pip
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Post by pip on Aug 3, 2020 13:55:15 GMT
Interesting to note that nobody (I don’t think) has mentioned that the reason this business has (basically) gone under is really because of COVID. Prior to the outbreak, fine it had issues and was probably unlikely to ever make any serious dosh for its shareholders because of high cost of funds etc, but actually it was a liquid version of an illiquid asset class. I mean I never (until COVID) ever had to wait for funds to be released or made a loss, and I believe that is the case of 99% or so of others. The liquidity squeeze they experienced was simply brutal. The firm wasn’t sunk by poor management or bad underwriting, but by a filthy disease. I’m sure this is the start of many casualties. Metro have got a bargain here, but they were the best game in town as raising cash during an environment like this is next to impossible. I feel sad for the staff of RS for sure. Agreed, more and more every day I worry as I see one by one previously very good or promising UK companies fail.
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Aug 3, 2020 14:06:44 GMT
I was expecting it to rear its ugly head here at some point but it's utter nonsense to suggest COVID as the reason for RateSetter's 'demise'.
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aju
Member of DD Central
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Post by aju on Aug 3, 2020 14:20:51 GMT
Blimey, some days its like being on twitter or facebook, I can't keep up am still on page 2!  ... Edit: Finally something interesting to read though... |
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Aug 3, 2020 14:27:37 GMT
Blimey, some days its like being on twitter or facebook, I can't keep up am still on page 2! ... No you're not, you're on page 5. Do keep up! 
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aju
Member of DD Central
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Post by aju on Aug 3, 2020 14:29:50 GMT
Blimey, some days its like being on twitter or facebook, I can't keep up am still on page 2! ... No you're not, you're on page 5. Do keep up! Cheers, my excuse is had to do some gardening chores for most of the morning and tehn we watch Jeremy Vine for dinner. Its a dogs life this retirement milarkey ...  Still on page 3 now, mrs Aju keeps interupting my flow.
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Post by bouncycastle on Aug 3, 2020 15:00:45 GMT
I was expecting it to rear its ugly head here at some point but it's utter nonsense to suggest COVID as the reason for RateSetter's 'demise'. It’s definitely the biggest contributor. The P2P model was always going to struggle going forward to make any real money, and RS have defo made some mistakes over time. There is no way that RS gets bought for 1% of FC’s book price of covid isn’t a thing. I would argue that the majority of the posts on RS for the last 4 months wouldn’t even existed if Covid hadn’t happened and there is a fair amount of evidence to support that given the nature of the content
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Post by Deleted on Aug 3, 2020 15:07:17 GMT
These 'Access'-style accounts were a liquidity crisis waiting to happen. Covid just happened to be the first crisis that came along.
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coogaruk
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Post by coogaruk on Aug 3, 2020 15:11:09 GMT
I was expecting it to rear its ugly head here at some point but it's utter nonsense to suggest COVID as the reason for RateSetter's 'demise'. It’s definitely the biggest contributor. Nonsense
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ceejay
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Post by ceejay on Aug 3, 2020 15:27:33 GMT
It’s definitely the biggest contributor. Nonsense Did the Titanic sink because of the iceberg? Or because of the hubris of its designers/builders/owners? Discuss. FWIW I think that Covid19 is RS's iceberg. Sure, it's the immediate cause, but by no means the primary one.
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aju
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Post by aju on Aug 3, 2020 15:31:39 GMT
Did the Titanic sink because of the iceberg? Or because of the hubris of its designers/builders/owners? Discuss. FWIW I think that Covid19 is RS's iceberg. Sure, it's the immediate cause, but by no means the primary one. I blame it on all those astute bug'gers who beat me to the trough...
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coogaruk
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Post by coogaruk on Aug 3, 2020 15:39:32 GMT
Did the Titanic sink because of the iceberg? Or because of the hubris of its designers/builders/owners? Discuss. FWIW I think that Covid19 is RS's iceberg. Sure, it's the immediate cause, but by no means the primary one. I don't think it's even the immediate cause, else how come the other 'Big 2' continue to thrive? (I use that word tenuously in the case of FC) one of which is now a plc and the other has a banking licence!
Not forgetting of course that the smaller p2p players started going to the wall long before COVID19 existed.
Poor management decisions, BIG strategic mistakes yes but RS didn't die from any virus.
(I was going to include disenfranchising it's loyal customers too but the aforementioned others seem to have miraculously got away with that one!)
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Post by Deleted on Aug 3, 2020 15:40:55 GMT
'Fin-Tech' was always a weird hybrid - an FCA regulated finance business sector that wanted to be treated like dot-com startups (both for hype and regulatory purposes).
And the hubris of some of these companies that thought they had discovered some kind of holy grail was quite staggering, when all they were really doing was a standard banking/loan model with slacker regulation.
There is an old saying about the credit cycle - the best loans originate in the worst times, the worst loans originate in the best times.
Well, P2P seems to have originated some of the worst products in the best times too. These 'Access'-style accounts were clearly produced by people who had little experience of a full credit cycle.
A liquidity crunch in these products is almost guaranteed by the design. If not Covid, then something else would have knocked them over at some point.
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pip
Posts: 542
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Post by pip on Aug 3, 2020 15:52:51 GMT
It’s definitely the biggest contributor. Nonsense Coogaruk - You are talking nonsense. Of course there were inherent risks and problems with P2P and ratesetter before Covid-19. But Covid-19 has, as you won't need me to explain, devastated many small businesses and many employees are furloughed, a lot of which will ultimately be unemployed. Businesses are going bust daily, good businesses such as DW that previously were fine but whose revenue has just been turned off. There will be many more and each employee who loses their job is another whose spending will drastically reduce, result in another family which will need to rely on the state and be likely to default on loans. Take for instance the car loan market, yes it was a horrid bubble before Covid-19, now it will be a very real car crash. To claim that probably the most catastrophic event for the British economy since, well probably before WW2 (wars actually are generally bad for public finances but not too bad for the GDP), isn't a key cause of Ratesetter's demise is ridiculous.
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pip
Posts: 542
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Post by pip on Aug 3, 2020 15:55:30 GMT
'Fin-Tech' was always a weird hybrid - an FCA regulated finance business sector that wanted to be treated like dot-com startups (both for hype and regulatory purposes). And the hubris of some of these companies that thought they had discovered some kind of holy grail was quite staggering, when all they were really doing was a standard banking/loan model with slacker regulation. There is an old saying about the credit cycle - the best loans originate in the worst times, the worst loans originate in the best times. Well, P2P seems to have originated some of the worst products in the best times too. These 'Access'-style accounts were clearly produced by people who had little experience of a full credit cycle. A liquidity crunch in these products is almost guaranteed by the design. If not Covid, then something else would have knocked them over at some point. Agree with that, always thought access style accounts were really long term investments which paid a lower rate of interest and gave you free access to your cash if there was liquidity. Really made no sense, when I invested in RS I always invested years as at least with this the risk/rewards kind of made sense.
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Aug 3, 2020 17:13:53 GMT
Coogaruk - You are talking nonsense. Of course there were inherent risks and problems with P2P and ratesetter before Covid-19. But Covid-19 has, as you won't need me to explain, devastated many small businesses and many employees are furloughed, a lot of which will ultimately be unemployed. Businesses are going bust daily, good businesses such as DW that previously were fine but whose revenue has just been turned off. There will be many more and each employee who loses their job is another whose spending will drastically reduce, result in another family which will need to rely on the state and be likely to default on loans. Take for instance the car loan market, yes it was a horrid bubble before Covid-19, now it will be a very real car crash. To claim that probably the most catastrophic event for the British economy since, well probably before WW2 (wars actually are generally bad for public finances but not too bad for the GDP), isn't a key cause of Ratesetter's demise is ridiculous. Well everyone is entitled to their opinion and in my opinion it is you - and anyone else that believes that COVID was the doing of RS - who is wrong.
I think I'll leave this one there.
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