>>"The global financial crisis is set to get worse, with a large US bank likely to collapse in the next few months, a former IMF chief economist has warned."
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http://newsvote.bbc.co.uk/1/hi/business/7569903.stm>
>Could it be because people are withdrawing their money?
Last winter I heard a guy complain on the radio about a crisis of trust, about how the consumer confidence index is hitting record lows etc etc. Wow. Give me a bucket for my tears.
Of course consumer confidence is at a record low. Why would anyone trust these guys? They have used and abused every trick in the book, and wrote additional volumes.
Example 1: post Katrina, thousands of people find that their insurance won't cover the damage from the water; their contracts cover only direct damage from hurricanes. Huh? The whole idea of insurance is that it gathers money from everyone, a bit at a time, so that there's a guaranteed lump sum sitting there just in case. And they are supposed to cover the expenses and make a bit of profit at that. Now all of a sudden the lump sum isn't there? Thousands of people have become homeless just because you've found a loophole? Now that builds trust.
Example 2: changes to bankruptcy laws. If you go down, you still owe your bank forever. If your bank goes down, nobody owes you anything. Yep, trust them to make laws to benefit both sides.
Example 3: people getting evicted from apartments even though they were never late paying their rent. Because their landlord isn't much of a lord and has no land - he borrowed it all, and he can't make the payments. Whoever is repossessing doesn't just take over, the houses (for some mysterious reason still called "homes") must be vacated. Now trust that everything will be fine as long as you keep paying.
Example 4: retired couples taking medium size loans for maintenance of their houses - $5K or $10K, mortgaging the house as a collateral. The interest rate is variable, and at some point they cannot keep up. They lose their houses. A thousand of such houses in just one area of the city. The houses cannot be sold, because there are just too many of them, they aren't the top notch properties that realtors' mouths would water over, and they're already looted for parts. So they are abandoned, and the city decides to tear them down, so the prostitutes and gangs wouldn't gather in them. The cost of cleanup runs at about the same level as the initial debt. Total loss: thousand houses, thousand homeless families, thousand unpaid loans (or partially paid), and huge loss in the value of the neighbors' houses.
Example 5: guys who help refinance a loan so you get to keep the house... by reassigning it to them. And they actually don't help pay it off with their own money, they borrowed. They go bust because of some other equally risky deal, you lose the house you were paying to keep.
With all these businesses out there just inventing schemes to squeeze more money out of the unsuspecting suckers... yep, I'm endlessly saddened by the crisis of confidence.
And just another example, much cheaper:
http://www.hrtransit.org/faresandinformation/fares.html...
I just wanted to see how can I get to the boardwalk/beach by bus, in case I don't feel like driving and don't feel like wasting half an hour finding a place to park. When you discard the Loop (whatever that is... didn't know a loop is a means of transportation) and the militaristic rides, there are four transportation systems. Are the tickets for one valid for the other? Do I have to buy a new ticket if I switch from one to another? Do I have to know all of their names before I can use the system? Is it a system at all? Know what, I'm not going, I simply can't trust the instructions - it takes four screenfuls just to list the prices. Not to mention that the very idea that one would need instructions to ride a bus is ridiculous. In most of the cities I've been to, anyone would explain everything to me in about four sentences - including the subway in NewYork, DC, Budapest, Moscow and (then) Leningrad; the bus in several cities (including Orlando!). This... just too complicated.
