ben
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Post by ben on Mar 1, 2016 23:43:15 GMT
I think if they never pay then they do not get the interest but there is nothing stopping someone buying a £1000 worth for example keeping it for two days and then selling something else to clear the balance and then do it again a few days later I pity the poor folks who would do all that in order to earn 30p on those days when they're overdrawn by £1k at midnight. The phrase 'get a life' comes to mind!  Is there a Gamers Anonymous? Where do I go to sign up?  I could not be bothered either but I bet some can
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mikes1531
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Post by mikes1531 on Mar 1, 2016 23:46:34 GMT
I think if they never pay then they do not get the interest but there is nothing stopping someone buying a £1000 worth for example keeping it for two days and then selling something else to clear the balance and then do it again a few days later In that scenario would they get interest for those two days on £2000? : No. They'd earn interest for two days on £1000, which would be 66p. Hmmm. Maybe it would be worth it for £10k. The risk is that when the time comes to sell you're stuck in a long queue of sellers, can't sell quickly, and end up in SS's bad books.
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oldgrumpy
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Post by oldgrumpy on Mar 1, 2016 23:50:29 GMT
Can someone explain what 'gaming' actually means? In previous threads I've understood gaming to mean asking for a lot more than you actually want in prefunding to get what you do actually want. In this thread 'gaming' seems to be trying to get interest without paying for any loans (which SS say they don't do)? Primarily, gaming is a term used by us investors where we "game" the PM pre-funding allocation for >1m loans. All these loans you get a % of your allocation, so we game the system by second guessing how much over funded the pre-fund loan is. So if we guess that the pre-fund loan is 2x overfunded, but we want £5000, then we would set our pre-funding to £10,000. However, in this post, I am referring to where it seem some investors are gaming the SM, where they are investing in everything that comes onto the SM, then sells the same investments back onto the SM 48hrs later (or lets SS do it) to benefit from the interest. There seems to be some confusion whether or not interest is indeed paid in this scenario, but in any case, SS have confirmed they are having to place investments back onto the SM because investors have not settled a negative balance. As such, there are cases where there are 100s of thousands (sometimes millions) which are "floating", not earning interest for genuine investors. Oh sh*te! Trust me to misunderstand. I thought you were all on about the activities of one of our oriental members who... errr... "bats for the other side" .... you know, the happy community. Ummm! Gay Ming. I'd better have my cocoa 
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 1, 2016 23:52:51 GMT
Primarily, gaming is a term used by us investors where we "game" the PM pre-funding allocation for >1m loans. All these loans you get a % of your allocation, so we game the system by second guessing how much over funded the pre-fund loan is. So if we guess that the pre-fund loan is 2x overfunded, but we want £5000, then we would set our pre-funding to £10,000. However, in this post, I am referring to where it seem some investors are gaming the SM, where they are investing in everything that comes onto the SM, then sells the same investments back onto the SM 48hrs later (or lets SS do it) to benefit from the interest. There seems to be some confusion whether or not interest is indeed paid in this scenario, but in any case, SS have confirmed they are having to place investments back onto the SM because investors have not settled a negative balance. As such, there are cases where there are 100s of thousands (sometimes millions) which are "floating", not earning interest for genuine investors. Oh sh*te! Trust me to misunderstand. I thought you were all on about the activities of one of our oriental members who... errr... "bats for the other side" .... you know, the happy community. Ummm! Gay Ming. I'd better have my cocoa BEHAVE YOURSELF oldgrumpy !
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goopy
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Post by goopy on Mar 1, 2016 23:54:27 GMT
Primarily, gaming is a term used by us investors where we "game" the PM pre-funding allocation for >1m loans. All these loans you get a % of your allocation, so we game the system by second guessing how much over funded the pre-fund loan is. So if we guess that the pre-fund loan is 2x overfunded, but we want £5000, then we would set our pre-funding to £10,000. However, in this post, I am referring to where it seem some investors are gaming the SM, where they are investing in everything that comes onto the SM, then sells the same investments back onto the SM 48hrs later (or lets SS do it) to benefit from the interest. There seems to be some confusion whether or not interest is indeed paid in this scenario, but in any case, SS have confirmed they are having to place investments back onto the SM because investors have not settled a negative balance. As such, there are cases where there are 100s of thousands (sometimes millions) which are "floating", not earning interest for genuine investors. Oh sh*te! Trust me to misunderstand. I thought you were all on about the activities of one of our oriental members who... errr... "bats for the other side" .... you know, the happy community. Ummm! Gay Ming. I'd better have my cocoa I don't think you can talk like that in PC land 
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goopy
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Post by goopy on Mar 2, 2016 0:07:41 GMT
Hmm, just after midnight and there's a shed load of money on the SM. Some cynics would say it was a little suspicious....
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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 Mar 2, 2016 0:34:43 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 Mar 2, 2016 0:56:20 GMT
Oh sh*te! Trust me to misunderstand. I thought you were all on about the activities of one of our oriental members who... errr... "bats for the other side" .... you know, the happy community. Ummm! Gay Ming. I'd better have my cocoa I don't think you can talk like that in PC land As usual, he's probably talking about one of his relatives. Here's a picture  And we all know oldgrumpy doesnt have a PC.... He uses a laptop 
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freddy
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Post by freddy on Mar 2, 2016 1:25:52 GMT
Well, it's early morning here in the LOS and I'd like to thank each and every one of you for starting my day with such an entertaining read. I've spat my coffee out several times.  |
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Sr. Lobo
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Post by Sr. Lobo on Mar 2, 2016 6:45:03 GMT
I think there is a simple solution. No interest payments for loans not credited before selling.
Also the cheater can be banned for a while.
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sl75
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Post by sl75 on Mar 2, 2016 9:41:13 GMT
It seems to me that the fundamental problem is the mismatch on settlement times between buyers and sellers that necessitates a de-facto loan from SS to the buyer in the first place. Just as with normal stocks and shares, it would presumably be possible to have a separate "strike date" (when buyers and sellers are matched) and "settlement date" (when the buyers funds are actually transferred to the seller). So, if a new loan went live today, the interest would start accruing from Friday. Fresh money to invest in the loan would need to arrive by Friday (as at present), but no "loan from SS funds" would be necessary during those 2 days. If loan parts are sold to cover the purchase, these would also have Friday as the settlement date, so the seller would continue to get interest during those 2 days (from their existing loan parts), and the buyer would similarly have 2 days to introduce funds and/or sell loan parts. If, on Friday morning, any of the buyers have NOT paid for their loan parts, SS would, as at present, place the remaining loan units up for sale. However, these can now be on a "cash only basis". It should also be written into the terms that for unpaid loan units SS can, at their absolute discretion, offer ANY of your loan parts for sale to cover the debt (in case the loan you bought isn't very liquid on a cash-only basis). As many investors appreciate and use INPL, this could still be offered in a much more limited form even for the loans offered on a "cash only basis", but these limits could be much tighter, as only a minority of sales would be using that system now. There could also be an explicit fee for use of this service, maybe 0.1% of the amount purchased - enough to make the "invest, but don't bother paying" strategy visibly unprofitable even for people not aware that they don't really get to keep the interest. The system would need some way to differentiate between sales on 2-day settlement terms and those on a "cash only" basis, but it avoids the possibility of interminable delays where Alice doesn't pay, then Bob picks up her units on the SM and doesn't pay either, then Carol, then Dave, etc... The main benefit for savingstream would be a greater degree of certainty that funds would in fact be available when required to draw down on Friday. |
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jayjay
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Post by jayjay on Mar 2, 2016 10:04:18 GMT
It seems to me that the fundamental problem is the mismatch on settlement times between buyers and sellers that necessitates a de-facto loan from SS to the buyer in the first place. Just as with normal stocks and shares, it would presumably be possible to have a separate "strike date" (when buyers and sellers are matched) and "settlement date" (when the buyers funds are actually transferred to the seller). So, if a new loan went live today, the interest would start accruing from Friday. Fresh money to invest in the loan would need to arrive by Friday (as at present), but no "loan from SS funds" would be necessary during those 2 days. If loan parts are sold to cover the purchase, these would also have Friday as the settlement date, so the seller would continue to get interest during those 2 days (from their existing loan parts), and the buyer would similarly have 2 days to introduce funds and/or sell loan parts. If, on Friday morning, any of the buyers have NOT paid for their loan parts, SS would, as at present, place the remaining loan units up for sale. However, these can now be on a "cash only basis". It should also be written into the terms that for unpaid loan units SS can, at their absolute discretion, offer ANY of your loan parts for sale to cover the debt (in case the loan you bought isn't very liquid on a cash-only basis). As many investors appreciate and use INPL, this could still be offered in a much more limited form even for the loans offered on a "cash only basis", but these limits could be much tighter, as only a minority of sales would be using that system now. There could also be an explicit fee for use of this service, maybe 0.1% of the amount purchased - enough to make the "invest, but don't bother paying" strategy visibly unprofitable even for people not aware that they don't really get to keep the interest. The system would need some way to differentiate between sales on 2-day settlement terms and those on a "cash only" basis, but it avoids the possibility of interminable delays where Alice doesn't pay, then Bob picks up her units on the SM and doesn't pay either, then Carol, then Dave, etc... The main benefit for savingstream would be a greater degree of certainty that funds would in fact be available when required to draw down on Friday. I agree with you about this mismatch between buying and selling that creates unnecessary risk. The mismatch is even worse than that because unlike a stock market settlement period it is NOT an obligation to buy it is an OPTION to buy with no limit. That to me is an extraordinarily risky scenario.
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Post by GSV3MIaC on Mar 2, 2016 10:22:38 GMT
And unlike the stock market, the deal can only be done at a fixed price, which IMO is the cause of a lot of the problem (I might buy some (extra) of the stuff currently on the SM, if there was some incentive to do so).
I wonder if SS delayed releasing 'unpaid' parts until February's interest had hit the accounts (else the SM pile would be £700k higher). Of course we do have some repayments due ..
Now where's the SS ISA - that should generate a few more investments (well it would from me, at least).
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 2, 2016 10:27:32 GMT
And unlike the stock market, the deal can only be done at a fixed price, which IMO is the cause of a lot of the problem (I might buy some (extra) of the stuff currently on the SM, if there was some incentive to do so). I wonder if SS delayed releasing 'unpaid' parts until February's interest had hit the accounts (else the SM pile would be £700k higher). Of course we do have some repayments due .. In principle, I would be quite happy if SS held the unpaid investments back until the 1st of the month, so that it's easier to reinvest our interest. However, my opinion of this is entirely dependent on what happens to the interest in that period; do they keep it (hope not, as it would be open for abuse) or maybe it goes towards the provident fund?
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Post by GSV3MIaC on Mar 2, 2016 10:30:37 GMT
Well they should keep it, since it'd be their money which is on loan, until someone pays for the parts. They could also (as already suggested) try to time new loans, or new tranches of old ones, to pick up the slack, given how relatively in-elastic the SM is, and how all the interest appears on the same day.
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