P2P Lending / NFT Lending Forum

Another quick look at the Q2 presentation reports 200k+ self directed individuals that invested $155m. That's $775 per investor in Q2; or $258 per investor per month; or a little over 10 notes of $25 each per investor per month.  The self directed investor business isn't exactly booming https://forum.lendacademy.com/Smileys/default/shocked.gif" alt=":o" title="Shocked" class="smiley" />

I'm surprised by this since I think it is only a matter of time before LC shuts down individual participation completely. According to their most recent quarterly report individual investors now represent only 5% of originations (lowest % ever):

https://ir.lendingclub.com/Cache/1001255340.PDF?O=PDF&T=&Y=&D=&FID=1001255340&iid=4213397" class="bbc_link" target="_blank">https://ir.lendingclub.com/Cache/1001255340.PDF?O=PDF&T=&Y=&D=&FID=1001255340&iid=4213397

Why they continue it at all is an interesting question. Maybe they still make a bit of money from it but it seems pretty likely it's dying and LC will eventually pull the plug. The only reason I can imagine is that if LC shut it down they'd have to write off all the assets they carry on their books for this part of their business (software, computers, leases with cloud services providers, etc.). Might be a pretty big hit on the balance sheet that could hurt their stock price but I haven't done the research to figure out how big.

A recent YouTube video about P2P lending in the UK. Thought others may find it interesting.
The YouTube channel is PensionCraft and website is pensioncraft.com. FWIW I think the content is very good.

https://www.youtube.com/watch?v=r6hm9SxNdlg" class="bbc_link" target="_blank">https://www.youtube.com/watch?v=r6hm9SxNdlg

We are living in interesting times. The Federal Reserve has reversed course and lowered its Fed Funds Rate on 7/31 by 1/4%. The Fed also stopped letting bonds run off its balance sheet (quantitative tightening) two months earlier than planned. Treasury bond rates of all maturities have been steadily falling since October of last year and have rapidly and dramatically fallen over the past few weeks. They are basically within 0.25% of the multi decade lows of July 2016. These are the facts; there are many speculative reasons for them.

According to those still actively purchasing notes, LC returns are looking better than they have in years. There are clearly many risks of course. Where is that crystal ball when you need it?

https://i.imgur.com/5aFVprn.png" alt="" class="bbc_img" />

After posting its quarterly earnings after the close yesterday, LC closed at $13.00 today after touching $12.67 at its lows.
It was a loss at the close loss of -4.06%. The S&P 500 rallied 1.4% after its worst day this year yesterday.
I'm more familiar with the LC price before its reverse 5:1 split; today that is $2.60 at close, $2.53 at its lows.
LC's all time inter-day low was $2.46 pre-split on 12/26/2018, coinciding with a severe market downdraft.

Looks really bad. Makes the national debt an Fed Balance sheet seem almost trivial.
Can you handle the payments?  https://forum.lendacademy.com/Smileys/default/grin.gif" alt=";D" title="Grin" class="smiley" />

Semi-retired, too much time on my hands, so I do this. I really need to get a life!
Thought some might find this interesting or at least amusing. Any comments will be appreciated.

A little background will be helpful. The bulk of my non-real estate retirement assets are Traditional IRA investments. My LC and Prosper accounts were Traditional IRA. We all know Traditional IRA distributions are taxed as regular income. I always bought into the idea that my tax bracket in retirement would be lower than in my prime earning years so, as I was always at or near the top bracket, I favored the Traditional IRA. I also have a small but non-trivial Roth IRA that is near the 5 year age threshold. The year 2019 holds a unique opportunity for me as it is my last year before I have to take annual RMD's from my Traditional IRA accounts. RMD's will tie my hands with regard to minimum distributions after 2019. My earned income this year is low; thus the opportunity and two questions to be answered.

1) Was my decades old bet that my taxes would be lower in retirement for this money than at the time I earned it correct?
2) The opportunity presented to me is to convert some of my Traditional IRA money into my Roth (and pay taxes on that amount). Optimally, how much?

The remainder of the post refers to the chart below.

The top blue line is my income weighted total effective tax rate (25.83%) that I actually paid on income. Total taxes paid (FED + Virginia) divided by total income over the years 2000 - 2018.

Question 1 is very clear; any amount I sensibly chose to convert is dramatically better than having paid taxes on the income when received.

Question 2 has a lot of moving parts. I have the flexibility to convert as little or as much as I want from Traditional to Roth IRA. It appears that the best choice is the inflection point where the Federal marginal bracket steps up from 12% to 22%. There is no way to avoid the taxation of 85% of Social Security benefits or the Virginia bracket increase from 2% to 5.75% (that is if I want to convert any money at all). The sweet spot seems to be where the Fed bracket steps up from 12% to 22% ("Target Income") and most certainly before the Virginia age deduction is phased out as income increases. "Target Income" gives me an effective total tax rate of 9.35%. I'm hoping to manage it to 11% or less in the future (dealing with RMD's). That's less than half the tax I would have paid at the time the income was earned.

Does anyone but a totally deranged soul perform calculations like this (i.e. Fed tax brackets and VA age deduction phase out, and enjoy it)??  https://forum.lendacademy.com/Smileys/default/shocked.gif" alt=":o" title="Shocked" class="smiley" />

https://i.imgur.com/N0HhS0U.png" alt="" class="bbc_img" />

Decided to take a look at my LC account, holdings details.
Under Charged Off there's another status "Cancelled and Cancelling".
Maybe it's been there for years but I don't recall seeing it before.
Is it a new thing or just something I never just noticed before?

As of yesterday 7/8/2019 LC implemented a 5 for 1 reverse stock split.
Owners now have one fifth the number of shares they owned the previous day.
The current price is $15.25 per share which would equal $3.05 per share (pre-reverse).

Might be a good thing as I seem to remember that many large mutual funds have rules against holding stock priced less that $10.00. I've been a bit more positive on the company since they announced they were moving 350 jobs to Utah. A much needed step in the right direction.

https://forum.lendacademy.com/index.php?topic=5135.msg44591#msg88888888Quote"> from: Fred93 on May 14, 2019, 12:39:26 PM

My how times have changed!

Did not get one  https://forum.lendacademy.com/Smileys/default/cry.gif" alt=":'(" title="Cry" class="smiley" />. Winding down.

https://forum.lendacademy.com/index.php?topic=5112.msg44540#msg88888888Quote"> from: SeanMCA on April 23, 2019, 09:37:09 PM

I have a relative that over the past year had to quit her job to provide full time care for her ailing husband, badly injured her back while doing so, and ultimately her husband passed way. The financial impact was a loss of about 50% of spendable income and naturally she began falling behind on everything from her mortgage to unsecured loans to revolving debt. I'm trying to help her out of the problem and have access to all her records. There's four debt accounts and she is behind four or more payments on most of them. The interesting part is that only one of the creditors has reported its account 60-89 days late and her Vantage 3.0 score remains "Fair" at 655 from Credit Karma. The reporting creditor is the one owed the least and their strategy is simple; pay me now or I will kill your credit score. In my simple mind that was the strategy of all creditors.

It had never occurred to me that it wasn't necessarily in the best interest of a creditor to promptly report non or late payments. Much better to wait and hope the debtor is able to get another loan since they might be able to seize some of that new money for themselves. I would not be the least surprised if my relative could get a loan from LC or Prosper today. She won't of course. More debt is the last thing she needs. This lender behavior is an entirely new insight for me. How naive!

https://forum.lendacademy.com/index.php?topic=4950.msg44481#msg44481">Quote"> from: panther02912 on March 24, 2019, 02:20:16 PM