String stretch. Most guys I know don't like a peep of that style for exactly the reason your are not liking your's right now. As far as the "small threads" coming out ofthe string, it may just need wax, are they small fibers or is your SERVING coming loose. I know some Bear bows have had serving issues but there a difference between some of the fibers being brushed and serving coming undone. I personally prefer a tubed peep because then I ALWAYS know that my peep will be WHERE it's supposed to be when I draw the bow.

Hope some of this helps and makes sense.