PWCC expands its lending activities

rjackson44 · #1 04-17-2023, 05:00 PM

I have a vault at home with this bodyguard

parkplace33 · #2 04-17-2023, 07:05 PM

Could you imagine a �bank run� on pwcc vault cards? Yikes.

Peter_Spaeth · #3 04-17-2023, 07:25 PM

Quote:

Originally Posted by parkplace33

Could you imagine a �bank run� on pwcc vault cards? Yikes.

If enough people get concerned about their viability that will almost certainly happen.

raulus · #4 04-17-2023, 07:33 PM

Quote:

Originally Posted by Peter_Spaeth

If enough people get concerned about their viability that will almost certainly happen.

Does anyone feel like a run on the vault would have the same impact as a run on a bank?

Since the business model is so different, it seems like the impact would be different. I mean, it would definitely reduce their business with people selling from the vault. And it would reduce their ability to basically move stuff from one owner to another within the vault while taking a commission without really doing much. But it�s not like they would run out of cards to give back to their depositors because they�ve loaned them all out.

Plus I suspect that for anyone with a loan against their cards, to get their cards back, they�d need to repay the loan first. So if PWCC is hurting for cash, getting those loans back might actually help their short term cash position.

I am intrigued by the inference in the video clip that loans would be made up to 100% of the sales price. Everything in their marketing materials they�ve sent to me suggests that 40% was the limit. But maybe I�m not eligible for their best loan terms.

Peter_Spaeth · #5 04-17-2023, 08:11 PM

Quote:

Originally Posted by raulus

Does anyone feel like a run on the vault would have the same impact as a run on a bank?

Since the business model is so different, it seems like the impact would be different. I mean, it would definitely reduce their business with people selling from the vault. And it would reduce their ability to basically move stuff from one owner to another within the vault while taking a commission without really doing much. But it�s not like they would run out of cards to give back to their depositors because they�ve loaned them all out.

Plus I suspect that for anyone with a loan against their cards, to get their cards back, they�d need to repay the loan first. So if PWCC is hurting for cash, getting those loans back might actually help their short term cash position.

I am intrigued by the inference in the video clip that loans would be made up to 100% of the sales price. Everything in their marketing materials they�ve sent to me suggests that 40% was the limit. But maybe I�m not eligible for their best loan terms.

Lending 100 percent of the value of the collateral or anything close would be incredibly stupid, I don't believe it.

Republicaninmass · #6 04-17-2023, 08:55 PM

Issue is pwcc allowed shilling to pump these prices up so high even 50% of today's ltv will leave THEM holding the bag.

Its almost self fufilling they lose everything and receive pennies on the dollar after the forced sales on bad loans..

BobC · #7 04-17-2023, 09:54 PM

Quote:

Originally Posted by Republicaninmass

Issue is pwcc allowed shilling to pump these prices up so high even 50% of today's ltv will leave THEM holding the bag.

Its almost self fufilling they lose everything and receive pennies on the dollar after the forced sales on bad loans..

Peter, Nic, Ryan, all excellent points, agree with everyone. If that video is even partially true, that is not a great sign for what may be happening. And Matthew, I think your point was maybe best of all. LOL

And Ted, if what you're suggesting is even partially true, that would demonstrate a level of business stupidity that is not seen very often. I had heard that 40% number before in regard to how much was supposedly going to be loaned against a card's value. But if in some cases it was actually going as high as 100% loan-to-value, that is pure insanity from a business aspect. And is especially and even more so if as you're suggesting, there may have been shilling activities involved in the realization of some of these card values used to then determine and set how much would be loaned. For a potential lender to be a party to assist in the setting of such false, overstated values, to me that would be like playing a business version of Russian roulette. From a business standpoint, you're just asking for it IMO. Should be reeaaallly interesting to see where this may end up leading to.

Casey2296 · #8 04-17-2023, 10:05 PM

I'm in private equity real estate loans, it's a simple equation, collateral + risk = rate, term, and loan to value. It's an interesting model to me, no foreclosure since I already am in possession of your collateral, more like a margin call, if the price of your 48 Jackie drops below our agreement and you can't pay the delta within 30 days the card is mine, I'll auction it off and get my money back plus some since I only gave you 50 cents on the dollar. These vaults a smart to only offer 12 month terms since the market is so violate. I would guess fair market rate should be in the 12-14% range and an ltv of 50%, and that's on solid pre-war, modern? Maybe 20%. And when you add the 1% transaction fee the rate of return starts to push the ROR an additional percentage point.

I can see why hedge funds would gladly fund a line like this with that model.

BobbyStrawberry · #9 04-17-2023, 08:01 PM

Quote:

Originally Posted by rjackson44

I have a vault at home with this bodyguard

I'd trust her a lot more than PWCC

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