Author Topic: Loan Information Asymmetrical Timing  (Read 76770 times)

Fred

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Re: Loan Information Asymmetrical Timing
« Reply #30 on: June 16, 2014, 11:16:13 PM »
Thank you for your email and interest in Lending Club. If you are using an API that gets loan information from the "Download All" in our Browse Notes tab, there is a small delay. The "Download All" information is updated once per minute rather than continuously. This is a permanent feature to allow equal access to the platform for all investors.

If PRIME (Automated Investing) has access to all data prior to CSV publication, then the claim "to allow equal access to the platform for all investors" is definitively not true. 

brycemason

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Re: Loan Information Asymmetrical Timing
« Reply #31 on: June 16, 2014, 11:53:48 PM »
Fred, that's where I said I wasn't going to go in my original post. But that's my thought, too. Only one way to tell...find a few people with PRIME, identify the loans bought into, and compare with lists of loans that never made it to my archived CSVs. I really hope that isn't happening, because it would be an implicit acknowledgement that there's a "best" set of loans, something they've vociferously argued against the entire time.
« Last Edit: June 16, 2014, 11:55:40 PM by brycemason »

rockinray

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Re: Loan Information Asymmetrical Timing
« Reply #32 on: June 17, 2014, 07:28:44 AM »
Bryce,

I am testing the "Automated Investing" service with them right now.

How can I help with this?

Ray

Fred93

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Re: Loan Information Asymmetrical Timing
« Reply #33 on: June 17, 2014, 02:29:00 PM »
Looks like the CSV delay is permanent (from Lending Club support):

Thank you for your email and interest in Lending Club. If you are using an API that gets loan information from the "Download All" in our Browse Notes tab, there is a small delay. The "Download All" information is updated once per minute rather than continuously. This is a permanent feature to allow equal access to the platform for all investors.

Keep in mind you just got a form leter response from a low level employee.  This has to be escalated.  There are obviously some people in the middle who don't understand, and need to be educated.

Fred

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Re: Loan Information Asymmetrical Timing
« Reply #34 on: June 17, 2014, 09:51:53 PM »
I declare the API/CSV dead...

IMO, CSV can still be useful. 

With CSV polling and addToPortfolio.action re-tries (to catch loans that have been unlocked from shopping cart), there should be enough 'good' loans to invest in.

Not ideal, but not dead either.

Fred93

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Re: Loan Information Asymmetrical Timing
« Reply #35 on: June 18, 2014, 04:28:32 AM »
I sent LC a note tonite telling them what I think about the recent API/CSV/Web changes.

Titled "Lending Club ecosystem, battles with your customers, and the API"

I've attached a copy which is identical, except that I redacted my name.

Hope you guys back me up on this.  If you agree, send them a note telling them so.  If you think I'm full of crap, send them a note telling them so.

I sent it to my normal contact, and also Renaud Lapanche (CEO).

hippo387

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Re: Loan Information Asymmetrical Timing
« Reply #36 on: June 18, 2014, 08:04:20 AM »
I'm a retail investor who has never used API or a 3rd party service, and admittedly I know nothing about the IT infrastructure of Lending Club or Prosper. But my dollar is just as valuable as anyone else's, so here's my opinion. From a big picture perspective, any move that puts individual investors (not concerned about institutions for this point) on a common playing field is a good move in my opinion. The API and 3rd party services, by using advanced speeds and data, have frequently put the common investor like me at a disadvantage. I shouldn't need to know how to code to invest. I shouldn't need to sign up for a 3rd party service to gain greater speeds to invest. I should be able to log onto LC or Prosper directly, or use their automated investing tools, and put money to work myself. And more and more, that's what I can do. Personally I prefer Prosper and I've been finding many loans that meet my criteria each day. I don't expect them to cater to me, and I'm not sure why anyone else expects to be catered to. No 3rd party service is a part of Lending Club, so I wouldn't think they have any obligation here. 

Half Right

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Re: Loan Information Asymmetrical Timing
« Reply #37 on: June 18, 2014, 10:22:31 AM »
Just speculating, but I believe the point LC is attempting to make is that they want you to invest through their Automated Prime service or don't bother. In this way they enable you to pick the note allocation, or rate of return you are looking to achieve, while simultaneously killing off the entire "High Frequency Front-running" (so to speak) created by all the programs using the API.

 With the overwhelming majority of investors, or more importantly the minority of investors with the majority of the money, using the Automated Investing Service they can foresee the upcoming Demand and try to match it up with the Supply of new notes in an orderly manner. Although this may crimp the style of the few who have been able to cherry pick notes to-date, in the long run the new approach seems "fairer" to the "Independent Observer" and is beneficial to lending Club from an operational standpoint.

Although this may upset the forum readers , it is exactly what I would if I was running LC.

BruiserB

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Re: Loan Information Asymmetrical Timing
« Reply #38 on: June 18, 2014, 10:35:50 AM »
Just speculating, but I believe the point LC is attempting to make is that they want you to invest through their Automated Prime service or don't bother. In this way they enable you to pick the note allocation, or rate of return you are looking to achieve, while simultaneously killing off the entire "High Frequency Front-running" (so to speak) created by all the programs using the API.

 With the overwhelming majority of investors, or more importantly the minority of investors with the majority of the money, using the Automated Investing Service they can foresee the upcoming Demand and try to match it up with the Supply of new notes in an orderly manner. Although this may crimp the style of the few who have been able to cherry pick notes to-date, in the long run the new approach seems "fairer" to the "Independent Observer" and is beneficial to lending Club from an operational standpoint.

Although this may upset the forum readers , it is exactly what I would if I was running LC.

If that's the case, then they should just shut off the API and force everyone to Automated Investing.  And if they do that then I will likely look elsewhere to invest my money.

Since they haven't done that, I would like to give them the benefit of the doubt and hope that maybe they are bumbling this and their changes have had unintended consequences that they will quickly resolve.  I know nothing about the programming side of what the third parties do, but Fred93's letter makes it clear in plain English that things could be done better.

I have no problem if Lending Club wants to offer Automated Investing that is on equal footing with the access given to third party clients.  They say they are trying to promote fairness, but changes seem to be having the opposite effect.  As Fred93 says, they should really promote this ecosystem and encourage the third party clients as these bring more customers to Lending Club.  They are not "front-running" the system if they are given access equal to what Automated Investing users are getting.  It's much like when Apple first introduced the iPhone with just the factory apps.  Then people had to jailbreak and create apps.  Finally Apple introduced the AppStore and it created the ecosystem that makes iPhone hard to leave.  Lending Club should be open to the same.

SBryantMS

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Re: Loan Information Asymmetrical Timing
« Reply #39 on: June 18, 2014, 12:44:44 PM »
If you read LC Automated Investing information, they are ranking investors internally.  The more cash that you have the better your access to loans:

"The frequency of orders is based on the cash balance of your account"  -- sounds like to me they are going to rank the accounts from highest cash to lowest.   IMO, someone that is a retail investor like me will always be at the bottom of the list as I try and keep my cash invested.

As written in an earlier post, cutoff the third party tools and I will be leaving LC too.

Half Right

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Re: Loan Information Asymmetrical Timing
« Reply #40 on: June 18, 2014, 04:21:57 PM »
"Your Automated Investing account will be reviewed automatically up to four times per day to determine the level of available cash in your account, overall demand on the platform, and availability of Notes matching your investment criteria.  Automated Investing prioritizes accounts with more available cash as a percent of the overall account size and places orders for those accounts first. Automated Investing does NOT prioritize accounts based on overall account size or investment criteria."   (   http://kb.lendingclub.com/investor/articles/Investor/How-does-PRIME-determine-when-to-make-an-order-for-my-account  )

I love when you spin a document anyway you want, but if you bothered to read the entire paragraph you will see you are totally wrong.

rawraw

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Re: Loan Information Asymmetrical Timing
« Reply #41 on: June 18, 2014, 05:50:00 PM »
"Your Automated Investing account will be reviewed automatically up to four times per day to determine the level of available cash in your account, overall demand on the platform, and availability of Notes matching your investment criteria.  Automated Investing prioritizes accounts with more available cash as a percent of the overall account size and places orders for those accounts first. Automated Investing does NOT prioritize accounts based on overall account size or investment criteria."   (   http://kb.lendingclub.com/investor/articles/Investor/How-does-PRIME-determine-when-to-make-an-order-for-my-account  )

I love when you spin a document anyway you want, but if you bothered to read the entire paragraph you will see you are totally wrong.
+2

One point for the reply.  One point for the user name that compliments the reply so well.

lascott

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Re: Loan Information Asymmetrical Timing
« Reply #42 on: June 18, 2014, 06:26:24 PM »
"Your Automated Investing account will be reviewed automatically up to four times per day to determine the level of available cash in your account, overall demand on the platform, and availability of Notes matching your investment criteria.  Automated Investing prioritizes accounts with more available cash as a percent of the overall account size and places orders for those accounts first. Automated Investing does NOT prioritize accounts based on overall account size or investment criteria."   (   http://kb.lendingclub.com/investor/articles/Investor/How-does-PRIME-determine-when-to-make-an-order-for-my-account  )  I love when you spin a document anyway you want, but if you bothered to read the entire paragraph you will see you are totally wrong.

Seems like the sentences contradict each other as overall account size does matter.  A spreadsheet with some varying 'available cash' and 'account size' sorted by that percentage would be interesting to see how one would be prioritized.
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BruiserB

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Loan Information Asymmetrical Timing
« Reply #43 on: June 18, 2014, 07:28:32 PM »


Seems like the sentences contradict each other as overall account size does matter.  A spreadsheet with some varying 'available cash' and 'account size' sorted by that percentage would be interesting to see how one would be prioritized.

Not really a contradiction. They are saying that someone with a $2,000 overall balance with $200 cash available (10% of account value available) will have priority over someone with a $100,000 overall balance with $5,000 cash available (5% of account value available).  If anything this seems more favorable to the smaller investor as they will have less cash waiting for investment.  It also might slightly favor people who have rather restrictive criteria.....they will buy fewer loans, but as their cash balance increases they will move to higher priority making them more likely to find loans that meet their criteria.....but any increase in returns because of this may be dragged down by having more "dead money" tied up!



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Fred

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Re: Loan Information Asymmetrical Timing
« Reply #44 on: June 18, 2014, 09:24:04 PM »
With the overwhelming majority of investors, or more importantly the minority of investors with the majority of the money, using the Automated Investing Service they can foresee the upcoming Demand and try to match it up with the Supply of new notes in an orderly manner....

I don't see why LC needs to entice investors to use their Automated Investing in order to foresee upcoming demand.

LC loan demand is driven by both Automated Investing and non-Automated Investing investors.  LC has data on all loans, all notes, all investors, all borrowers.  LC has enough data to run all kinds of predictive analytics.  Having more investors with Automated Investing does not improve the predictions.