I know this has been talked about on these boards at length, but do I have it right:
- notes at LC are issued en masse 4 times a day.
- the second (and I mean the absolute second) those notes appear on the platform, large institution/s with endless amounts of cash immediately suck most of them into their LC cache for review, temporarily locking them out to most small investors (the peer investors).
- then, after a relaxed review of those notes, the undesirable ones get tossed back onto the platform again, but often into the clutches of yet another institutional player - and the notes quickly disappear again.
- this process, where notes get pitched back and forth, gets repeated over and over again (in what seems like milliseconds), until they finally get fully funded.
- the small investor (the peer investor) must be quick and/or lucky to get one maybe two notes a session unless he/she is not picky on note quality.
- so the small investor (the true peer investor) who generally has limited amounts of cash, and maybe limited software capability, has very little or no chance of competing with all this.
- the small investor then is at the mercy of the big investor/s for notes, or for leftovers deemed too risky by the big guys to invest in.
- so the small investor (the true "peer" investor) starves while the big guys feast.
- P2P lending then is now mostly institutional lending, and we seem to have come full circle again in the finance community, where the big guys call the shots. Nice concept, P2P - if it only worked.......
Now I know what I just wrote isn't always true or always happens, but I'm speaking in general terms where those things happen a lot or most of the time.
Did I get it right?
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