The demise of Lehman Brothers a year ago sparked a collapse in financial market confidence and set of a series of reactions that have spread hardship into the four corners of the globe.
Reuters News has charted the key events and their impact in “Times of Crisis” — a major new multimedia production on Reuters.com. (See it here.)
We’d like to add the experiences of Reuters readers. So, if you or your family have been affected by the events of the past year then use the comments section below to share your story.
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Simply read Greg’s submission above of 10/22. He has it exactly right. Professionally, after surviving in a tough business for 40 years I crashed two years ago and haven’t recovered yet. So I’m off in a different direction. Many people I know, with remaining assets have left the Country simply because they have given up on it.
- Posted by Andrew FranksI’m a sales manager of a small UK based company, a subsidiary of a large German company. The Managing Director was replaced, with staff levels reduced for efficiency by the new MD.Around 50% of the staff (10 people) were made redundant. Their jobs being out-sourced.
- Posted by RayHaving experienced a similar situation in the early 1990’s I’ve immediately reduced my outgoings as much as possible. Shopping around for everything from cheaper food to cheaper house insurance. I’ve also concentrated on clearing debts and creating a lump sum cash “battle fund”. At the same time closely watching day to day expenditure.
If I’m made redundant I can survive for a year with no work at all, for 3 years if I have periodic temporary work on a much reduce salary. After 3 years I would have to sell my house, realising capital and reducing my debts to zero. I would then rent a small flat, doing temporary work to finance myself in the longer term. This would, however, seriously damage my retirement plans.
At the moment I’m fine but many people I know are not.
Taking each month as it comes, with a clear strategy planned if things go badly, helps me sleep at night.
Unfortunately, though, like many I do have a sense of bad news being just around the corner.
In fact the crisis did not change my life at all. For a decade I did not understand how the system could sustain itself. My banker kept offering me credits which I kept refusing saying I did not need any to buy say a washing machine when I can save a few months to buy one. His point was that refusing his offers would leed me in troubles since I would not have a credit rate. Therefore banks would not know if I am trustful… My point was that a banker should recognise a good client when this very client shows he manages his budget to perfection, spending only what is necessary, saving, investing properly and NOT overspending to the popint of needing a credit. He found me old fashioned. I found him dangerous. I was right ! Having no credit to payback, some savings and a lifestyle that matches my resources that crisis simply passed on me like the wind.
However I will never forget it. I will never forgive my bankers. AND I will always make sure I do not depend on them at any cost.
Try to do the same…
- Posted by GregLost my job, along with 33% of my entire floor, because customers had to cancel or re-price all of their steel orders before they were even delivered. There wasn’t a shred of liquidity in the capital markets, and nobody could take on more inventory, so everyone had to shed employees. Thanks for the “lesson”, Wall Street!
- Posted by JoeIn my family we had a stable business for 38yrs. We did see some ups and downs but nothing that really made us worry about our very own survival. Today the businesses we deal with are all going out of business. Our income is down by 90%. For the first time we are living on credit cards. I don’t see an end to it. In fact I don’t even know how I will pay for next month.
- Posted by Wuptainterest. Would you take out a loan with such a high rate? New Mexico has passed laws which specify such loans as predatory lending and prohibit them. Only those who have no possibility of getting other lending would consider such a loan.
Our financial system is in serious danger of total collapse. As a result, the banks have recieved major financial bailouts of billions of dollars. Defaults are expected to skyrocket in the near future.
A major factor in the dramatic increase in defaults is at least partially the result of such exorbitant interest rates by the credit card companies.
A card holder has been very careful never to be late sending in his payment. His minimum payment is 100 dollars per month. One day, he mails in a payment on one of his utility bills, and for some reason it is credited a few days late. He is then listed as being in arrears and is reported. Thanks to current regulations, the credit card company is now able to raise his rate from the initial 8% to 25%. His minimum payment jumps from $100 to over $200. This happens even though his payment was received on time.
The credit card issuerer is now able to collect an extra $1200 or more per year because the customer has a late payment record, even though he has never been late with one of theirs, and may not even have been late sending any payments. Suppose he, like many people, has 3 cards with similar balances. That is $3600 a year of payments he neither incurred nor agreed to. I believe such practices are even more predatory than the companies accused of predatory lending.
While he was able to make the $100 payment, the $200 payment is a problem. If he has 3 cards, it is much worse. A payment is delayed, and a late fee, often $200 or more is added, forcing the card holder further in arrears. It is very probable that the card holder will end up in default, and may loose everything if he happens to loose his job.
Check cashing and title loan companies are prohibited from charging such exorbitant interest rates under state law, and cannot increase rates after the loan is made. Credit card companies are governed by federal alw and appear to be exempt to such restrictions.
Stores offer a no payments and no interest for six months or even up to 3 years programs. Unfortunately many people forget how much they are buying. As a result, since they are not making payments, and have 3 years before the first one is required, they may spend more than they will be able to pay for before the first payment is due.
Even if they are able to make the payments, by the time payment is required, the product may be showing serious wear. The consumer will probably be stuck with it until it is paid for.
Some of these programs are even worse. One I looked at specified that as long as payment was made before the end of the free period, no interest would be charged, but if the item waqs not paid in full, interest would be retreoactive from the date of purchase. When the first payment is due. the purchaser’s debt may be more than half again larger than the initial purchase. The customer agreed to those terms, and will be stuck with paying off the larger amount because he didn’t read or understand the fine print.
If this results in late payments, fees willbe added, again pushing the consumer further into debt. A recent news report indicated that warning the lender that you are struggling may not get any help, as it appears to be in the companies best interest to allow the customer to get behind, since it increases their potential earnings.
Regulations which allow such practices are at the root of much of the current financial crisis. Despite our consumer protection programs, it is still very much a “buyer beware” situation in our credit markets.
As more and more jobs disappear, people are discovering they are enslaved by their debt. it would be worthwhile to remember the biblical statement in Proverbs 22:7, “The rich ruleth over the poor, and the borrower is servant to the lender.”
As people learn how the credit system has trapped them, they are frequently unable, and often afraid to borrow more money. This will probably prevent the stimulus packages from producing results right away, making it even more risky for others to borrow.
- Posted by Yahiya SultanI have been unemployed and alternatively underemployed since 2003. I have 30 years experience and a terminal doctoral degree. I was also in my late 50’s and a disabled veteran. I struggled to feed and house myself, spending most of two years in a motor home in the Mojave Desert. I applied for, and received SSA retirement benefits in February 2008, when I finally made it to 62. Even with these benefits, I am still officially below the poverty line. But I can survive now. There have been many areas of endemic and systemic poverty for a long time. While I am distressed that so many of my acquaintances have come to know what I have endured for themselves, perhaps now we can join together and force the systemic reforms that all of us need to recover and rebuild an economic structure that provides the necessities of life for all of us without regard to our employment status. Register and vote. Demonstrate. Speak out at the meetings what ever and where ever they are. Vote with your wallet. Do what ever you can to trash the politically and morally bankrupt system of government by corporation (classic fascism). We have an obligation to children and grandchildren everywhere to try, even if there are some unavoidable casualties. Do it while you still have the ability. 1917 is here. Don’t let the bad guys win again.
- Posted by John D. Coffey, J.D.Crisis? What Crisis? In the U.S. life just went on! People lost their jobs, and houses in the U.S. but never were in a crisis! Hunger is rare, less likely die from it. People get help from left, right, up and down. There’s foundations and organizations that will prevent the average US American from not having a home or something to eat. It’s ridiculous that most US American’s caption this economic downfall as a crisis. Want to see a crisis? Go to Argentina…thats were Democratic Capitalism is most highlighted at. That’s were US’s expenses and mistakes land, or better said in South America. Not only Capitalism, but all sorts of Government types, because governments never work! We(S. Americans) are being used, not only by US banks but also European ones. We, along with many third world countries, are the the modern slaves. So if you ask me about a transparent but white crisis to US Americans! MY RESPONSE IS THAT WE NEED “THE VENUS PROJECT” designed by Jacque Fresco!!!
Thank you and enjoy everyday you got, while LITERALLY thousands die per day because of this CRISIS!!!
- Posted by Ignacio R.Crisis? what crisis? here in Singapore, life is wonderful!
Property prices are climbing and despite regulations, the froth remains. New immigrants are coming in and the stock market has risen more than 60% since last Sep.
The main shopping area is bursting with shoppers!
Come over here! Its just great! Jobs aplenty with mega projects in the brand new Integrated Resorts thats managed by Las Vegas Sands, there will be 20,000 vacancies! and thats just one.. there is another on Sentosa Island which has beach front properties that are still selling over US$1 million each!
Lots of young people too!.. all under 40 years old!
- Posted by RonNo earthquakes,no El Nino, no terrorists, no greedy bankers, no snow and no floods… just plenty of sunshine! and with ultra fast internet services, major brand names such as Microsoft, BHP, Toyota, HSBC ..
this is where the growth will be…come now while there is still room.. ( up to max of 8 million people on a 500sq km island)