adrian77
Member of DD Central
Posts: 3,920 
Likes: 4,145
|
Post by adrian77 on Aug 29, 2017 10:46:35 GMT
Exactly but I would also say there are ever more people ploughing into this market and some companies may be tempted to reduce their loan criteria with the result that more and more junk loans end-up on the market...we have been here before with sub-prime mortgages and look how well that ended!
I have drastically reduced my P2P investments whilst I see how things develop
|
|
markr
Member of DD Central
Posts: 766
Likes: 426
|
Post by markr on Aug 29, 2017 11:57:34 GMT
I saw you, or rather your slightly more hyphenated doppelganger, picking off some of these from my portfolio  Thank you for your pre-loved delights, I promise to take care of them I think, generally, we* kept these well above average parts because they were too good to sell, even at 3% markup. FC's announcement hasn't changed anything about existing loans, so this is still true. For those of us staying in, being able to buy this stuff at par is brilliant, especially those of us left high-and-dry with a diversity criminal flipper portfolio to reshuffle! I noticed at the weekend that some of the bots may have been redirected at the par SM. Pages of stuff would appear, only to vanish again within seconds. *I say we because I was doing it to, so I definitely wasn't being disparaging about the strategy; it was a good one at the time!
|
|
|
|
Post by barneywol on Aug 29, 2017 20:08:56 GMT
Apologies if this has already been mentioned - I've lost track after 20 pages of comments! Word on the streets is that these changes - unwelcome to many, especially here - were a result of several pesky little devils using "bots" to apply multiple bids very fast on the high value loans, hence removing their availablilty to everyone else :-( I'm still rather surprised that "Autobid" was so slow, and/or that loans were put online before Autobid had been through for first pickings. But, it is what it is. So thanks you guys, in order to make a little profit - and honestly, surely it really was a little profit? - by taking the p... and abusing the system, you've ruined it for the rest of us! Bah, humbug!
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 29, 2017 21:41:53 GMT
Apologies if this has already been mentioned - I've lost track after 20 pages of comments! Word on the streets is that these changes - unwelcome to many, especially here - were a result of several pesky little devils using "bots" to apply multiple bids very fast on the high value loans, hence removing their availablilty to everyone else :-( I'm still rather surprised that "Autobid" was so slow, and/or that loans were put online before Autobid had been through for first pickings. But, it is what it is. So thanks you guys, in order to make a little profit - and honestly, surely it really was a little profit? - by taking the p... and abusing the system, you've ruined it for the rest of us! Bah, humbug! Nah, I would be fairly confident in saying that the real reason is that it is substantially easy to manage a system which is completely in your control - ie where everything is autobid and autosell - than a system that has 10's thousands of manual bids and sales a day. As the platform grew things were only likely to get worse. This way you don't get anyone kicking up a stink because they invested £2000 in 4 loans and one of them defaulted wiping out 25% of their investment in the first week. You don't get people complaining that loan X should be rated D instead of rated B. You don't get questions about the profit company Y made. The people assigned to deal with these comnplaints can be reassigned to other tasks (note also the closing of their forum which was a precursor to this move). All people can realistically moan about now is that their return over X years is lower than 7.5%....and they can manipulate the system to try and achieve that way better than they could before. You can also do away with the entire auction system which was pretty system intensive. You get full control over which loans are filled and when (ie an even larger A+ that could sit for days on the PM they can now fill pretty much instantly if they wish). Under the new system they can dictate exactly what happens to everything (save the pace of deposits and withdrawals - but even that will be pretty easy to model). On top of that (and this comes from a phone conversation I had with them last week) their target is to make FC a mainstream saving/investment product. They want granny Doris feeling confident enough to put her £20k life savings in because she knows she will get 7-7.5% return per year with no effort and thats only going to happen if its deposit and click one button. If she had logged on to see auctions for dozens of loans and a SM with thousands of loans on sale all with confusing financial data it just wouldn't have worked. I don't think its any coincidence they seem to be ramping up the advertising effort right about the time these changes are coming in. I would think for any platform once it gets to a certain size its easier for them to go down this route. They just don't need the type of people who like to manage their loan books manually (and they need the grief even less)
|
|
|
|
Post by yorkshireman on Aug 29, 2017 21:43:52 GMT
Apologies if this has already been mentioned - I've lost track after 20 pages of comments! Word on the streets is that these changes - unwelcome to many, especially here - were a result of several pesky little devils using "bots" to apply multiple bids very fast on the high value loans, hence removing their availablilty to everyone else :-( I'm still rather surprised that "Autobid" was so slow, and/or that loans were put online before Autobid had been through for first pickings. But, it is what it is. So thanks you guys, in order to make a little profit - and honestly, surely it really was a little profit? - by taking the p... and abusing the system, you've ruined it for the rest of us! Bah, humbug! Here’s one of the individuals to blame then plus the two “likes” presumably. p2pindependentforum.com/post/210650
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 29, 2017 22:30:24 GMT
The idea that bots have caused FC to cease all lender-chosen buying and selling, and to limit the SM to par trades, is far fetched. This is what they have wished to do when market conditions allowed, for reasons of cost-effectiveness, and simplicity for the consumer-lender. They do it now, after they have FCA approval, so that it is in place for the IFISA offering. They positively encouraged flipping with cash back in the past to get large loans filled, buy more than you wish to hold and sell some later for a profit. They have failed to address the small problem of bots for years. This is just a case of a convenient scapegoat.
|
|
ceejay
Posts: 975
Likes: 1,149
|
Post by ceejay on Aug 30, 2017 6:56:19 GMT
Before these changes were announced, I was trying to explain FC to someone who knows nothing at all about P2P.
I told him it was a bit like the Wild West, which seems to work quite well as an analogy for the change.
Consider FC's management as the Mayor of a nineteenth-century wild west town, populated by golddiggers, cowboys and ancillary trades [which, BTW, is one of the best euphemisms I think I've ever come up with].
At first everything is wild growth and shootouts behind the stables, but this can't last for long. As people start to make money, they want to be able to benefit from it, which means they need a sufficiently stable society to be able to buy a house and live in it without the fear of being robbed. So a sheriff is hired, and then gun control laws are introduced, and more ordinary people start to move in. They demand the right to be able to traverse the sidewalk without being spat at, and to be able to bring up their children safely.
This is where we are now: would I honestly have recommended FC to a friend or relative who wasn't prepared to get a little bit dirty? No, I wouldn't, and if the new metropolis of FC is to continue to grow then all signs of its past need to be erased.
Just as there aren't now any traces at all of its roots in the modern city of Denver. It's a pleasant enough place, but not anywhere you'd go for excitement.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 30, 2017 10:10:39 GMT
Good analogy, ceejay. I can't quite work out how to fit the injuns, the aboriginals.
|
|
kt
Posts: 105 
Likes: 39
|
Post by kt on Aug 30, 2017 10:15:25 GMT
The blaming of bots is just excuses. FC want these changes to simplify their business, to ensure no loan goes unfilled and to remove the need for realtime interaction. Now they can run each loan in a slow offline process. Rate limiting the bots would have been an easy task, but that is not what they wanted. Don't be suckered into the FC line that bots were a problem, FC didn't care so long as loans were sold. This is now an entirely new business model. Previous rates of return do not apply, the emptor may no longer caveat, ergo they will get lumbered with a fair share of dross KT. |
|
ashtondav
Member of DD Central
Posts: 1,814
Likes: 1,092
|
Post by ashtondav on Aug 30, 2017 11:08:36 GMT
Who cares? The vast majority of potential lenders will applaud this change. A nice simple acccount delivering 7%. Just the ticket.
Theres plenty of p2p places for you guys who like to consume company accounts and rip off unsuspecting punters on the secondary markets. I go to FS for this, but there's others.
|
|
|
|
Post by Butch Cassidy on Aug 30, 2017 11:24:17 GMT
Who cares? The vast majority of potential lenders will applaud this change. A nice simple acccount delivering 7%. Just the ticket. Theres plenty of p2p places for you guys who like to consume company accounts and rip off unsuspecting punters on the secondary markets. I go to FS for this, but there's others. Be careful what you wish for; AC provide exactly the type of account you describe & now there are plenty of investors crying & bitching about the defaults they have been "forced to hold" & asking why they can't withdraw all their funds "like they were promised", I was unaware that buying or selling on the current FC SM was ripping anyone off; I thought investors were free to chose whether to buy or sell & what price was acceptable - what I see as unacceptable is this new enforced collective investing. I have increased my FC exposure by 25% over the last week or so but come Sept 18th I will be closing the doors & allowing my portfolio to naturally run down & withdrawing to invest on platforms that still value freedom.
|
|
rogerthat
Member of DD Central
Posts: 2,048
Likes: 1,994
|
Post by rogerthat on Aug 30, 2017 11:32:06 GMT
"I thought investors were free to chose whether to buy or sell & what price was acceptable - what I see as unacceptable is this new enforced collective investing "
Well said..its called supply and demand (with no obligation to either sell...or buy)
|
|
r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
|
Post by r00lish67 on Aug 30, 2017 12:04:16 GMT
Who cares? The vast majority of potential lenders will applaud this change. A nice simple acccount delivering 7%. Just the ticket. Theres plenty of p2p places for you guys who like to consume company accounts and rip off unsuspecting punters on the secondary markets. I go to FS for this, but there's others. Be careful what you wish for; AC provide exactly the type of account you describe & now there are plenty of investors crying & bitching about the defaults they have been "forced to hold" & asking why they can't withdraw all their funds "like they were promised", I was unaware that buying or selling on the current FC SM was ripping anyone off; I thought investors were free to chose whether to buy or sell & what price was acceptable - what I see as unacceptable is this new enforced collective investing. I have increased my FC exposure by 25% over the last week or so but come Sept 18th I will be closing the doors & allowing my portfolio to naturally run down & withdrawing to invest on platforms that still value freedom. Note also that the rates on offer in the new model are only projected returns. As some Zopa+ investors have found to their cost, projections are not promises. Even if they are spot on, those projections may only be delivered once the full extent of any required recoveries from defaults has been completed. So, the easy 7.5% could (and probably will be) quite a messy elongated slog.
|
|
|
|
Post by barneywol on Aug 30, 2017 12:35:30 GMT
Who cares? The vast majority of potential lenders will applaud this change. A nice simple acccount delivering 7%. Just the ticket. Theres plenty of p2p places for you guys who like to consume company accounts and rip off unsuspecting punters on the secondary markets. I go to FS for this, but there's others. Really? I must have missed them. All that I have seen are fixed rate invest-and-forget type. With the possible exception of the AC Manual fund, which had a much smaller range of loans to choose from, FC was the only company allowing "stock market" type trading. And I think THAT is a good analogy: the stock market doesn't insist taht you only invest in an FTSE-100 or All-Share mixed fund (which is what FC are now making us do), they allow individual shares to be bought and sold at will. While (the way I operated it) it WAS very labour intensive, hell, you've got to do SOMETHING with your time, and I enjoyed this. So I remain very disappointed that, apparently for an easy life, FC have just joined the herd of mixed fund providers. :-(
|
|
p2p2p
Member of DD Central
Posts: 123
Likes: 114
|
Post by p2p2p on Aug 30, 2017 12:54:05 GMT
The bad debt long tail is something I'd not anticipated with p2p. On FC I've sold everything I can, but am stuck with 7% of my initial investment in the system, 2/3 in defaults, 1/3 in downgrades. If I view that as all lost, my return over the year was 4%, a disappointing return compared with other p2p sites, but still better than a bank. Recoveries so far have been meager, but I guess things will pick up, but its frustrating that some downgraded loans are paying reliably now, but I'm stuck with them for 4 years as a rump investment.
One of the attractions of a bank, and a reason they can only offer lower returns, is that they guarantee to give you all your money back on demand. If FC become more bank-like, with their risky/safe auto buy/sell, will they allow complete liquidation on demand, writing off bad debt, or will you be stuck with it, as now.
|
|
