Author Topic: When 59% is >70%  (Read 12196 times)

core

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Re: When 59% is >70%
« Reply #15 on: January 17, 2014, 10:06:17 AM »
I saw many notes for sale on FOLIOfn with markup around 67% - 68% today:.

Also, if you hover on the question mark above the Markup/Discount header, it does mention "sum of Outstanding Principal and  Accrued Interest."

Yes the markup/discount column is calculated based on P+I.  But the 70% limit is calculated based on principal.  The asking prices on all the notes in your screen shot were all under 70% based on principal alone.  This is the reason you see plenty of ~68% notes but rarely any 69.99-70.00%.  Back when they didn't cancel listings when a payment started processing you could update the expiration date of the sale right before the payment was about to post and have some insane 100%+ markups listed for a while.

Fred

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Re: When 59% is >70%
« Reply #16 on: January 17, 2014, 10:49:48 AM »
Yes the markup/discount column is calculated based on P+I.  But the 70% limit is calculated based on principal.

I see; I have never encountered this limit personally, but this makes sense.  We know that markup is a continuously-decreasing number on a daily basis (as interests accrue), so it makes sense to base a limit on a more stable number (outstanding principal).

Overall, though, I view this limit in the same light as the maximum interest rate a credit card company can charge consumers -- to limit damages on predatory lending/trading.  I personally do not agree with this limit -- there is no such limit in bond/stock markets, isn't there? -- but I am willing to live with it as long as this P2P lending-trading environment is profitable.

constontino

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Re: When 59% is >70%
« Reply #17 on: January 23, 2014, 04:29:24 PM »

I always wondered who the people were posting ridiculous markups and what the rationale was behind them.  It infuriated me to no end because I just looked at those notes as weeds and cluttered up the folio inventory.

My suspicion was that it was people who were hoping to catch people slipping and accidentally purchase notes at usurious rates.

It boggles my mind that LC allows this to go on.  I must admit that I accidentally purchased one of these notes once when I first joined a year ago and paid a couple dollars more than I should have.  With the new laser focused filters though there is very little chance of that happening again.

You are all grown men and women so I can't tell you what to do.  But from my personal ethics and values, I would not list notes knowing that they will be picked up by the mistake, ignorance of someone else.

Randawl

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Re: When 59% is >70%
« Reply #18 on: January 23, 2014, 06:41:14 PM »

I always wondered who the people were posting ridiculous markups and what the rationale was behind them.  It infuriated me to no end because I just looked at those notes as weeds and cluttered up the folio inventory.

My suspicion was that it was people who were hoping to catch people slipping and accidentally purchase notes at usurious rates.

It boggles my mind that LC allows this to go on.  I must admit that I accidentally purchased one of these notes once when I first joined a year ago and paid a couple dollars more than I should have.  With the new laser focused filters though there is very little chance of that happening again.

You are all grown men and women so I can't tell you what to do.  But from my personal ethics and values, I would not list notes knowing that they will be picked up by the mistake, ignorance of someone else.

Not to explicitly disagree with your implications entirely, but by definition that is how most of the trading works in this world.

core

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Re: When 59% is >70%
« Reply #19 on: January 23, 2014, 07:01:47 PM »
It boggles my mind that LC allows this to go on.

They've already added the nanny rule about no negative YTM listings.  The filter defaults are now somewhat strict.  What more do you want?  Maybe a panel of bureaucrats to decide what is your "fair share" when you go to sell a note?  'Change we can believe in'...

constontino

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Re: When 59% is >70%
« Reply #20 on: January 23, 2014, 07:06:27 PM »
This is coming from the person who was trying to take notes from one of the other members for 10%.  When I see shady I call it out...  Shady to the Core.

core

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Re: When 59% is >70%
« Reply #21 on: January 23, 2014, 07:15:20 PM »
This is coming from the person who was trying to take notes from one of the other members for 10%.  When I see shady I call it out...  Shady to the Core.

I see you have been reading a lot of old posts this week.  I don't remember that one.  If you're talking about how I bought 5 notes from Bohb Daichi for around -90%, well all those recently defaulted and I lost everything on that transaction.  He got a good deal on those.  10% isn't always a bad price.

Bohb Daishi

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Re: When 59% is >70%
« Reply #22 on: January 24, 2014, 03:47:27 AM »
This is coming from the person who was trying to take notes from one of the other members for 10%.  When I see shady I call it out...  Shady to the Core.

I see you have been reading a lot of old posts this week.  I don't remember that one.  If you're talking about how I bought 5 notes from Bohb Daichi for around -90%, well all those recently defaulted and I lost everything on that transaction.  He got a good deal on those.  10% isn't always a bad price.

It's true. If it wasn't for our deal at -85%, I would have ended up losing a few more dollars on those...  ;D

But from my personal ethics and values, I would not list notes knowing that they will be picked up by the mistake, ignorance of someone else.

How do you know that the people aren't purchasing the 0% YTM notes as an experiment, knowing full well that they will end up losing a few dollars? People make stupid purchases all the time (think: extended warranties at Best Buy) knowing full well that they probably will lose money on it.

The bottom line is, if someone purchases a bunch of notes at 0% YTM, it's their own fault and they should "man up" to their mistake. The best way to teach a kid not to touch a hot stove is to simply let them touch it.
There are three ways to make a living in this business: be first, be smarter, or cheat.

core

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Re: When 59% is >70%
« Reply #23 on: January 24, 2014, 04:15:03 AM »
I must admit that I accidentally purchased one of these notes once when I first joined a year ago and paid a couple dollars more than I should have.

Thank you.  Your money went to a very good cause.  It was also a cheap price to pay.  In the stock, real estate, and just about any other kind of markets, learning something can be very costly.  A couple bucks is nothing.

When I see shady I call it out...  Shady to the Core.

My vocabulary isn't quite up to snuff.  I had to enlist the help of Google to help me discover the meaning of "shady".  I found a cyber squatter who registered every ParkCity[fill-in-blank-resort].com domain he could think of.  (One of which was later turned into a Chinese dating-type site which makes for some very interesting reading when translated through Google.)  I found a business using a .biz domain (shady!) without any names listed (shady) with a PO box (shady) for an address.  The very same PO box that is (or was) used by a so-called nonprofit/charity in Michigan.

But from my personal ethics and values, I would not list notes knowing that they will be picked up by the mistake, ignorance of someone else.

Personal ethics and values prevents you from making a dollar or two from some unsuspecting victim.  Ok, I understand that.  Admirable, even.  What about an unsuspecting victim that could have been (but was not) hit by an UNLICENSED driver driving an UNINSURED car in Illlinois back in 2005?  That would have cost that innocent person a lot more than $2.  Just sayin'.  We were talking about ethics and values and calling people shady, weren't we.

If anyone else wants a turn just speak right up.

Bohb Daishi

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Re: When 59% is >70%
« Reply #24 on: January 24, 2014, 04:34:56 AM »
If anyone else wants a turn just speak right up.

*raises hand*  ME ME ME!!!
There are three ways to make a living in this business: be first, be smarter, or cheat.

core

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Re: When 59% is >70%
« Reply #25 on: January 24, 2014, 04:49:54 AM »
*raises hand*  ME ME ME!!!

I already gave you the business, weeks back, Mr. Eagle Scout.  I didn't go as far as pulling your criminal record though.  Then again you didn't call me shady.

That reminds me, as you're looking at your front door, in the alley to the right I remember there was this weird small room half-suspended over the alley, top floor of the building to the right.  I meant to ask you what the heck that was.  Skyway romper room I guess.

About the original topic, yes we are all adults here and if two adults want to make a trade let them.  Lending Club has already put in place the YTM restrictions.  You can't sell while a payment is in progress.  Now no selling of BK notes.  I don't see what more you can ask for.  Now you have to try _really_ hard to be an idiot.  And guess what, people still do.  These people are creative enough that they will find a way to lose money no matter what restrictions you add.  It's becoming pure comedy.  And isn't really cutting into my profits all that much.

Bohb Daishi

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Re: When 59% is >70%
« Reply #26 on: January 24, 2014, 06:17:30 AM »
That reminds me, as you're looking at your front door, in the alley to the right I remember there was this weird small room half-suspended over the alley, top floor of the building to the right.  I meant to ask you what the heck that was.  Skyway romper room I guess.

I live in a really old neighborhood, so it's one of those where the bedroom has an alcove that extends beyond the outside structure of the house and is covered with windows. Typically they are round, but this particular one is square. For the life of me, I can't remember what they are called. But you see them all the time with older architecture.


I already gave you the business, weeks back, Mr. Eagle Scout.  I didn't go as far as pulling your criminal record though.  Then again you didn't call me shady.

"...let he who is without sin cast the first stone." I have no desire to shun the activities that I, myself, participate in. But let's be honest, Core, you are a bit shady  ;)

Where is DanB when you need him? This thread is ripe for a name-calling fest.
There are three ways to make a living in this business: be first, be smarter, or cheat.