Perspective

The most infuriating part of the current financial/housing/credit hysterics is the lack of perspective: Comparing the current state of the economy to the Great Depression. The lowest levels since 1932. The highest TED Spread since there was a TED Spread. The worst economic outlook since ever. Stay tuned, because you might miss the world coming to an end after thhhhheeeeessse messages. Comparisons that make no sense. Comparisons that stink to high heaven. Cynical comparisons to keep frightened people stay tuned to CNBC, Fox Business and all the other blowhole networks.

Just like the reaction to 9/11, media tends to overblow threats and uses fear as a tool to keep people tuned to their programs. Don’t get me wrong: This is a bad crisis. And many people will have to pay with unemployment, more foreclosures, major financial problems and extreme stress levels. But just like a hypochondriac with a serious disease, the media tries to find even more sicknesses and symptoms to make the bad even look worse.

In the meantime, continue to live your life, work your way through it, enjoy your family and friends, cherish the positive changes that will come out of this new challenge and, most importantly, stay away from the Business Channels as far as you can. And trust in the perspective time offers you:

“It is said an Eastern monarch once charged his wise men to invent him a sentence to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words: “And this, too, shall pass away.” – Abraham Lincoln

Banking Crisis – Another failed opportunity

We moved from housing crisis to credit crisis and are now in the middle of a banking crisis. First Bear Stearns, now IndyMac – who’s next? Wachovia is mentioned in various publications, WaMu seems to be in trouble (Where’s the Whoo Hoo when you really need it?) and ABC spills out a list of banks that are close to a meltdown. Urban myths are rearing their ugly head and there’s a feeding frenzy in the media (Just check out Drudgereport and you know what I mean). This is a full-fledged crisis, one that calls for crisis management, blogger outreach, connecting with nervous customers on a personal level, being open with your situation assessment and, and, and.

And what are banks doing?

You go to their corporate sites, scan the blogs for outreach and any interaction with their customers – absolutely nothing. As we know, banks are in the confidence business. That’s what they’re all about. Nothing else. No bank in the world has enough money on hand to survive a bank run. Just ask IndyMac. The Citigroups, BofA’s and Wells Fargo’s of the world have no way of surviving a bank run. Not even them.

Banks demonstrated confidence through shiny skyscrapers and glossy brochures. But in today’s world of free-flowing rumors, these old confidence builders don’t work that well anymore. We’ve been through the Enron disasters and know that we need to look under the hood. But the banks hide behind their old facades and don’t let anybody in. The problem is that they make themselves increasingly vulnerable to new forms of communication. A bank run can start within a few hours and ruin their business even quicker. Hiding is not an option.

My plea to banks: Open yourself up. I’m not talking about your quarterly earnings calls. Talk to your customers and discuss with them the current situation. Reassure them that their investments are safe (You better be telling the truth!) and explain to them how your bank is dealing with the current crisis. If you have to, go over FDIC regulations. Build confidence through open communication. And reap the benefits. Take a look at ING, see how they handle possible landmines.Stop all your Whoo Hoo and smiling faces – serious handshakes garbage advertising and invest in real conversations with your customers.

Take the concerns of your customers as serious as the demands of Wall Street.