acky
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Post by acky on Nov 7, 2016 9:07:49 GMT
I suspect (and hope!) that most people canny enough to think about changing their Autobid settings after a change in PM rates would be too canny to be using Autobid on the SM in the first place! On my one and only brief experiment with Autobid, I made sure it didn't buy on the SM as I didn't want soiled cast-offs from you lot!
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nick
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Post by nick on Nov 7, 2016 9:26:31 GMT
I believe that most investors don't set use the advanced settings and the standard autobid rates for the SM default to the primary market rate.This is true when Autobid is first set up, but after that I believe you have to use the advanced settings to alter the rates on the SM. FC have no authority to alter the rates investors bid at, nor would they want to do it. Consider at the warning on the Autobid page about the need to update settings after an interest rate change. Consider also that the Autobid function in the platform does not apply rates when purchasing on the PM and just buys anything, so there is no change required to Autobid settings for any investor when PM rates change. Rates are applicable only to the SM, and they are not going to go through all the Autobid investors, decide whether each SM rate has been made by default or choice, and change those which they believe have been made by default, unilaterally and without telling the investor. I believe that few Autobidders will reset their rates through the advanced settings and old loans will go at par (which is what FC want to happen for Autosale).
Looks like I was wrong re the rates that the default autobid bids at in the SM. I just called FC and they told me that if you switch autobid on and don't touch the advanced settings, it will take up any loan in the SM that is listed at par, ie no minimum rates are set.
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blender
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Post by blender on Nov 7, 2016 9:40:50 GMT
Wow! Thanks Nick. Looks like my understanding was also a bit wrong. I suppose we should never over-estimate the intelligence of Autobid. What they are doing here is quietly providing a means of selling any old loan at par - so that liquidity is still there for old loans however rates have changed. It looks like one should never use basic Autobid. I imagine it is par only - not even a discount. It is only when you set a rate on the advanced settings that Autobid can judge a discount. So if you want Autobid to buy, set at par. Your would probably get fewer potential buyers at a discount. We have learned something already today, Nick, thanks to your raising it.
Edit. This also means that the strategy of buying property and selling before the endgame will work if one is prepared to accept par as a minimum.
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acky
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Post by acky on Nov 7, 2016 10:14:13 GMT
The assumption that Autobid will buy up anything at par is predicated on there being sufficient Autobid funds to do so and FC not curtailing its activity. In recent weeks/months, Autobid has gobbled up anything I've put on the SM at par in a matter of seconds (or minutes at worst), but I remember times past when it would buy property parts at par only very slowly if at all (something which was bemoaned at length on this forum). The view then was that FC was severely limiting what Autobid would buy on the SM. Indeed, this has to make sense from FC's perspective in managing their business - yes, they want SM liquidity, but they also want PM loans to fill, so if Autobiddy pockets are bursting with cash, it will be given a free hand, but if available cash is more limited, then we should expect less SM liquidity. Presumably of late, there has been more lender cash than borrower demand, but will this be the case now that the lower rates on A+/A will presumably bring in more loans but reduced investor appetite? Something to keep your eye on, I think, if you are assuming you can always offload at par.
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blender
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Post by blender on Nov 7, 2016 11:16:33 GMT
Quite right, Acky. And Autobid will buy only one part in a property project. I think FC also in the past distorted the market with the cashback on property and did not want that taking up cash from the SM at par. We do have to expect them to furtively Fiddle Covertly when they need to.
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bigfoot12
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Post by bigfoot12 on Nov 8, 2016 10:29:20 GMT
It is interesting how much FC are steepening the curve with these. samford71 makes some good points about coming inflation in the inflation thread elsewhere on this forum. I guess that Trump/Brexit (etc) uncertainty might steepen the curve from a credit point of view as well as inflation. Does anyone have any thoughts about how much greater impact a sharp downturn might have on D and E loans vs A+ and A loans compared to expected default rates? Not directly, but you could look at p2pindependentforum.com/post/150457and draw some scary conclusions. You and metoo make some good points. Do we think that the shorter loans 6-12 months are significantly less risky than the longer ones? Do we think that the default rate for a+ loans will stay low even in a recession? (I would call 1.2%-1.8% low in a recession.) These changes mean that I am having to make changes to my strategy and I have always avoided the shorter A+ loans, but if they are genuinely less risky maybe I am being foolish. Edit: For example recoveries seem to be better on A loans than A+, but the A+ sample is small. Do we think that the A+ and A default rates are correct for SME loans or do we have to include property loans?
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bg
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Post by bg on Nov 9, 2016 14:58:37 GMT
Am I right in saying that since the new rates came in Monday, every single C, D and E loan has been on the old (lower rate) while every A and B loan has been on the new (lower) rate? I'm not one for conspiracy theories but I'm pretty sure this is the case for PL's. If there is a legitimate transfer period then I would not have thought every single loan would be at the lowest rate available.
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kaya
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Post by kaya on Nov 9, 2016 15:22:40 GMT
I'm convinced that FC is conspiring to turn us all into autobots. Then we will no longer need to think anymore!
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blender
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Post by blender on Nov 9, 2016 15:27:50 GMT
bg. My guess would be that you are right that there is a transition period and a number of loan application are in process during it. The borrowers are FC's customers, the objects of their sales activities, and I would think that they have decided to give every borrower in process the better of the old or new rates. This would be seen as fair treatment of customers 'caught' during the changeover. From the lenders' point of view it looks different, but it will soon be over and it will make very little difference overall. If it continues that's different.
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acky
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Post by acky on Nov 9, 2016 16:29:13 GMT
... or perhaps C, D & E loan applications take "a little longer than expected" to process!
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fasty
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Post by fasty on Nov 9, 2016 17:01:12 GMT
I don't mind the delay, it's been giving me time to dump re-home some less desirable loan parts.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Nov 10, 2016 15:29:34 GMT
bg. My guess would be that you are right that there is a transition period and a number of loan application are in process during it. The borrowers are FC's customers, the objects of their sales activities, and I would think that they have decided to give every borrower in process the better of the old or new rates. This would be seen as fair treatment of customers 'caught' during the changeover. From the lenders' point of view it looks different, but it will soon be over and it will make very little difference overall. If it continues that's different. So, used autobid set sec mkt at 17.9 and 13.5 d anc c respectively. wonderful system gave me a d60 at 14.1, d36 at 13.8 and c36 at 13.8. TURN YOUR AUTOBIDS OFF FOR THE NEXT WEEK OR TWO if you are daft enough to expect it to work properly, like I was, during transition. Going to cost 9% to get out. grrrrr. Rip off.
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fasty
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Post by fasty on Nov 10, 2016 17:24:00 GMT
bg. My guess would be that you are right that there is a transition period and a number of loan application are in process during it. The borrowers are FC's customers, the objects of their sales activities, and I would think that they have decided to give every borrower in process the better of the old or new rates. This would be seen as fair treatment of customers 'caught' during the changeover. From the lenders' point of view it looks different, but it will soon be over and it will make very little difference overall. If it continues that's different. So, used autobid set sec mkt at 17.9 and 13.5 d anc c respectively. wonderful system gave me a d60 at 14.1, d36 at 13.8 and c36 at 13.8. TURN YOUR AUTOBIDS OFF FOR THE NEXT WEEK OR TWO if you are daft enough to expect it to work properly, like I was, during transition. Going to cost 9% to get out. grrrrr. Rip off. I believe it's fair to say that the general consensus on here would be to simply turn off autobid permanently.
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SteveT
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Post by SteveT on Nov 10, 2016 18:54:46 GMT
bg. My guess would be that you are right that there is a transition period and a number of loan application are in process during it. The borrowers are FC's customers, the objects of their sales activities, and I would think that they have decided to give every borrower in process the better of the old or new rates. This would be seen as fair treatment of customers 'caught' during the changeover. From the lenders' point of view it looks different, but it will soon be over and it will make very little difference overall. If it continues that's different. So, used autobid set sec mkt at 17.9 and 13.5 d anc c respectively. wonderful system gave me a d60 at 14.1, d36 at 13.8 and c36 at 13.8. TURN YOUR AUTOBIDS OFF FOR THE NEXT WEEK OR TWO if you are daft enough to expect it to work properly, like I was, during transition. Going to cost 9% to get out. grrrrr. Rip off. IIRC, when you turn on Autobid you authorise FC to invest your funds in any new (PM) loans in the risk bands you select. Your SM settings only affect SM purchases, not PM, and you cannot opt out of PM loans. Why do you think it will cost you 9% to get out? I suspect your parts will sell on quickly at par.
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guff
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Post by guff on Nov 10, 2016 18:57:56 GMT
So, used autobid set sec mkt at 17.9 and 13.5 d anc c respectively. wonderful system gave me a d60 at 14.1, d36 at 13.8 and c36 at 13.8. TURN YOUR AUTOBIDS OFF FOR THE NEXT WEEK OR TWO if you are daft enough to expect it to work properly, like I was, during transition. Going to cost 9% to get out. grrrrr. Rip off. I believe it's fair to say that the general consensus on here would be to simply turn off autobid permanently. It's probably fair to say that those who didn't get past… … are unlikely to find there way here.
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