Cash Secured Loan

[rawraw]

Instead of offering margin, couldn't LC just offer low rates to investors secured by their investment subject to a haircut based on pool characteristics.

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[New Jersey Guy]

Rawraw!  You lost me right after "....low rates".

Unless you're using some of that fancy financial-jargon I don't understand, you need to try eggs for breakfast instead of Scotch.

[p2p2p2p2p]

makes sense to me-  So you are saying I should be able to borrow from LC 75% of my accounts value ( based on historical defaults etc.) at a rate significantly lower than the rate I am earning on my LC account, and use that money to make additional investments in LC notes.

Two things- (1) there is an existing hedge fund already doing that however they got a loan from an independent bank, and they borrowed over 3 times their total investment
(2) I can barely invest the existing return on my account as it is. What am i going to buy with more funds?

[rawraw]

Yea it seems like LC has amazing data to determine haircuts specific to each account automatically.  And basically what I mean NJ is LC have a secured type of loan for investors with lower interest rates -- like your 401k plan does.

[core]

What am i going to buy with more funds?

You can lend out your funds to investors who are looking to borrow funds to lend them out to other investors.   Soon we will have people borrowing at 22% to invest in 24% notes.  Works for me.  More churn, more profit.

[rawraw]

Or you can get emergency cash for a small fee

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[core]

You know, I would be happy with just a money market sweep or something.  Not that it matters with today's low rates but they're not going to stay that way forever.  It kills me to sit on tens of thousands of uninvested cash when I can't find anything to buy.  Sometimes for weeks at a time.  Or hey, how about they sweep into a homebrew fund which earns 5%+ using their own notes?

you need to try eggs for breakfast instead of Scotch.

Haha somehow I missed that first time I read through this thread.  But if everyone followed that advice, the threads around here wouldn't be as much fun at times.

And congrats on your new dragonslayer status:
New Jersey Guy
Hero Member

NJ Guy, you're my hero!  Don't do anything with that Princess Zelda that I wouldn't do.

[New Jersey Guy]

" It kills me to sit on tens of thousands of uninvested cash when I can't find anything to buy. "

Yea, that really sucks.  That extra cash just kills me.  The kids just keep tossing it all over the house when they have "money-Ball" fights.  I find money in the dishwasher, washing machine, blender, swimming pool, etc.  I have tens of thousands everywhere.   The wife sprained her ankle in April when she slipped and tripped over a stack of $20's and blamed me.  She didn't talk to me for two weeks. 

Well, I guess I'll just be tossing the extra into the fireplace again come winter.

[core]

Bah.  You know what I mean, silly.  I'm not gonna spend it on trades I know are only going to make me a quarter percent profit or something.  The smart thing to do would be to transfer it out when I hit a lull like that and get the money working elsewhere.  But I really don't want ACHs going all over the place each week.

If it makes you feel any better, my account is broke at the moment.  If you need a new wife I'll sell you one.  I won't have any funds for the whole weekend now.  You'll have to mind the store while I'm offline.

[New Jersey Guy]

"And congrats on your new dragonslayer status:
New Jersey Guy
Hero Member

NJ Guy, you're my hero!  Don't do anything with that Princess Zelda that I wouldn't do."

All that means is that I spend too much time on this site when I should be doing something more useful!

[cfb]

Well, I guess I'll just be tossing the extra into the fireplace again come winter.

I briefly considered a strategy of heating my house by turning off all my 'paperless statements' and burning them, coupled with crushed amazon and costco boxes.