|
|
Post by Mr Baggy on Mar 19, 2016 16:27:14 GMT
With a fair chunk of cash tied up in p2p I'm wondering what may happen if we leave the EU,any thoughts.
|
|
ribs
Probably not James Marshall
Posts: 148 
Likes: 151
|
Post by ribs on Mar 19, 2016 18:36:06 GMT
Suffer? Possibly. If a pigeon farts outside the markets seem to react.
If we stay, things will probably pick up a little in a small way, as a sigh of relief; nothing is changing and this sillyness is behind us.
If we leave, there will be short term uncertainty, I don't want to say panic, as everything adjusts and deals with our European neighbors are made around trade and suchlike. The clever people will be smart enough to make the most of the ups and downs, as they always are. It'll be slightly more volatile than normal for a while, but ultimately it will be business as usual eventually.
How will it affect P2P investments? Well, as usual, it all depends. Ratesetter, for example, mostly loans to UK borrowers (I assume, I have no idea really). So as long as those borrowers don't all default because their jobs rely on us being in the EU, I guess it's all hunky dory.
Fact of the matter is: nobody really knows what will happen. Not really.
I personally have all my money buried in the garden. It's safer there as the gnomes protect it.
|
|
|
|
Post by wiseclerk on Mar 19, 2016 21:38:24 GMT
|
|
|
|
Post by westonkevRS on Mar 20, 2016 10:52:22 GMT
Ratesetter, for example, mostly loans to UK borrowers (I assume, I have no idea really). UK residents, you can be "foreign" living here and get a loan. There isn't actually a database that's available to tell us an applicants citizenship - the Home Office won't API that data, although you can get a visa overstay warning. But in reality you'd have to be quite permanent residence in UK to get a loan due to our strict lending policy, which requires historic residency longevity (except for mobile phone loans, which is more lenient). Kevin.
|
|
|
|
Post by thep2pinvestor on Mar 20, 2016 20:26:07 GMT
One issue could be the access to p2p platforms by non residents.
Today some UK platforms (a minority i believe) accept investors from the continent. The same applies for UK residents for some platforms on the Continent who accept foreign investors. In case of Brexit, the UK will not have access to EU markets anymore and vice-versa. So not sure what this means for cross-border investors on both sides.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,334
Likes: 11,558
|
Post by ilmoro on Mar 20, 2016 20:43:05 GMT
One issue could be the access to p2p platforms by non residents. Today some UK platforms (a minority i believe) accept investors from the continent. The same applies for UK residents for some platforms on the Continent who accept foreign investors. In case of Brexit, the UK will not have access to EU markets anymore and vice-versa. So not sure what this means for cross-border investors on both sides. I dont think overseas investors are restricted to Europe, they can be from anywhere, providing P2P is allowed in that country (US is the big exception) so Brexit shouldnt make any difference. The idea that UK wont have any access to EU markets isnt true, at worst they will be on MFN terms, but almost certainly much better.
|
|
ribs
Probably not James Marshall
Posts: 148
Likes: 151
|
Post by ribs on Mar 21, 2016 22:30:55 GMT
Ratesetter, for example, mostly loans to UK borrowers (I assume, I have no idea really). UK residents, you can be "foreign" living here and get a loan. There isn't actually a database that's available to tell us an applicants citizenship - the Home Office won't API that data, although you can get a visa overstay warning. But in reality you'd have to be quite permanent residence in UK to get a loan due to our strict lending policy, which requires historic residency longevity (except for mobile phone loans, which is more lenient). Kevin. Thanks Kevin, I was just using Ratesetter as a generic example, but it's nice to get clarification sometimes.
|
|
|
|
Post by propman on Mar 22, 2016 9:58:23 GMT
I think the impact prior to June could be significant. I am aware of a number of transactions that have stalled now and put back by 5 months or so while this is sorted out. I assume that investment decisions may be similar. This will put quite a lot of pressure on businesses that provide services or products that are used for business investment and transactions, so I expect our economic performance for the next 2 quarters to be less than predicted whatever happens. This makes us more vulnerable to global shocks and increases the likelihood of a significant slow down.
This uncertainty will be extended if we leave. I personally think it will be good for the country 5 years from now, but fully expect a significant recession before then. I think the out campaigners have misjudged the speed that a decent deal could be achieved with EU. Either we will have a sub-optimal relationship because the politicians here blink first and so we lose significant access while granting EU countries largely unfeterred access to our markets, or we will go a few years on MFN rates while we wait for the impact on French & German businesses to force their government to railroad the EU into a decent deal. I favour the latter, but it would require Cameron's successor to throw away reelection in 2020 (and hence probably any chance of ever being Prime Minister) as even if they manage a deal by the election the impact will not have been felt.
On P2P, downturns will harm businesses and property afterwards so expect defaults to increase. Money markets are also likely to react and we could also be required to raise interest rates thereby deepening the slow down. To effect P2C severely would take a more major slowdown so less likely but a genuine risk. Of course if Corbyn was elected all bets would be off...
- PM
|
|
max
Posts: 75
Likes: 47
|
Post by max on Mar 22, 2016 10:57:32 GMT
[...]
This uncertainty will be extended if we leave. I personally think it will be good for the country 5 years from now, but fully expect a significant recession before then. I think the out campaigners have misjudged the speed that a decent deal could be achieved with EU. Either we will have a sub-optimal relationship because the politicians here blink first and so we lose significant access while granting EU countries largely unfeterred access to our markets, or we will go a few years on MFN rates while we wait for the impact on French & German businesses to force their government to railroad the EU into a decent deal. I favour the latter, but it would require Cameron's successor to throw away reelection in 2020 (and hence probably any chance of ever being Prime Minister) as even if they manage a deal by the election the impact will not have been felt.
[...] I've been wondering about the deal the EU (Germany&France?) would want to cut after Brexit. Of course this is a multi billion pounds question and no one has a crystal ball, but some considerations can be made. It would be the first time a member of the union opts out and main reason given is "best economic interests". So, what would be the message to other EU countries if this prophecy turns to be true: a great deal is cut and UK prospers after leaving the EU? If I were the president of such a club I would do everything in my power to prevent this prophecy from being fulfilled. And I would be so forgiven and open to the return of the prodigal son once reason can be forced into his head. In other words, I have the impression that many consider the outcome of the referendum the end of the EU story and the start of a new beginning. I believe the referendum is the beginning of a long transition period with endless negotiations and pressures to think again and stay. Pressures will be successful only if directed to the heart of main reason for leaving "best economic interest". I see a seven thin cows coming from EU.. 
|
|
|
|
Post by ablrateandy on Mar 22, 2016 20:57:09 GMT
I was having a chat with a couple of other money market traders the other day about what propman mentioned. In the unlikely event of Brexit, sterling will get spanked. The traditional policy response to this is to raise short term rates.... but no developed country has done this in the current zero interest rate environment. I'd like to be a fly on the wall at the BoE's Markets Division meetings over the next few months. |
|
|
|
Post by ablrateandy on Mar 22, 2016 21:26:40 GMT
The risk, as ever, will be a few hedge funds getting short sterling and a few bigger players downsizing their gilt portfolios (a couple of central banks could put a real dint in the gilt market).
The obvious move, I guess would be to hike the overnight rates and flood the 1-5yr part of the curve with a new wave of QE to keep rates lower there. I think that the month before could see some big swings, largely stoked by hysteria!
|
|
|
|
Post by bracknellboy on Mar 22, 2016 21:42:54 GMT
I was having a chat with a couple of other money market traders the other day about what propman mentioned. In the unlikely event of Brexit, sterling will get spanked. The traditional policy response to this is to raise short term rates.... but no developed country has done this in the current zero interest rate environment. I'd like to be a fly on the wall at the BoE's Markets Division meetings over the next few months. A survey of over 700 global institutional investors and corporates by an IB was published today showed that the majority of investors (93%) have not yet materially changed their allocations in light of the referendum, with just 30% having hedged or made marginal adjustments, leaving the potential for more than 60% to start taking directional positions over the coming months. Despite that it's very noticeable that GBP/USD risk reversals (vol difference between 25 delta put vs call) for dates toward year end are at more extreme levels than the 2008 crisis. Macro hedge funds have anticipated the possibility for GDP/USD down to 1.20 in a Brexit scenario and made sure that funds/corporates that want to hedge are going to pay dearly. I'm pretty shocked how stupid corps and real money funds have been on this one; three months ago the hedge would have cost almost nothing. Most people I talk to are thinking a rate cut from the BoE is more likely, say 0% on repo and -0.5% on the depo rate. Of course it depends on exactly how much GBP depreciates on a trade-weighted basis and how disorderly the move is. To much depreciation, too quickly and a rate hike might be needed but that would likely be followed by cuts. The bottom-line seems a stagflation type scenario through most of 2017, with UK in recession. After initial portfolio outflows, current account would start to close from -4.2% of GDP to say -2%, helping to stabilize currency. : I have 100% confidence that you know what you are talking about. It all sounds both highly informative and highly informed. I on the other hand am half way through my second pint and have spent 4 hours driving, a good chunk of it in b*****y roadworks. For a simpleton such as me, could you confirm that the above two paragraphs are in agreement with ablrateandy 's synopsis that 'sterling will get spanked' ? If so i can go to bed later at least thinking that I'm not as stupid as I currently feel.
|
|
registerme
Member of DD Central
Posts: 6,624
Likes: 6,437
|
Post by registerme on Mar 22, 2016 21:56:40 GMT
Maybe more that "the risk that sterling will get spanked is real".
|
|
brin
I am trying to stay calm.
Posts: 379
Likes: 69
|
Post by brin on Mar 22, 2016 22:18:16 GMT
Baggy, in reality, no one knows definitively what will happen, if such people existed then we would have had prior warning of the 2008 collapse, everything is speculation, innuendo and inference, read post's and trust your gut feeling, no annalist or speculator can offer you better.
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Mar 22, 2016 22:36:43 GMT
Baggy, in reality, no one knows definitively what will happen, if such people existed then we would have had prior warning of the 2008 collapse, everything is speculation, innuendo and inference, read post's and trust your gut feeling, no annalist or speculator can offer you better. Not quite sure on this. There is probably someone somewhere who knows exactly what will happen. Finding that someone now, with months to go, amongst all the other views, is tricky. There are people around, including on this thread, who know a lot more about money / currency than I do, so trying to follow some of their logic to see if I think it stacks up can be helpful. My problem is, what steps could be taken to reduce the downside of the outcome of the vote for a 'normal'* person, ie derisk it? *Well, normal ish.
|
|
