ablender
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Post by ablender on Feb 17, 2016 19:32:19 GMT
I think SS's standard 12% is sticking out like a sore thumb as simply being too generous. It'd be great to have a debate - without rancour - whether we'd be better off with a lower percentage My favorite beach is too crowded in the summer. The solution is to have less sunshine. Okay, I'm being slightly tongue in cheek but it's logically in the same category. Since reducing the interest rate would mean less activity on both primary and secondary markets, I don't see how reducing interest rates would work. Primary market is designed for buyers. The secondary market is designed for sellers. Strikes me they both work pretty well. SS appear to be able to get good quality loans at 12% so let's stay there and see how the next three months pan out. There are many other things that might effect a change. Stock markets, Brexit, oil prices... I have a better one. If anyone is happy with a lower interest rate, they can pass on the difference to me. Thanks in advance.
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Post by jackpease on Feb 17, 2016 22:09:23 GMT
I have a better one. If anyone is happy with a lower interest rate, they can pass on the difference to me. Thanks in advance. Okay think of it another way. If Saving Stream 2 came along and with the same quality of loans with the same platform and the same management and same trust with loads of deals would i invest at 10%? Yes I would - using the money I can't invest in SS as it has become so popular. It's a bit like price-regulated goods in a communist state-run shop - the prices are great but the shelves are bare. All the Forum Fuss at the moment is about tinkering with the system but really it all comes down to deal flow - and that' ain't gonna increase without lowering rates. I'm terrified SS will listen to those wanting to change the wonderfully simple system - we'll get some costly complicated system that still doesn't work because it doesn't increase deal flow. Been there, done that with Assetz. >>>>What regulations are you referring to? Why would anyone be eligible for compensation? What "nobody told us it wasn't protected" protection are you referring to in this quote What i'm saying is that I predict that after the next crash, it'll be claimed that people were mis-sold P2P and all those who jumped dazzled by 12% and imagining there's no risk will lead to unwelcome claims and regulation against the P2P industry. Jack P
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mikes1531
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Post by mikes1531 on Feb 17, 2016 23:06:23 GMT
SS appear to be able to get good quality loans at 12%... The principal reason for this appearance is the SS track record isn't very long. AFAIK, there has been one known default, and the security was sold for enough to cover all outstanding debts, which is great. There are 24 other loans on the Repaid list that were closed successfully, but four of those don't count for a lot because they're still outstanding after having been closed and immediately reopened when they were extended. There are 58 loans on the Live list, of which 12 have a negative Remaining Term. So of the 33 (1 + (24-4) + 12) loans that have been, or should have been, closed by now, a dozen (36%) are overdue. Because of the way SS structure their loans, IMHO we can't say anything about the 46 loans that still are showing positive Remaining Terms. It's not uncommon for bridging loans to be late at repaying. SS have kept us informed about the status of all of the overdue loans, and haven't suggested that they're worried about any of them, so perhaps we shouldn't be worried either. Still, 36% strikes me as a large proportion of 'late' loans and I can't help but worry that some of those will turn out to be problems, particularly because we're still in the 'good' part of the economic cycle. Not to mention that we really haven't a clue about how the PF will work in practice. I have a significant investment with SS, and I truly hope it all turns out well, but IMHO it's still too early to draw any conclusion about the quality of SS's loans.
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ablender
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Post by ablender on Feb 18, 2016 6:48:45 GMT
I have a better one. If anyone is happy with a lower interest rate, they can pass on the difference to me. Thanks in advance. Okay think of it another way. If Saving Stream 2 came along and with the same quality of loans with the same platform and the same management and same trust with loads of deals would i invest at 10%? Yes I would - using the money I can't invest in SS as it has become so popular. It's a bit like price-regulated goods in a communist state-run shop - the prices are great but the shelves are bare. All the Forum Fuss at the moment is about tinkering with the system but really it all comes down to deal flow - and that' ain't gonna increase without lowering rates. I'm terrified SS will listen to those wanting to change the wonderfully simple system - we'll get some costly complicated system that still doesn't work because it doesn't increase deal flow. Been there, done that with Assetz. >>>>What regulations are you referring to? Why would anyone be eligible for compensation? What "nobody told us it wasn't protected" protection are you referring to in this quote What i'm saying is that I predict that after the next crash, it'll be claimed that people were mis-sold P2P and all those who jumped dazzled by 12% and imagining there's no risk will lead to unwelcome claims and regulation against the P2P industry. Jack P Thanks for your reply Jack. I did not hear anyone or read anywhere that P2P is with no risk. To the contrary there are many warnings on every platform that investing in P2P carries risk of loosing the invested money. Even here, on this forum, it has been mentioned in various threads that higher interest rates are required for riskier loans such as the bridging loans that we deal with in SS.
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Post by jackpease on Feb 18, 2016 9:51:34 GMT
I agree - the risk is being spelled out everywhere - you and i know it - but it'll all get reinterpreted after a crash. I base this on the endowment 'mis-selling' - i bought an endowment in the eighties and remember being told it could go up or down. Or Product warranties, or card protection. etc etc;. Now we get all these calls saying 'have you been mis-sold this that and the other - compensation available' Common sense told us that product warranties and card protection policies were a waste of money - now those of us who didnt' waste our money on them are compensating those that did. So my fear is that if there are any gift horses (SS) pulling in huge numbers of non-savvy investors, when it goes pop we all suffer! jack P (in edit) just seen Zopa's new offer - they use the term 'Safeguard' - lawyers could easily say that this misleads people into thinking their cash is safe!
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ablender
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Post by ablender on Feb 18, 2016 11:06:14 GMT
I agree - the risk is being spelled out everywhere - you and i know it - but it'll all get reinterpreted after a crash. I base this on the endowment 'mis-selling' - i bought an endowment in the eighties and remember being told it could go up or down. Or Product warranties, or card protection. etc etc;. Now we get all these calls saying 'have you been mis-sold this that and the other - compensation available' Common sense told us that product warranties and card protection policies were a waste of money - now those of us who didnt' waste our money on them are compensating those that did. So my fear is that if there are any gift horses (SS) pulling in huge numbers of non-savvy investors, when it goes pop we all suffer! jack P (in edit) just seen Zopa's new offer - they use the term 'Safeguard' - lawyers could easily say that this misleads people into thinking their cash is safe! But how, in such a scenario, do you see us (i.e. lenders) having to pay for other lenders?
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Post by jackpease on Feb 18, 2016 11:54:26 GMT
But how, in such a scenario, do you see us (i.e. lenders) having to pay for other lenders? Increased regulation costs as the regulator 'fixes' the problem - and self regulation and provision funds. The banks are shelling out massive amount in mis-selling compensation - in the end it is the consumer (us) that pays for all this I think this has come up in other threads where experienced lenders are comfortable with the risk and object to having to pay the 'levy' for provision funds Jack P
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ablender
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Post by ablender on Feb 18, 2016 13:40:30 GMT
But how, in such a scenario, do you see us (i.e. lenders) having to pay for other lenders? Increased regulation costs as the regulator 'fixes' the problem - and self regulation and provision funds. The banks are shelling out massive amount in mis-selling compensation - in the end it is the consumer (us) that pays for all this I think this has come up in other threads where experienced lenders are comfortable with the risk and object to having to pay the 'levy' for provision funds Jack P I understand the bank situation (and rightly so as they have abused) but I do not see how it applies here. In banks you have the fscs (or whatever the acronym is) that protects your investment. On some P2P platforms there is the provision fund which is to make up for when a security does not reach the required value not for mis-selling compensation. I have to admit that the provision fund is an important element that attracts me to SS. I do not see how this can lead to a mis-selling scenario. Regulation costs is always going to be part of financial activities. Without them we would have a wild-west system. On other platforms I did speak about the possibility of falling foul to regulations, but it was related to a very specific situation. Similarly here when I was talking about the valuation documents. In the cases that you are mentioning, I am not sure if I am getting the point.
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mikes1531
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Post by mikes1531 on Feb 18, 2016 15:39:04 GMT
In the cases that you are mentioning, I am not sure if I am getting the point. In the simplest terms, if people make bad decisions, they generally do not wish to accept that the fault is theirs. So they look around for someone to make a claim against. And even if there's very little merit in such a claim, there are lawyers who make their living by pursuing those claims. The cost of defending against such claims is not trivial, and that leads some of the 'accused' to settle because it costs less to do that than to go to court even though they'd probably win. Those defending/settling costs have to be paid by somebody, and they come out of the margins of the businesses affected, so ultimately they are paid by the businesses' clients/customers. It's an unfortunate aspect of the society we live in. (Though I don't suppose the lawyers and clients on the receiving end consider it unfortunate.) The Americans got into this situation first, but I don't think the we're very far behind.
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Post by Butch Cassidy on Feb 18, 2016 15:48:49 GMT
In the simplest terms, if people make bad decisions, they generally do not wish to accept that the fault is theirs. So they look around for someone to make a claim against. And even if there's very little merit in such a claim, there are lawyers who make their living by pursuing those claims. Good decisions are usually made from experience - that experience usually consists of making bad decisions & (hopefully) learning from them!
On the bright side those lawyers can usually fund their nefarious pursuits by borrowing from P2P platforms (& then defaulting on those loans) - #double whammy
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webwiz
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Post by webwiz on Feb 18, 2016 16:41:58 GMT
Both the lawyers and politicians are only interested in cases where huge numbers of people are involved. It seems that the validity of the case is not important. If enough people have been stupid/unlucky there are votes and compensation commission to be had. Therefore with under 10k investors SS is unlikely to attract their attention.
i see no difference between the situation where people have applied and got more than they can pay for and so default on the cash they owe SS, and the position where that amount of the loan was unsold. Therefore this will not,in itself, be a problem for SS - though the fact that they have not got the loan away might be if that were the case.
Having said that, I would like to see a curb on gaming and the simplest solution would be to restrict allocation to the amount of cash in the account - just like every other platform.
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mikes1531
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Post by mikes1531 on Feb 18, 2016 17:32:51 GMT
i see no difference between the situation where people have applied and got more than they can pay for and so default on the cash they owe SS, and the position where that amount of the loan was unsold. Therefore this will not,in itself, be a problem for SS - though the fact that they have not got the loan away might be if that were the case. The difference I see is that the amount allocated to the investor who defaults is then reallocated via the 'fastest finger first, winner takes all' method of the SM rather than the fairer (IMHO) method used for the PM in the first place. Having said that, I would like to see a curb on gaming and the simplest solution would be to restrict allocation to the amount of cash in the account - just like every other platform. To do that would mean SS giving up what may be the most significant advantage they have over the competition, namely the ability for investors to know what they've been allocated before having to pay for it. I really don't think they'd want to lose that, and I don't think their investors would either.
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ablender
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Post by ablender on Feb 18, 2016 18:15:55 GMT
In the cases that you are mentioning, I am not sure if I am getting the point. In the simplest terms, if people make bad decisions, they generally do not wish to accept that the fault is theirs. So they look around for someone to make a claim against. And even if there's very little merit in such a claim, there are lawyers who make their living by pursuing those claims. The cost of defending against such claims is not trivial, and that leads some of the 'accused' to settle because it costs less to do that than to go to court even though they'd probably win. Those defending/settling costs have to be paid by somebody, and they come out of the margins of the businesses affected, so ultimately they are paid by the businesses' clients/customers. It's an unfortunate aspect of the society we live in. (Though I don't suppose the lawyers and clients on the receiving end consider it unfortunate.) The Americans got into this situation first, but I don't think the we're very far behind. Thanks. Got it.
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webwiz
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Post by webwiz on Feb 18, 2016 18:43:41 GMT
i see no difference between the situation where people have applied and got more than they can pay for and so default on the cash they owe SS, and the position where that amount of the loan was unsold. Therefore this will not,in itself, be a problem for SS - though the fact that they have not got the loan away might be if that were the case. Yes a valid point and I agree but I was refuting the suggestion that the practice was a risk to the platform. Having said that, I would like to see a curb on gaming and the simplest solution would be to restrict allocation to the amount of cash in the account - just like every other platform. It's always difficult to take away goodies when the recipients have got used to them. But the price we pay for this useful feature is that gaming is uncontrolled and the allocation process is a shambles.
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SteveT
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Post by SteveT on Feb 18, 2016 21:32:49 GMT
It's far from a shambles. If you pay attention to previous loans and what's been launched recently you can work out with some precision what level to prefund. I was allocated within 10% of what I was looking for in all 4 loans (fractionally light on tranche C, a little over on A and D) and so had to sell none of it.
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