Prosper just suspended lending in order to create a secondary market for loans. (Essentially an exchange where you can buy/sell loans without waiting for maturity). The details for the new market place are found in an old blog post here.

• “Prosper intends to charge all selling Lenders a nonrefundable resale listing fee of $0.25 per Note being listed for auction sale, or $0.50 per Note being listed for auction with an automatic sale feature.”
• “Prosper also intends to charge the selling Lender a resale transaction fee equal to 1.0% of the sale price, subject to a minimum fee of $0.50, which will be deducted from the sale proceeds at the time a Note is sold to a subsequent Lender.”

Long term I think this is a great move by Prosper. The only problem I see is the ridiculous fees Prosper is charging the lender to sell notes. We’ll see how this works out when it comes out, but for now lending on Prosper will be dead for a few months. (Just when rates started to get attractive too.)

Random market thoughts:

• Feels like we’re in a secular bear market.
• Has anyone checked out the 1929 crash? This is a mirror of it up to this point.
• Don’t panic. Markets tend to overshoot on the way up and the way down. (Today was not panic)
• Don’t gamble. If you have lost control in the casino you will lose control in the markets, it’s the same psychologically.

With the recent financial mess I couldn’t help but think about how true this quote is. Here we are on the brink of financial armageddon and we’re held hostage by the finance industry of this country. As a result, congress has to passed a 700 billion dollar bailout plan to get the credit markets rolling again.

Anyway I’m not into long blog posts so here are some random thoughts on this on going ‘crisis’.

1) Does Congress need to pass this bailout plan? Yes, the alternative is probably much worse.
2) Safe banks to put money in or too big too fail? HSBC, JPMorgan Chase, Wells Fargo, Bank of America, Citibank
3) The fact we’re in a recession is now a reality for Americans.
4) We’re halfway through the bear market if you assume the financial sector bottomed out in July this year. (So one more year?)
5) Will we get an election rally into November? Or Will earnings sink the market?