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Post by Deleted on Sept 1, 2014 13:36:59 GMT
Just read up on the only current new loan open for bids (a restaurant).
Ran a mile when I read the details,
The security is a Second Charge on Property.
£200,000 purchase price £15,000 own money £150,000 loan £35,000 ReBS loan Total loan to value: 92.5% Only a 2nd charge on the property and 3 years of losses
Yet people are queuing up to throw money at this opportunity for a 20% return.
I wouldn't risk £ on it.
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Post by Deleted on Oct 16, 2014 13:53:27 GMT
You're absolutely right.
Coincidentally (I'm sure) both the directors are civil servants in their dayjobs.
What we need to recognise is that a substantial minority of p2p investors are just savers who can't get any interest from the banks. They wouldn't ordinarily get involved in anything this risky: they simply feel they have no choice unless they want their purchasing power to be decimated.
Add to that the fact there's nothing to stop people taking out bank loans of 7% then 'investing' in these crazy loans at 12% and you can see what's really going on here.
It's not just this platform, it's the whole sector. Sure in a free society with sound money backed by gold, it'd be a step forward. In the funny-money economy of cash created out of thin air, it's just one more way to increase indebtedness.
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spyrogyra
Member of DD Central
Posts: 386
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Post by spyrogyra on Oct 16, 2014 21:20:02 GMT
Yep. Lately it looks like the quality of the loans on various platforms is slipping. Take the new one on RS - the pub in Bradford. It looks hugely uninspiring on google maps, dropped among industrial buildings. The company claims the manager has been running the pub successfully for years yet the upper floor is in disrepair and used as store rooms. Probably there's no potential for any other use,and yes, forget about being turned into desirable residential dwelling. Valued at £160k if vacant and the loan is for 130. Ah,plus PG without detailed information.Great.
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Post by Deleted on Oct 16, 2014 21:49:47 GMT
It always amazes me that people think pubs can ever work under the current régime, but at least it's in the productive sector! Nothing worse than handing our hard-earned savings to public sector outsourcers as off-the-books government borrowing, only to see them rapidly default on the loan because they hate money and regard us as parasites! Still, even if you don't think a northern pub can make a go of it (and there's a dozen a week going out of business, with yet more punitive regulatory interference to come next year), if the application's filled you're still taking the risk: your money is lent to the platform not the individual companies. The question isn't what's backing the companies but what's backing the platform.
I don't know about you but when I saw the video recently of another pub chain, my heart sank. It was just a tale of excessive and rather reckless indebtedness.
The whole world's upside down right now. The wake-up for p2p 'investors' is that we're doing it because we can't get 3%+ from bank bonds. Sure it's a nice ego trip to say "I hold various SME investments in a diversified portfolio in the alt-finance market" but the reality is we're risking our principal to chase returns we would historically have always otherwise got by safer means: we're dancing to Mark Carney and George Osborne's tune.
I bet this gets censored: you're just not allowed to criticise your wise overlords.
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jimbo
Posts: 234
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Post by jimbo on Oct 17, 2014 6:33:19 GMT
No problem with this Moderator. You're not the only person distrustful of fiat currency on this forum, not to mention Central Bankers and the current grand monetary experiment.
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Post by Deleted on Oct 17, 2014 11:33:26 GMT
Many thanks Jimbo. These really do feel like the end times don't they? :c
It's sad.
I'm a bit concerned that people may very well be using credit cards and/or money they borrowed at a lower rate in order to lend through p2p. In the end, we may very well be part of the problem, increasing the money supply even further, topping up off-the-books government (outsourcer) borrowing and encouraging marginal debtors back into the credit market.
In a free society with sound money, this whole thing would be wonderful but a lot of us rushed in without really weighing up the many ways in which the funny-money system would end up trickling in.
Thanks again for your tolerance.
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
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Post by merlin on Oct 17, 2014 11:49:47 GMT
Sterling, I wondered if you had listened to Radio 4 this morning and their review of World Markets? Terrifying, is the only word I can think of. Great uncertainty about the future of the US, German and Chinese economies. Lets face it if they really are in trouble it probably is time to get into gold, not playing around with P2P lending. It will be interesting to watch the price of gold over the coming weeks!
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Post by chielamangus on Oct 17, 2014 14:16:41 GMT
On the other hand, financial markets are just like a herd of cattle thundering across the plains - if the leader turns for no apparent reason, the rest just follow. And wasn't it that arch doomsayer Peston reporting this morning? He's been looking for another doom & gloom story for about five years to maintain his reputation.
Speaking as an economist who knows the limitations of the subject, I rarely believe what a bunch of economists say! Always look for the thoughtful comments of the minority - and make your own interpretation.
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Post by Deleted on Oct 17, 2014 14:38:42 GMT
As a relative layman in matters financial and economic, I look at what's going on today and I look back at what went on before the global financial meltdown in 2008.
We had economies built on sand - money became numbers on bits of paper and spreadsheets rather than real money and real wealth. Chains of transactions without any solid foundation. Little wonder the house came crashing down.
It seems to me that little has been learnt. Now we living in a world of even cheaper money, near zero base interest rates, 0% finance and balance transfer deals. Governments trying to dig their economies out of recession and near bankruptcy by encouraging people to spend money they haven't got and borrow money they can't possibly repay when things take a turn for the worse.
I fear some of the pre 2008 mistakes are being repeated all over again and this could be a short lived recovery. 3 Eurozone countries are now in deflation, Germany is in trouble, growth in the UK economy seems already to be running out of steam despite 0.5% base rate.Inflation at a 5 year record low here.
I don't know enough to know what I'm talking about re: the above, but I do know my own mind - and I'm starting to feel quite nervous about the economic/financial outlook. If major economies start slipping back into recession I don't think the P2P sector will prove to be resilient.
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
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Post by merlin on Oct 17, 2014 15:24:30 GMT
As a relative layman in matters financial and economic, I look at what's going on today and I look back at what went on before the global financial meltdown in 2008. We had economies built on sand - money became numbers on bits of paper and spreadsheets rather than real money and real wealth. Chains of transactions without any solid foundation. Little wonder the house came crashing down. It seems to me that little has been learnt. Now we living in a world of even cheaper money, near zero base interest rates, 0% finance and balance transfer deals. Governments trying to dig their economies out of recession and near bankruptcy by encouraging people to spend money they haven't got and borrow money they can't possibly repay when things take a turn for the worse. I fear some of the pre 2008 mistakes are being repeated all over again and this could be a short lived recovery. 3 Eurozone countries are now in deflation, Germany is in trouble, growth in the UK economy seems already to be running out of steam despite 0.5% base rate.Inflation at a 5 year record low here. I don't know enough to know what I'm talking about re: the above, but I do know my own mind - and I'm starting to feel quite nervous about the economic/financial outlook. If major economies start slipping back into recession I don't think the P2P sector will prove to be resilient. Fastfox, you echo my sentiments and it now appears those of members of the BOE Financial Committee. Mark my words the flight to the bright shinny stuff could just be around the corner.
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Post by oldnick on Oct 17, 2014 20:09:52 GMT
Even the Wizard of Omaha has admitted to mistakenly piling into Tesco shares - what next? We're all dooooomed I tell ye
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bugs4me
Member of DD Central
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Post by bugs4me on Oct 17, 2014 21:36:28 GMT
As a relative layman in matters financial and economic, I look at what's going on today and I look back at what went on before the global financial meltdown in 2008. We had economies built on sand - money became numbers on bits of paper and spreadsheets rather than real money and real wealth. Chains of transactions without any solid foundation. Little wonder the house came crashing down. It seems to me that little has been learnt. Now we living in a world of even cheaper money, near zero base interest rates, 0% finance and balance transfer deals. Governments trying to dig their economies out of recession and near bankruptcy by encouraging people to spend money they haven't got and borrow money they can't possibly repay when things take a turn for the worse. I fear some of the pre 2008 mistakes are being repeated all over again and this could be a short lived recovery. 3 Eurozone countries are now in deflation, Germany is in trouble, growth in the UK economy seems already to be running out of steam despite 0.5% base rate.Inflation at a 5 year record low here. I don't know enough to know what I'm talking about re: the above, but I do know my own mind - and I'm starting to feel quite nervous about the economic/financial outlook. If major economies start slipping back into recession I don't think the P2P sector will prove to be resilient. I'm frankly well and truly beyond listening and paying any attention to many self appointed experts. My goodness, a couple were forecasting the FTSE would be well above 7500 before year end and one going as far as 8000. As usual though those self appointed experts will be invited back to give their views for 2015 and no doubt pick up (yet) another fee. As couple of years ago one prominent investment analyst suggested that AppleCorp shares were vastly undervalued at US$500 each - they should be nearer the US$1000 mark. Then it was discovered that this analyst worked for a company that had a nice juicy holding in AppleCorp and were waiting to offload. Co-incidence - I think not. There are reports that Ireland is out of the doldrums. Oh really, the average household is carrying massive negative equity in their properties. So an economy (not Ireland), dips by say 5% during one qtr then another 5% the next. They are in recession. Then the next qtr they grow by 0.1% and they are out of recession. Please give me a break. On second thoughts make that two. Of course any downturn in the economy will impact P2P but provided the security is in place then IMO it will be minimal. It may even get those miser banks to cut back even further on their lending so there will also be opportunities.
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Post by Deleted on Oct 18, 2014 17:00:58 GMT
Sterling, I wondered if you had listened to Radio 4 this morning and their review of World Markets? Terrifying, is the only word I can think of. Great uncertainty about the future of the US, German and Chinese economies. Lets face it if they really are in trouble it probably is time to get into gold, not playing around with P2P lending. It will be interesting to watch the price of gold over the coming weeks! Sadly missed it but will see if it's archived. Doug Casey and Eric Sprott have been saying this for a while. For what it's worth I think you're absolutely right. Best get your hands full of tangible things before the Comex comes clean about ETFs etc. Deflation next year then QE, then the SHTF. Toilet paper and tinned minced beef seem more attractive than a £200 stake in a northern real ale pub right now that's for sure.
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