Tuesday, September 22, 2009

Trust Erodes

Trust, that vital, ephemeral spark that allows civil society to function and gives me confidence my orders from Amazon will be filled properly, continues to erode.

HSBC staff carrying personal alarms in case credit crunch customers get angry
by Sean Poulter, The Daily Mail Online
HSBC staff have been issued with the latest hi-tech personal alarms to call for help if customers get upset or angry.

The measure comes against a background of increasing frustration that High Street banks are pulling the rug from under the feet of customers...

...A businessman in the North West revealed he arrived at a branch of HSBC in Manchester to be met by what he was told was a new risk management strategy. This involved the bank staff being required to take personal alarms into meeting rooms.

The man asked why this was necessary to be told: 'I guess there will be some difficult conversations with clients happening at the moment.'

A spokesman for the Federation of Small Businesses said: 'We have been worried for a while that the relationship of trust between banks and their customers just doesn't exist any more...

Viewing it from a different perspective, people are doing unto the big banksters that which has been done unto them. They are getting angry. They are seeing through the spin and propaganda that most of us grew up believing about trusting business relationships. They are feeling some power, even if it is just venting anger at banksters. And they are liking it. The banksters, on the other hand, are feeling threatened. And with good reason.

As the ever-perceptive John Robb puts it:

...People are learning to do what businesses do (they learned it the hard way: businesses they have relationships with routinely default on or avoid upholding their contracts, from insurance coverage to pensions) when their investments crump: they default. In this case, it's people learning to walk away from a big mortgage on an underwater property. Who's doing it? The people with an ability to pay and great credit scores. The reason: they understand that the short term pain of a lower credit rating is nothing compared to a crushing debt load on an asset that may not recover to a level sufficient to cover the debt until 2032 (according to recent estimates).

Moralistic behavior, in this environment, is for chumps. Legalistic behavior is becoming the new standard.

If he's right, that is just more sand in the gears of the economy. Socionomically, it all fits. We'll get to see it fully expressed when this short squeeze evaporates and the markets turn down again. HSBC banksters may not be going into meetings with little alarms. They may be going into meetings packing heat.

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