleating from a handful of lenders clamouring to exit (of which I think you were one?). As the saying goes, be careful what you wish for! The bleating as you call it was for a pro rata system for withdrawals, we have now got that so perhaps in this case our wishes come true. I guess you would like people with different views to yours to not have a say and if they do try to put them down with pejorative language.
The irony being that sheep also have traits other than 'bleating'. They are obedient, docile, easy to herd, and accept being sheared repeatedly without complaining. The ideal P2P retail customer, in other words 
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(Same for the dozens? hundreds? of others who can find an acceptable discount with which to exit.)
