|
Post by westonkevRS on Jan 21, 2014 20:01:01 GMT
Actually the monthly market isn't really a place to get long term uplifts from price spikes. As opposed to the longer markets where if you can catch a spike and get it from a long period, e.g. 5.8% on the 5-yr market, the monthly doesn't really work like that.
To answer some questions, they money is not lent for 30 days guaranteed. It is lent for between 1 and 30 days, and with the defaul option to reinvest it is then matched again with what could be 1 to 30 days again. If the average is 15 days and you lent for a year then you''ll have 30 matches not 12. It is designed for continuous roll-over reinvestment, but when you need it you can get it quickly. Maybe 30days, but more likely a lower period maybe even just 1 day....
So looking for spikes isn't that useful although it does improve the average so spikes are good for lenders. But really what should be looked at are the long term average rates, as these are an indication of potential return. In its way, this is the only uncertain returns product. But excellent for people with liquid cash that want a better than current account return, but with no strings and quick access.
So although it's called a monthly market, really it should be used for money with longer term potential. Not trader types looking for spikes (that should please Yorkshireman).
Kevin.
|
|
|
Post by westonkevRS on Jan 21, 2014 20:04:19 GMT
Planetx, I don't really think any informed lender thinks the market is or can be manipulated for short term trader gain. Some people just have a healthy cynicism of people involved in money, and who wouldn't after 2009. And the Internet gives a democratic voice to everyone ...
|
|
|
Post by westonkevRS on Jan 21, 2014 20:12:56 GMT
Maybe Kev doesn't like seeing higher rates (too far ahead of Zopa). Its interesting question. I as a lender want higher rates, and half our customers (the lenders) benefit from higher rates. But the other half (borrowers) benefit from lower rates and we are more likely subsequently to do more loans and hence increase fee totals. But then the market brings it back to a fair equilibrium (if only all P2P lenders were so democratic and in the hands of the customers ). So all is fair and the returns and APR set by the markets. What I think is right that our "risk premium" as an unregulated non bank non FSCS protected business isn't too high. And I honestly think the different between our 5.7% 5-yr return compared to our main competitor and the banks is too high. We should have the lowest risk premium over the banks of all the Alt Finance providers and one day even lower when we are perceived as even safer place for money! We have a dream.....
|
|
markr
Member of DD Central
Posts: 766
Likes: 426
|
Post by markr on Jan 21, 2014 20:16:01 GMT
Hi Kev, sorry to hijack this thread but as you're here can you confirm the bank account change I asked on another post. I want to transfer in some funds but I'm a bit nervous of it going into hyperspace
|
|
|
Post by davee39 on Jan 21, 2014 20:35:23 GMT
My plan is to set up a new transfer with the new number and then send £10. The new number is a valid account at Barclays. My £10 test is used where possible with all transfers to minimise problems caused by finger trouble at my end!
|
|
|
Post by westonkevRS on Jan 21, 2014 20:54:38 GMT
Hi Kev, sorry to hijack this thread but as you're here can you confirm the bank account change I asked on another post. I want to transfer in some funds but I'm a bit nervous of it going into hyperspace The bank account numbers are in the process of being changed, and there is a migration plan over the next two months. But the old numbers work and will continue to for some time, so don't worry. There was going to be an announcement shortly, I think tomorrow (Wednesday 22nd Jan), but I agree there could be confusion for older member lenders (like you and me) if the web is already advertising the new one. But for now, you're good for both and so there is no danger of money getting lost.... Kevin
|
|
markr
Member of DD Central
Posts: 766
Likes: 426
|
Post by markr on Jan 21, 2014 20:55:50 GMT
Thanks Kev
|
|
|
Post by bracknellboy on Jan 21, 2014 21:50:16 GMT
My plan is to set up a new transfer with the new number and then send £10. The new number is a valid account at Barclays. My £10 test is used where possible with all transfers to minimise problems caused by finger trouble at my end! very generous. I have always used £1. I guess your p2x bids are 10 time the size of mine as well.
|
|
|
Post by yorkshireman on Jan 22, 2014 11:13:54 GMT
And to Yorkshireman, this isn't city boys manipulating the market. Just the regular cycles of lending, new money deposits and reinvestment money that can be out of sync. These appear to cause small cycles that are the most volatile in the monthly market, and I believe might continue until we have instant credited BACs payments. An innocent explanation rather than sneaky day traders. I'd also be curious to know how exactly anyone could think that the rate is manipulated - what is the strategy and how does it work? The features that make it possible to manipulate (for example) Libor/Euribor just don't apply here, the rate is set only by supply and demand. Place several simultaneous borrowing requests at 1.5% or lower perhaps? I’ve no proof of that but as Westonkev says: “Some people just have a healthy cynicism of people involved in money, and who wouldn't after 2009.”
|
|
pikestaff
Member of DD Central
Posts: 2,136
Likes: 1,484
|
Post by pikestaff on Jan 22, 2014 12:18:54 GMT
Place several simultaneous borrowing requests at 1.5% or lower perhaps?
Which would have precisely no effect on rates, unless current rates are BELOW 1.5%. The only way to drive rates down is to offer to lend at lower rates. It's obvious that the flow of both borrowing requests and new money onto the platform will be lumpy and this will give rise to fluctuations. For example, I'd not be surprised if the flow of new money follows a monthly cycle, given that people are paid monthly. On the specific question of city boys, I'd expect a downward spike in rates when banker's bonuses are paid but that's not manipulation it's just new money on the platform
|
|
|
Post by yorkshireman on Jan 22, 2014 12:44:06 GMT
Place several simultaneous borrowing requests at 1.5% or lower perhaps?
Which would have precisely no effect on rates, unless current rates are BELOW 1.5%. The only way to drive rates down is to offer to lend at lower rates. It's obvious that the flow of both borrowing requests and new money onto the platform will be lumpy and this will give rise to fluctuations. For example, I'd not be surprised if the flow of new money follows a monthly cycle, given that people are paid monthly. On the specific question of city boys, I'd expect a downward spike in rates when banker's bonuses are paid but that's not manipulation it's just new money on the platform If the only borrowing requests are at 1.5% and if people are as desperate to lend as they would appear to be when they accept rates of 1.5%? Just a thought.
|
|
mikes1531
Member of DD Central
Posts: 6,452
Likes: 2,320
|
Post by mikes1531 on Jan 22, 2014 16:14:23 GMT
If the only borrowing requests are at 1.5% and if people are as desperate to lend as they would appear to be when they accept rates of 1.5%? Just a thought.
Looks like an opportunity here. Request a loan at 1.5%. If there are no takers, then no harm done. If there are takers, then take the loan and use the money to lend -- at RS!
|
|
|
Post by westonkevRS on Jan 22, 2014 19:08:33 GMT
Think people have a good understanding.
You could put in a borrower request at a silly low rate, but lender would come in. And if they did this would work for one loan only.... And by the time fees are added then the loan APR would be 4% plus. They'd then have to guarantee a return above this, no ,"trader" would ever do this. They could just go on IG Index and spread at 2bps rather than 250bps plus.
This wouldn't hurt other lenders as the next loan would revert back up to the majorities choice of lender rate.
The "traflder" could only do this once, as any subsequent applications would be identified and declined. The "sell out" function also has a cost, as reported by the "resident expert" on the original forum.
Basically you can't be a "trader" on RateSetter, it is impossible.
|
|
mikeb
Posts: 1,052
Likes: 463
|
Post by mikeb on Jan 22, 2014 19:15:33 GMT
very generous. I have always used £1. I guess your p2x bids are 10 time the size of mine as well. Just be careful not to trigger the bank's anti fraud systems. A test transfer of £1 out, followed by a wedge of £££££ is just what the bad guys do ... and do you trust a bank to spot the difference?
|
|
mikes1531
Member of DD Central
Posts: 6,452
Likes: 2,320
|
Post by mikes1531 on Jan 22, 2014 23:47:31 GMT
very generous. I have always used £1. I guess your p2x bids are 10 time the size of mine as well. Just be careful not to trigger the bank's anti fraud systems. A test transfer of £1 out, followed by a wedge of £££££ is just what the bad guys do ... and do you trust a bank to spot the difference? It probably doesn't make any difference, but I tend to use £12.34.
|
|