I assume some people on here use the RateSetter site to lend money. I saw the $75 offer a few months ago and did not take it. I have just opened an account in the last two weeks. I have had lots of money in savings accounts getting 3%, but its time to get a higher return.
Just wonder if anyone has been looking at the behaviour of the rates on offer for a reasonable amount of time.
Specifically, I put in orders to lend at 5Y for 9.3%. It was about 0.3% above the "going" rate when I submitted the order, but the amount of money below 9.3% was still relatively low.
I have been watching the market very closely. On Wednesday 21 June at 9.30pm, the market looked like (these are the actual values at each rate, not the cumulative values up to the rate)
9.3% $108 000
Greater than 9.3% $200 000
So there was only $4200 at rates less than 9.3%, and I was near the start of the 9.3% orders in terms of the time the orders were placed (I placed the order the week before). All up there was the $4200 at 9.1-9.2% ahead of me, and then about $8000 at 9.3% ahead of me. So a $13000 loan would likely have got me in the game.
That's the lay of the land Wednesday night.
I looked at it Thursday morning. Some economic illiterates have dumped cumulatively $200 000 more money between 9.0% and 9.2% (about $100 000 @ 9.0%, $70 000 @ 9.1% and 30 000 @ 9.2%). It did not come from lots of people. It came from a few people (obviously not thinking or having any previous knowledge of the market in the last week) just dumping.
I looked at the market yesterday. They (the borrowers) managed to push through > $200 000 of loans at the lower rates. You could see the $100 000 lender orders dumped at 9.0% , and then all the large borrower orders came in. Borrower orders of $16 000 at 8.9% and $60 000 at 8.8% (pulling the market further down).
Now if you go and look at the 5Y market now, there are clear blocks of money that remain.
9.0% $12 500
9.1% $18 800
9.2% $128 600
9.3% $161 100
Greater than 9.3% $180 000
The 9.3% people (including me) are all stuck there still waiting for our turn after getting to the front of the 9.3% line.
Lots of people are looking to cut in, or have got impatient waiting at 9.3%, and have moved to 9.2%
God, so annoying.
Here I am trying to play a nice well thought out game of poker, and then some impatient and obnoxious people come in an break it. Apparently people have never heard of slow playing. They could have got their money into loans without damaging the market price so much.