am
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Post by am on Jan 4, 2016 15:55:09 GMT
Monthly rates spiked to 10% this afternoon just after 1500 or thereabouts. I managed to stick some short term money in at 4.3%, provided it progresses beyond matched. The market is looking very thin at the moment, as opposed to £2m borrowers and £1.3m lenders earlier today.
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Post by p2plender on Jan 4, 2016 16:00:20 GMT
£2 million pound shortfall this morning. Most I've ever seen. Not sure if it's a concern.
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Investboy
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Post by Investboy on Jan 4, 2016 16:14:25 GMT
I've logged in this morning and noticed on 1month there was £2M+ chasing £1.1M of funds. That meant that all orders will get filled irrespective of rate.
There was even one for 99% (albeit tiny). And it is gone now.
I put mine on 7% and it got filled. What a shame it was only £30.
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investibod
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Post by investibod on Jan 4, 2016 16:27:13 GMT
I saw the 2 million demand this morning and moved across some money that has waiting in the 5 year queue for rates to improve. I got 3.8%. Just wished I had been a bit more ambitious.
If I understand correctly, most of the money lent in the monthly market is actually used to provide 1 year+ loans, so when we lend money in the one month market, are we actually lending to RS themselves to then lend out over a longer period? Or is the 1 year+ loan actually reformed every month?
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adrianc
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Post by adrianc on Jan 4, 2016 16:38:25 GMT
I saw the 2 million demand this morning and moved across some money that has waiting in the 5 year queue for rates to improve. Five year queue exploded this morning - I'd got some waiting for 6.4%, which had got to <£100k from a match. It was suddenly about a mill away...
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alender
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Post by alender on Jan 4, 2016 18:20:11 GMT
£2 million pound shortfall this morning. Most I've ever seen. Not sure if it's a concern. From the outside it is difficult to predict what will happen if there is a shortfall by EOD, as I understand it a lot of this money is used to finance loans of up to 2 years. Hopefully RS have a plan which does not include locking in monthly contracts until there is enough money to cover the shortfall (this could be a disaster). For me the worrying part is this happening when the financial markets are stable and also people may think it is a good place to put monthly money while the rates are good but if there are issues could end up getting locked in for up to 2 years.
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Post by westonkevRS on Jan 4, 2016 20:06:30 GMT
There was even one for 99% (albeit tiny). And it is gone now. The CEO of a rival will be please to see his money lent at last..... That's how he kept tabs on our market liquidity! Kevin.
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Post by westonkevRS on Jan 4, 2016 20:32:03 GMT
Comrades,
Keep calm and keep lending!
The situation was due to today being the first working day after a number of bank holidays and weekends, combined with the first of the month. Probably the largest monthly volume day we've ever had. An unprecedented situation for RateSetter
Also normally if it's a working day we can smooth out such demands by calling on some larger friendly lenders, including RateSetter RMM Ltd as a backstop. Marketing are always keen to run a promotion....But as this all cascaded just this morning the platform had to work itself.
And actually everything was fine. The markets were virtually depleted before our wonderful lenders saw the rates on offer and dived in. RMM Ltd might have put a small amount, but I'm not sure how much if any. RateSetter does have "skin in the game".
As a result it hardly registered internally, we were quite relaxed. In fact the market already has £339k in the monthly market as I write...
We fully recognise the impact on brand and lender trust if ever had to perform a lock-in. But the T&Cs allow it for that emergency.
Kevin.
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Post by moneyball on Jan 4, 2016 21:06:00 GMT
Comrades, Keep calm and keep lending! The situation was due to today being the first working day after a number of bank holidays and weekends, combined with the first of the month. Probably the largest monthly volume day we've ever had. An unprecedented situation for RateSetter Also normally if it's a working day we can smooth out such demands by calling on some larger friendly lenders, including RateSetter RMM Ltd as a backstop. Marketing are always keen to run a promotion....But as this all cascaded just this morning the platform had to work itself. And actually everything was fine. The markets were virtually depleted before our wonderful lenders saw the rates on offer and dived in. RMM Ltd might have put a small amount, but I'm not sure how much if any. RateSetter does have "skin in the game". As a result it hardly registered internally, we were quite relaxed. In fact the market already has £339k in the monthly market as I write... We fully recognise the impact on brand and lender trust if ever had to perform a lock-in. But the T&Cs allow it for that emergency. Kevin.
I don't know if this is related or not but I notice that about £3m has been sold out in less then a week. I believe the rough average is £700k.
Would this have any influence/impact on any of this?
Regardless, lets hope that people aren't all running towards the RS exit doors at once!
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Post by westonkevRS on Jan 4, 2016 21:52:21 GMT
Lets hope not, but I can't think why there would by a rush for the exit. Performance is good, the Provision Fund is the largest in absolute terms it's ever been and there are not any silly rumours doing the rounds (which I'm sure there will be one day). Certainly it was calm in the office, we only briefly mentioned it with the Finance team.
Just a crazy first day back in the office. Looking forward to the rest of 2016....
Kevin.
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alender
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Post by alender on Jan 4, 2016 23:20:43 GMT
Keep calm and keep lending! . . . As a result it hardly registered internally, we were quite relaxed. In the event of a crisis I hope the RS office will not resemble something like the Dinner in Carry on up the Khyber.
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Post by chielamangus on Jan 5, 2016 14:18:52 GMT
I saw the 2 million demand this morning and moved across some money that has waiting in the 5 year queue for rates to improve. I got 3.8%. Just wished I had been a bit more ambitious. If I understand correctly, most of the money lent in the monthly market is actually used to provide 1 year+ loans, so when we lend money in the one month market, are we actually lending to RS themselves to then lend out over a longer period? Or is the 1 year+ loan actually reformed every month? RS control the monthly market as best they can. They are the monopoly buyer of one month money, and they use it in the medium term markets. It is often not a one month term but can vary in my experience between 25 and 40 days - depends what RS judges their future needs will be. Obviously, yesterday they got it spectacularly wrong, which I am very happy about. I have argued before that the monthly market is not a fair one, with large numbers of sellers and just the one buyer. Naturally, RS dispute this, without being able to deny the market fundamentals. This was the subject of a thread about a year ago (but have no idea how to find it or show the link even if I could).
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oldgrumpy
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Post by oldgrumpy on Jan 5, 2016 14:30:47 GMT
So is that the way RS "finds" so called borrower offers in 1,3,5 year markets, usually one or two points below the lowest real lender offer, which enables them to place a manipulated "rate to lend right now" on display, which draws naive non-"expert" lenders in, thus producing a lower rate for others to undercut (if they wish) to be first in the queue to lend, which in turns lowers the lending rate range for the day which (we are told) provides an average on which to base the next day's (so called) Market Rate, which RS immediately undercuts by the same process?
Edit: and on 6 January on 5 year, MR is (perfectly reasonably) set at 6.0%, a few have undercut to 5.5%, one rogue outlier has offered about £877 at 5.0%, so RS magically finds "borrowers" who are offering 4.8%, so RS in large font tell the unknowing that the "rate to lend right now" is 4.8%. Strange process, isn't it? If I offer £1000 at 4.8%, I wonder if the fact that £123 will remain unmatched (for a while) and trigger an immediate discovery of a borrower who wants to offer 4.7% so that the "lend it now" rate drops again (at sub-Zopa rates, as it happens.
Yes, I have plenty in RS and I like the way it serves me, but only because I have learnt how wayward its operation is, and because by careful observation I can avoid some of its non-market induced fluctuations.
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