upperdeane
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Post by upperdeane on Dec 17, 2020 16:06:10 GMT
Slices sold at 2.4% discount today, so the Exit is wide open for anyone who really wants it. I sold £5k worth at 2.3%. It went to hundreds (if not approaching a thousand) of mostly small transactions including a lot of "<£0.01" transactions - what's that all about - that cant be a normal buy transaction, must be some system transaction?
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alibaba
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Post by alibaba on Dec 17, 2020 16:10:57 GMT
Without coming across as too rude Alender (and my post isn't actually directed at you so much, just the on going debate here about cash payouts in general) " confidence would grow as investors would believe they are in accounts where there is a decent chance of access to their funds and not stuck in Hotel California accounts which would mean more money placed back in the accounts." This comments suggests that all new investors are looking to exit. New money going into the accounts is not looking to exit, this doesn't make sense. New money is looking to invest in a range of loans which are not in run off, which are adding new loans to portfilio, paying old debt back and topping up the PF. Those are the only things which will drive the discounts or liquidity to PAR. Once new investors money outweighs the demands to fulfill new loans than withdrawals will be honoured (or if discount is low enough for anyone). I find it hard to argue against the longeivity of investors, other those who wish to exit now at the expense of the future of the whole portfilio. (by exit now, i mean 10% of your money back now, with the possbility of the other 90% suffering considerble capital loss as the whole thing comes crashing down) No new loans would be nothing but a disaster, and we will be run off. Being locked in for 5+ years on some loans is not out of the question at that point.You are not rude at all, you have one opinion and I have another.
Unfortunately with the SM there is no new money entering the accounts and I would suggest that all lenders are looking to exit at some point (who invests their money for ever) and without this option there will be many people reluctant to invest. There is no guarantee to get your money back via the SM and who know how long the SM will last.
I can understand the argument for new loans and it is a good one but it should not be using the only source of funds (because of the SM) available for investors to exit as in the T&Cs, after all these were sold as Access Accounts and designed to use excess funds as a way to give access, this will be another fundamental change to way these accounts operate if investors are locked in using their repayments against their wishes and instructions for new business.
It now boils down to either use funds which were earmarked (before lock in) for repayments and restore some faith in AC to carry out investors instructions and try to turn these back to Access Accounts or take this money against many investors wishes (we know this because the amount of money trying to exit) to try to improve the health of these accounts. You will not restore access if you deliberately lock up excess funds in new business while there are many people trying to get their money long after the access period has expired.
We have still a long way to go before we are out of the financial side of this crisis and there is no guarantee AC will make prudent choses with our money and even if they did there could still be loses due to future state of the economy.
I may be alone in my attitude to the situation regarding the access accounts and investing on the platform I have had six figures locked in the account since the 15th of March, I am fortunate that this is not money that I need for day to day expenses, however, I have decided that I will only start investing in AC again when the majority of this money is in my bank account. This may seem odd but there may be other investors with the same attitude. In my view is is all about confidence and trust.
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cb25
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Post by cb25 on Dec 17, 2020 16:19:24 GMT
Slices sold at 2.4% discount today, so the Exit is wide open for anyone who really wants it. I sold £5k worth at 2.3%. It went to hundreds (if not approaching a thousand) of mostly small transactions including a lot of "<£0.01" transactions - what's that all about - that cant be a normal buy transaction, must be some system transaction? I believe it occurs when the system is allocating repayments to thousands of lenders and they're re-investing the money. System looks to see who is selling at the biggest discount, hence best deal for re-investment purchases. I've had it happen to me many times when I've been selling at the highest discount.
Edit: I looked back at my completed sell-at-discount transactions and found one with 1372 pages of transactions (1371 pages with 10 transactions, 1 page with 4, hence 13714 transactions!)
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upperdeane
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Post by upperdeane on Dec 17, 2020 16:23:41 GMT
I sold £5k worth at 2.3%. It went to hundreds (if not approaching a thousand) of mostly small transactions including a lot of "<£0.01" transactions - what's that all about - that cant be a normal buy transaction, must be some system transaction? I believe it occurs when the system is allocating repayments to thousands of lenders and they're re-investing the money. System looks to see who is selling at the biggest discount, hence best deal for re-investment purchases. I've had it happen to me many times when I've been selling at the highest discount. Ah OK, makes sense. Thanks for that.
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SteveT
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Post by SteveT on Dec 17, 2020 17:02:25 GMT
I think the same. Anything over 2% discount still represents 6+ months of "free interest", and there's the traditional seasonal effect to consider too (typically P2P secondary market rates drop over the Xmas / New Year period as lenders continue to reinvest their repayments without new loans being available) Shouldn't that have the opposite effect? No, in the absence of new loans, lenders typically take up the best available SM offers (biggest discounts and/or highest interest rates) so the rates available on what’s left on the SMs tend to decline over the holiday period.
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jlend
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Post by jlend on Dec 17, 2020 17:25:51 GMT
CBIL extension to at least end of March which may make restarting lending on the access accounts at scale challenging. The access accounts may simply be uncompetitive for many borrowers compared to an AC CBIL loan. Nothing in this press release at least about changing the criteria for CBIL. www.gov.uk/government/news/chancellor-extends-furlough-and-loan-schemes |
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ian
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Post by ian on Dec 17, 2020 18:07:09 GMT
Discount down to 2.1% looking like sub 2% is on its way 👍
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ashtondav
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Post by ashtondav on Dec 17, 2020 18:25:11 GMT
Surely if it goes much lower the moaners' confidence will increase to such an extent that they won't be sellers - unless forced by need. And i'm guessing most of the "forced" sellers did so at the start of the SM at 8% discounts.
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Post by Ace on Dec 17, 2020 18:26:57 GMT
Shouldn't that have the opposite effect? No, in the absence of new loans, lenders typically take up the best available SM offers (biggest discounts and/or highest interest rates) so the rates available on what’s left on the SMs tend to decline over the holiday period. Ah yes, my bad, I took the post out of context. For some reason I was imagining a proper market like ABL where discounts and premiums are allowed. Over there the majority of loans trade at a premium. So, when there are extra buyers, the rate (in this case a premium) tends to rise as the lower premiums are bought up.
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upperdeane
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Post by upperdeane on Dec 17, 2020 18:30:33 GMT
2.1% buy rate now. Edit: ian - sorry missed your post above where you already stated this. |
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Post by oppsididitagain on Dec 17, 2020 19:11:56 GMT
What would investors make of there being a permanent discount applied once AC acts as the counter-party to AA withdrawals, amounting to a fee? I'm imagining '0.9%' for same day withdrawals or '0.65%' for 30 days and '0.5%' for 90 days, say?
I chose '0.9' as being under the psychological 'barrier' of 1% of course! It also corresponds to a figure already in use at AC!
This could only apply in conditions under which the management charge was first removed - or set back to 0 again (although the interest rate being settable by AC makes that a bit moot) perhaps?
How would '4%' pa with 30 days access losing you about 60 days interest sound?
Or '4.5% pa' (assuming some uptick in the differential) with 90 days access costing 40 days interest?
[All 'back of an envelope' musings of course]
I think history has proven that the above is great on paper, but in the real world when you have a liquidity problem, it doesn't work. Both RS and AC had these type of accounts in place but they choose to pay out when they like, not based on the liquidity available in the market. Also I dont think the FCA lets them stand in as a counterparty otherwise you could have transferred direct to you ISA from you standard acc without having to sell out to cash 1st. Maybe start a separate thread as see what people think
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SteveT
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Post by SteveT on Dec 17, 2020 23:21:56 GMT
No, in the absence of new loans, lenders typically take up the best available SM offers (biggest discounts and/or highest interest rates) so the rates available on what’s left on the SMs tend to decline over the holiday period. Ah yes, my bad, I took the post out of context. For some reason I was imagining a proper market like ABL where discounts and premiums are allowed. Over there the majority of loans trade at a premium. So, when there are extra buyers, the rate (in this case a premium) tends to rise as the lower premiums are bought up. I really question why anyone would ever choose to pay a premium to buy into a P2P loan. I’ve sold many £000s of loans at a premium over the years, but don’t believe I’ve ever bought at a premium.
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Post by Ace on Dec 18, 2020 0:23:38 GMT
Ah yes, my bad, I took the post out of context. For some reason I was imagining a proper market like ABL where discounts and premiums are allowed. Over there the majority of loans trade at a premium. So, when there are extra buyers, the rate (in this case a premium) tends to rise as the lower premiums are bought up. I really question why anyone would ever choose to pay a premium to buy into a P2P loan. I’ve sold many £000s of loans at a premium over the years, but don’t believe I’ve ever bought at a premium. I bought in to quite a few at a small premium when I started with ABLrate. The loan flow was so slow that it was the only way to achieve any sort of diversification there. Paying aroud a 1% premium for loans earning more than that per month with more than 20 months to run had a very small impact on my overall return there. I'd do it again if I was particularly keen to deploy some funds. I'm less bothered about the diversification within a platform than I used to be as I have plenty of diversification across multiple platforms now (rather too many if truth be told).
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Post by oppsididitagain on Dec 18, 2020 23:00:08 GMT
2.20 - 2.50 in 5K ATM
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Post by Ton ⓉⓞⓃ on Dec 18, 2020 23:13:55 GMT
Ten mins after you I was quoted
2.1 for 16k
2.4 for 7k
Are Users thinking - " ... this is going to hit par before long I need to get some discount while it's still there" ?
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