Defaults and Crystalised Losses

Yes I would agree with that. I guess we will all get a default at some point.

I tend to agree with Dave here.

However, I quote myself from another thread:

My current calculations on the last seven months show an expected return around 6.5% and currently less than 6.6% with no leeway for defaults. I think 7% over the full year to August 2017 is going to be dreamland. Then the defaults .... (loans 1596/1597). Not crystallised losses yet, but if they do, that will be £160 out of net interest earned so far of £279 including accrued. That would bring achieved interest after fees and losses of about 2.8%, so I (and many others who have given BM a chance) will be watching VERY carefully.

My settings are at 1%.
BondMason elected to allocate two loans 1596 and 1597 to me both on the same day six months ago for the same amount and both have defaulted (my only defaults since last August).
Now, I ask myself, are both those loans to the same borrower? If so, it's pretty silly (and annoying) to tell me I will get allocated 1% of my cash to a loan and then give another 1%  to the same borrower which makes 2% which I did not request.

When youve got a mo stevefindlay could you tell us whether those two loans are to the same (corporate) defaulter, and what the position is for recovery? I don't want to lose a double dose.

Greenwood2 . I think that distributing losses across all lenders is a great idea that would work well on this platform. Aggregated losses/recoveries would be incorporated in the current return of the headline display. It may be technically simple to implement. The more obvious issue is how to have all lenders agree with the change because giving a choice to opt in or out may indeed complicate things unduly.
Edit: Afterthought: seems that 1% or 2% diversification would no longer be relevant if losses were to be distributed.

I am more concerned about expected losses, no diversification/sharing losses/PF can help with that. With 4-5% expected losses for invoice discounting BM doesn't seem to be a very attractive proposition, you can get 3% return with Ratesetter rolling market with no effort and less risk. 

This is probably were you find out if BM is actually worth its fee or not, everyone can get defaults no matter how good at investing you are. What counts is what they get recovery wise from the defaulted loan and the length of time it takes.

They will have no control over the recovery, but it will show how good they are at picking the right loans, even when things do not go as planned.

Some of the comments on here, whilst being based on real and concerning cases, are in the process of being mitigated or just a short term view of things in what should be a longer term hold.
Steve has already indicated a 0.5% diversification setting is coming. Not checked to see if it is in place yet as still struggling to get from 2% fully funded to 1% fully funded but I expected that to take up to 6 months to happen anyway by logic.
This increase in diversification makes it more likely that I wont be one of the fortunate ones in the future that, as I am currently, dodge the defaults but decreasing the pot I lose significantly reduces the overall pain. If one of my loans when my setting was 2% went sour the capital is 4 times the size than if I am fully in the 0.5% diversification ones. That is a risk I am willing to take to reduce potential losses as discussed higher up in the thread.
To think about bm in the 1, 3 and 6 month frames and reach a conclusion that is acted on without considering the 12, 24 or 36 month scenario of a diversifying company is flawed but understandable.

As for the default recovery, I have the following observation. If lenders are asked to vote on default action in a case then the larger the lender the bigger the voice. This is where a collective voice can apply little peoples voice amplyfied many times over.

I have a considerable holding in bm and I am increasing it as the platform has done EXACTLY WHAT IT SAYS ON THE TIN so far. I am unconcerned about cash drag as I knew about it before entry AND it is factored into the 7% target rate. Steve has far more access than I could possibly gain to different markets and a greater breadth of experience than myself.
I dont need to do anything but deposit and monitor. No sitting at screens or logging in at a deadline. No fastest finger first stupidity or competing with bots as I orefer to put it that goes on elsewhere.

If people are very nervous about the losses that are happening on P2P then maybe they need to consider their diversification levels, (by platform and asset class) and also if P2P risks are right for them. Same stands for the ultra twitchy farthing chasers mentioned elsewhere.

I, for one, will be staying aboard the good ship bm for the foreseeable future. Any iceburgs at the equator skipper! Answer, we are travelling cautiously enough to avoid all but a glancing blow.

End of Saturday morning musings.
Time to go for my train and get out of this tropical Lancashire sunshine to head back to the murky confines of the second city.
Have a great afternoon all. Dont forget the cream, shades n hat.