Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: Fred93 on August 07, 2019, 08:22:02 PM

Title: LC new interest rates Aug 2019
Post by: Fred93 on August 07, 2019, 08:22:02 PM
As investny pointed out in the other thread, LC has changed interest rates again, only 1 month after the last change.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-interest-vs-time-2019-08-07.png&hash=898e075edcd21e0c094cee478acef0dc)

An unusual change.  Only D rates were changed.  It really looks like a fix for mistakes made last month.  One of the odd things about last month's rates was that C5 and D1 bumped into each other, having almost exactly the same rate.  This month's change has D1 moving up away from C5.  .. and some smaller changes in D2, D3, and a tiny change in D4.
Title: Re: LC new interest rates Aug 2019
Post by: Rob L on August 10, 2019, 11:37:31 AM
We are living in interesting times. The Federal Reserve has reversed course and lowered its Fed Funds Rate on 7/31 by 1/4%. The Fed also stopped letting bonds run off its balance sheet (quantitative tightening) two months earlier than planned. Treasury bond rates of all maturities have been steadily falling since October of last year and have rapidly and dramatically fallen over the past few weeks. They are basically within 0.25% of the multi decade lows of July 2016. These are the facts; there are many speculative reasons for them.

According to those still actively purchasing notes, LC returns are looking better than they have in years. There are clearly many risks of course. Where is that crystal ball when you need it?

(https://i.imgur.com/5aFVprn.png)
Title: Re: LC new interest rates Aug 2019
Post by: Reginald on August 22, 2019, 11:18:17 AM

According to those still actively purchasing notes, LC returns are looking better than they have in years. There are clearly many risks of course. Where is that crystal ball when you need it?


I think you are right that the lower grade C&D grades are starting off well in 2019, but that could change over time if we are in a recession.

Risks do indeed abound with lower grades OVER TIME. Dont confuse the "Rates" that Lending Club is paying on unsecured notes with the rates you can get elsewhere, especially US Treasuries. I've seen skyrocketing charge-off rates decimate any real return in the long run. 

(https://content.screencast.com/users/Sluggowski/folders/Jing/media/fd8c741a-f1ab-4a36-8965-8b6822ae9d46/LC_LOAN_VINTAGES_2019-08-22_0821.png)

Check this out for more details on LC's Loan Statistics page:  https://www.lendingclub.com/info/demand-and-credit-profile.action  (https://www.lendingclub.com/info/demand-and-credit-profile.action)

Title: Re: LC new interest rates Aug 2019
Post by: Rob L on August 23, 2019, 09:30:43 AM
Meanwhile the 10 Year UST is this morning at 1.606%, up from a low on 8/15/2019 of 1.475% (interday), 1.527% (close).
The Fed Chair speaks this morning from Jackson Hole FWIW.

Whoops, POTUS tweet alert  :o  now 1.538% 11:45 am 8/23/2019.