Worst Month Yet

[Fred93]

I mean c'mon, tax free bonds have better returns than LC p2p right now.

Nonsense.  If you look at 1 to 1.5 year duration tax free  bonds, you'll have trouble getting 1% let alone 5%

I'm not taking money out.

[anabio]

I mean c'mon, tax free bonds have better returns than LC p2p right now.

Nonsense.  If you look at 1 to 1.5 year duration tax free  bonds, you'll have trouble getting 1% let alone 5%

I'm not taking money out.

I somewhat agree with fred93. There is no way to get LC interest in any type of "safe" savings/CD/bond right now.

However, I am pulling money out. I keep vacillating between there will be a big recession in the next year to there won't be. When I started pulling my money out of LC 2+ years ago I thought there would be a recession within a year of the next presidency (you know...the new president forces a recession in order to get it over with and blame the old administration). Then does everything in his/her power to end it before his/her term is over so he/she can boast that they ended the misery the previous administration caused).

But with Trump's public works plan I thought maybe the recession would be delayed. Now I am thinking that plan is too little to late.

It all comes down to what I am comfortable with and I am not comfortable with LC. I could very well be wrong and there is no recession in the next 3 years...but if I came back to LC I would worry every day about "maybe there might be". So, for my temperament anyway, 3% or difference is not worth the aggravation....7% would be but not 3%.

[Rob L]

Think we were hit with a double wammy of lower interest rates over about 18 months and degredation of borrower performance more recently. Interest rates have been significantly increased and that's a big plus. LC claims they've tightened their lending standards but we have yet to see evidence of that. Hope it's true. Yes, I scaled back my investment in July-August by about 50% but have now resumed reinvestments and have zero cash available.

FWIW the loans I'm buying today on average have the best risk / reward score of any time since I began with LC four years ago. However, risk has definitely risen and it's by no means certain I'm adequately reflecting this increased risk. Time will tell, but I'm strangely optimistic. There's either a light at the end of the tunnel or an oncoming train.

[jheizer]

I am collecting cash from payments, but just letting it sit in LC for now.  All of my loans are from 2015 and early 2016, which has shown to be a dud vintage.  It seems like the vintage is more important than just about anything else right now.  Until Fred93's awesome vintage chart looks better (http://forum.lendacademy.com/index.php/topic,4113.msg38557.html#msg38557) I am on hold.  Maybe I'll buy some A-C grades before that, but we'll see.

[thezfunk]

I have just been buying aged notes on the secondary platform with LendingRobot at least 10 months old.  I have yet to graph my misery like the rest of you as I haven't had the time.  I should post my login information so one of you can do it for me 

I stopped trying to think about it. 

However, I did sell all my equities in my Roth IRA and they are sitting in cash and I moved my entire 401k out of equities and in the safest option I had (I wish cash was an option).  I have a feeling after the baseless euphoria wears off...there might be some revaluation in the stock market.  Just a hunch.

Be fearful when others are greedy and greedy when others are fearful.

[dr.everett]

I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.

[fliphusker]

Are you seeing that FICO has really dried up?  Might actually start having to buy notes with a markup that meets my YTM. 
Sure wish I would have just started out with FOLIO as notes from the primary market just continue to tank. 

I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.

[dr.everett]

Are you seeing that FICO has really dried up?  Might actually start having to buy notes with a markup that meets my YTM. 
Sure wish I would have just started out with FOLIO as notes from the primary market just continue to tank. 

I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.

Nope- still pretty strong buying for my FICO criteria on Folio. I just can't get my problem FICOs sold fast enough for my liking. I'm not willing to take more of a bath on them than I already am.

[mchu168]

Is anybody NOT taking money out? I know I am taking out all the cash as it comes in now and investing elsewhere. I mean c'mon, tax free bonds have better returns than LC p2p right now. Do they think investors will just accept these returns? 4-5% is not worth the trouble/risk.

Not sure what you're talking about. If you've been in muni's over the past few months, you've experienced (relatively) big draw downs and underperformance vs. most other asset classes. Depending on the economy and the duration of your muni portfolio, more pain could be in store.

I'm not taking money out but am not adding either due to my concerns about the credit cycle peaking out soon.

[Larry321]

Here is more confirmation of the vaidity of my devcision to migrate out of LC.

http://seekingalpha.com/news/3232417-lendingclub-loss-rates-picking-compass-point?app=1&dr=1&uprof=45&utoken=b62127f07c7665796cfda9e0cbac8e9b707e3d77#email_link

I have been doing well with Fidelity using the advice I get on www.fmandi.com

[Rob L]

But with Trump's public works plan I thought maybe the recession would be delayed. Now I am thinking that plan is too little to late.

Even the folks that officially date the start and end of recessions only do it after the fact.
Doesn't seem to be one imminent but over a three year period it's a really tough call.
Here's the latest from dshort; I think a reasonably credible source (if there is one in this matter):

https://www.advisorperspectives.com/dshort/updates/2016/12/22/recessionalert-weekly-leading-index-update

[anabio]

But with Trump's public works plan I thought maybe the recession would be delayed. Now I am thinking that plan is too little to late.

Even the folks that officially date the start and end of recessions only do it after the fact.

You  are so true on that point. I can't disagree.

Doesn't seem to be one imminent but over a three year period it's a really tough call.

Might have to disagree with you on this one...(warning...I'm generally a pessimistic kind of guy when it comes to the economy.)
But it's a gut feel. Over the past 4 or so months I have had way too many loans go grace/late/default that have never even missed a payment before...and a lot of those notes have 27-31 months worth of on time payments. Why do so many with that kind of history suddenly go bad? My loans are 2014, not the "toxic" 2015/2016 era. A lot of them had an unremarkable FICO trend that all of a sudden dropped big time from one month to the next. That drop came before or at the same time as their going into grace so LC loan could not have had much impact on that FICO drop. What would? Well...losing a job would definitely fit the bill. Enough people lose their job and viola=recession.

To be honest, I truly believe that we lend money to the "fringe", those who can't borrow money any other way to pay off their other higher interest debts. Who feels the hint of a recession first? The fringe is my guess.

Of the 24 notes I currently have in 31-120 late, 14 of them were never lates.  4 had 1 or a few graces. Only 6 had a lot of grace or worse lates.

Something is going on.

[Fred93]

Of the 24 notes I currently have in 31-120 late, 14 of them were never lates.

Something is going on.

    All loans are "never late" until they ARE late.   

[fliphusker]

Of the 24 notes I currently have in 31-120 late, 14 of them were never lates.

Something is going on.

    All loans are "never late" until they ARE late.   

Define late. 
I guess I am the silly one who does not give up on late.  I ride the rails on Folio, on late. 

[Rob L]

To be honest, I truly believe that we lend money to the "fringe", those who can't borrow money any other way to pay off their other higher interest debts. Who feels the hint of a recession first? The fringe is my guess.

Maybe a nice new recession leading indicator.