Home > Personal Finance > Europe: The Confidence Game That Could Break the Bank

Comments 0 Comments

Last month, The Consumer Confidence Index published by the Conference Board dropped to 39.8 which, but for the trough of the ’08-’09 crisis, is the lowest it has been since the index was created forty-four years ago. Another index published by the Conference Board—the index of CEO confidence—also dropped and is hovering near historic lows. Translation: Everybody’s freaked out and depressed.

Confidence—or the belief that our retirement funds will be there, that we’ll always have a job, and that the world is a safe place to live in, at least economically—is the lifeblood of the American economy. Confidence among business and political leaders, here and abroad, is the lubricant of society. When confidence dries up, credit dries up, money dries up, and commerce dries up, bringing us perilously close to the arid conditions of the Great Depression. So even though the American financial system and American (used-to-be-but-no-longer-really) too-big-to-fail banks are not significantly exposed to any potential default of a European government, the failure of the European financial system would strike a very dangerous blow to the U.S. economy. And even though most Americans have perhaps only a vague notion of what’s going on in far-away southern Europe, it really should be thought of as what’s going on next door in the global economy that exists in the 21st-century.

[Article: Tea Time for the Occupation]

In other words, just imagine an episode of the Vanilla Ice Project where Ice accidentally screws up the wiring to a house (Italy), which in turn knocks out the power to the entire block (The EU), and that somehow manages to fry the entire electrical grid of a large Florida gated community (the global economy).

Note that the above scenario is rather unlikely… Ice seems to really know his stuff.

But I digress.

Consumer spending drives the United States economy and consumer confidence drives consumer spending. We all need to be able to believe in a reasonable future, one that looks reasonably like the recent past.

And so my friends, when judging what’s going on in Europe, assessing our future prospects as individuals, or America’s future prospects as a nation, it would be wise to reflect as well upon the observation of economist Stuart Chase: “For those who believe, no proof is necessary. For those who don’t believe, no proof is possible.”

[Featured Product: Get a free trial credit score]

Pages: 1 2

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team