is
Posts: 108 
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Post by is on Mar 12, 2015 19:56:54 GMT
To clarify, "beyond reason" was meant as "significantly outside the no-arbitrage price envelope for equivalent/better risk profiles available on other platforms". That's all very well but it is your assessment and you act accordingly for your own funds. One cannot naively assume a similar level of rationality for all other market participants and there may be returns to the odd show of 'strategic irrationality' - if the result is that competitors shift some funds into property loans or bugger off to another platform then it may have some useful purpose. True, and I by no means assume that all participants are acting rationally and are in possession of the same information - they demonstrably are not, and this is what makes the game interesting. Merely pointing out that there are lots of alternatives available. Personally, I like higher carry but beyond this I don't mind the yield level - so long as it is nicely volatile and mean reverting  .
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Post by GSV3MIaC on Mar 13, 2015 12:53:28 GMT
In particular, many autobid users have no rationality at all, which is how we came to have MBRs (other than 4%) in the first place. As long as FC keep churning out sub-£100k loans by the bucketfull, autobid will keep driving the rates down to near MBR levels in most cases (and it's the wrong time on the month/year for early closers IIRC).
I wish I believed strategic irrationality would result in a large exflux of funds, but no sign of it yet .. we do have the two biggest players going fishing in lower grade loans than they used to bother with, but that's about all.
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