oldgrumpy
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Post by oldgrumpy on Jan 19, 2016 0:07:25 GMT
...provides liquidity not just to other people, but also to you. It's "socalised liquidity"
kermie I get my socialised liquidity by going to the pub ... just got back (burp)....  Cheers!
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webwiz
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Post by webwiz on Jan 19, 2016 8:20:41 GMT
Let me get this straight. If I put £100 into the QAA about £30 will be loaned out at about 11-12% generating £3.75 interest and the other £70 or so will sit earning nothing but providing liquidity to other people? Here's an idea. Why don't I just lend £30 and put the other £70 working somewhere else? I did chuckle. You'd use the QAA because with the QAA you ought to be able to get your full £100 out pronto, not just your 'non-loaned' £70. Usual caveat about "normal market conditions", etc...i.e. clearly this breaks down if there is a "run on the bank". In fact, I see this happening with my swept-funds all the time now - in/out/in/out with virtually no delay as my MLIA purchases stuff via swept-funds that were (a second ago) sitting in the QAA. At a new loan drawdown, my total swept-funds could be gobbled up by that new loan instantaneously. Edit: oh - and the provision fund is another reason. Another edit: it's important to realise that this model of your uninvested £70 provides liquidity not just to other people, but also to you. It's "socalised liquidity". I suppose that's the way AC intended it to be used when it was capped at £1m but it seems to have attracted money which is using it as a deposit account. The QAA would only provide liquidity for £30 in my example, the other £70 I could have kept as cash at the outset, earning c2% in an instant access FSCS account which is not dependent on any loans being repaid and from which money could be transferred into MLIA the same day which is just as good as instantaneously.
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SteveT
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Post by SteveT on Jan 19, 2016 8:30:14 GMT
I did chuckle. You'd use the QAA because with the QAA you ought to be able to get your full £100 out pronto, not just your 'non-loaned' £70. Usual caveat about "normal market conditions", etc...i.e. clearly this breaks down if there is a "run on the bank". In fact, I see this happening with my swept-funds all the time now - in/out/in/out with virtually no delay as my MLIA purchases stuff via swept-funds that were (a second ago) sitting in the QAA. At a new loan drawdown, my total swept-funds could be gobbled up by that new loan instantaneously. Edit: oh - and the provision fund is another reason. Another edit: it's important to realise that this model of your uninvested £70 provides liquidity not just to other people, but also to you. It's "socalised liquidity". I suppose that's the way AC intended it to be used when it was capped at £1m but it seems to have attracted money which is using it as a deposit account. The QAA would only provide liquidity for £30 in my example, the other £70 I could have kept as cash at the outset, earning c2% in an instant access FSCS account which is not dependent on any loans being repaid and from which money could be transferred into MLIA the same day which is just as good as instantaneously. But, playing devil's advocate, the £30 you invested in the MLIA could find itself locked in for an extended period without warning when AC send you a nice email announcing some loan problem or other. Which is not a problem if you're investing for the medium term but is if you're wanting "guaranteed" instant access to the whole lot.
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sl75
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Post by sl75 on Jan 19, 2016 9:47:26 GMT
I suppose that's the way AC intended it to be used when it was capped at £1m but it seems to have attracted money which is using it as a deposit account. The QAA would only provide liquidity for £30 in my example, the other £70 I could have kept as cash at the outset, earning c2% in an instant access FSCS account which is not dependent on any loans being repaid and from which money could be transferred into MLIA the same day which is just as good as instantaneously. But, playing devil's advocate, the £30 you invested in the MLIA could find itself locked in for an extended period without warning when AC send you a nice email announcing some loan problem or other. Which is not a problem if you're investing for the medium term but is if you're wanting "guaranteed" instant access to the whole lot. OTOH, the £30 invested indirectly via the QAA *could* find itself locked in for an extended period without warning. AC make no guarantees about liquidity in the QAA (other than relative to the other accounts), they merely strongly imply it. For those who absolutely require liquidity, and cannot tolerate funds being "locked in", none of the investment accounts are suitable - only FSCS-backed deposit accounts will do. I do wonder, however, whether when the liquidity crisis hits (or the possibility of it becomes highlighted by consumer groups / regulators / etc.) whether this might trigger something along the lines of the recent misselling scandals, with AC required either to provide the necessary liquidity from its own funds, or to obtain the necessary licences and FSCS cover for the QAA in the same manner as others who provide quick access deposit accounts backed by longer-term loans.
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Post by chris on Jan 19, 2016 9:59:32 GMT
I did chuckle. You'd use the QAA because with the QAA you ought to be able to get your full £100 out pronto, not just your 'non-loaned' £70. Usual caveat about "normal market conditions", etc...i.e. clearly this breaks down if there is a "run on the bank". In fact, I see this happening with my swept-funds all the time now - in/out/in/out with virtually no delay as my MLIA purchases stuff via swept-funds that were (a second ago) sitting in the QAA. At a new loan drawdown, my total swept-funds could be gobbled up by that new loan instantaneously. Edit: oh - and the provision fund is another reason. Another edit: it's important to realise that this model of your uninvested £70 provides liquidity not just to other people, but also to you. It's "socalised liquidity". I suppose that's the way AC intended it to be used when it was capped at £1m but it seems to have attracted money which is using it as a deposit account. The QAA would only provide liquidity for £30 in my example, the other £70 I could have kept as cash at the outset, earning c2% in an instant access FSCS account which is not dependent on any loans being repaid and from which money could be transferred into MLIA the same day which is just as good as instantaneously. If that system works for you then great, we're more than happy for you to do it that way. We don't expect every AC account and method of investing to appeal to every single lender - different people are looking for different things and we have a range of offerings (that will grow over time) to accommodate a wide and diverse range of lenders. The QAA is optimised around liquidity and goes to great lengths to ensure that it is provided at all times, even though it cannot be guaranteed. The sweep function was built on top of this taking advantage of the (near) instantaneous release of funds to allow lenders to invest and withdraw on demand as other accounts have spare cash. I believe that's a first in P2P, possibly even in the financial sector full stop, and has proven to be much in demand. We have a great technical basis through the implementation of the QAA and sweep function to do other interesting accounts in the future. QAA, GBBA, and GEIA are all also hands off solutions. Not everyone has time to log in several times a day and shuffle funds around as needed, and those investment accounts cater to those lenders. They also have provision fund protection on top of the asset security which gives peace of mind to those that like provision funds and an extra layer of protection on accounts where lenders aren't choosing individual loans to invest in. MLIA is designed to help them as well through the elimination of fastest finger first (or fastest puzzle solver) whilst still giving the lenders who want full control the ability to micromanage their holdings. Lenders are still expected to invest their time in carefully reading and understanding each loan proposition and judging each on its merits. We have some upgrades to the MLIA in the pipeline to give some more tools and control as well to try and keep that segment of users happy. The beauty of the way the market has been set up to work is that all these investment solutions allow you to invest in the same loans in the same market, so you can choose the strategy that you want and that works for you. Others will choose different strategies that work for them.
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Post by bracknellboy on Jan 19, 2016 10:20:20 GMT
Or indeed choose a mix of strategies. My primary interest is in the MLIA, but given a shortage of loans coming through and the slicing off of loans to support the other accounts, I've ended up also putting a chunk into the GBBA, which I never expected to do. Using combination of the QAA, GBBA and MLIA I now have more than double the money on the platform than I had or would have if I had restricted to the MLIA.
Whether the returns on a pure QAA strategy properly reflect the platform risk is a moot point.
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caesium
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Post by caesium on Jan 19, 2016 13:11:57 GMT
Has the QAA cap been hidden? Now it just says "open for investment".
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SteveT
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Post by SteveT on Jan 19, 2016 13:24:18 GMT
Has the QAA cap been hidden? Now it just says "open for investment". Yup, it appears that chris has doffed his cap
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jo
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Post by jo on Jan 19, 2016 13:53:15 GMT
Has the QAA cap been hidden? Now it just says "open for investment". Yup, it appears that chris has doffed his cap The change seems to have fried the 'down arrows' for Loan Book, Reports, and Account Information (at least for me).
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Post by chris on Jan 19, 2016 14:09:40 GMT
Yup, it appears that chris has doffed his cap The change seems to have fried the 'down arrows' for Loan Book, Reports, and Account Information (at least for me). I've flagged this to the dev team to make sure they all still work.
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oldgrumpy
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Post by oldgrumpy on Jan 19, 2016 14:10:32 GMT
Yep. I can't look at the empty upcoming loans list any more  |
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sl75
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Post by sl75 on Jan 19, 2016 14:12:56 GMT
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jan 19, 2016 14:16:03 GMT
Yep. I can't look at the empty upcoming loans list any more I was hoping I couldnt because they were busy populating it with £8m worth of goodies. Unfortunately not
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SteveT
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Post by SteveT on Jan 19, 2016 14:16:17 GMT
Phew. With £8m of upcoming loans still to appear by midnight, it's like waiting for Santa again 
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sl75
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Post by sl75 on Jan 19, 2016 14:19:39 GMT
Phew. With £8m of upcoming loans still to appear by midnight, it's like waiting for Santa again Maybe like Santa, they won't come if we keep peeking?
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