Wikinvest Wire

His personal credit crisis

Friday, May 15, 2009

If you haven't already read this you should - the personal account of New York Times economics reporter Edmund L. Andrews' descent into subprime hell.
IMAGE Of course, he has a new book about to be released "Busted: Life Inside the Great Mortgage Meltdown” from which the following was extracted, so things may soon turn up.

Either way, it's a fascinating account of how easy it used to be to live beyond your means.

If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the paper’s chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke, at close range. I wrote several early-warning articles in 2004 about the spike in go-go mortgages. Before that, I had a hand in covering the Asian financial crisis of 1997, the Russia meltdown in 1998 and the dot-com collapse in 2000. I know a lot about the curveballs that the economy can throw at us.

But in 2004, I joined millions of otherwise-sane Americans in what we now know was a catastrophic binge on overpriced real estate and reckless mortgages. Nobody duped or hypnotized me. Like so many others — borrowers, lenders and the Wall Street dealmakers behind them — I just thought I could beat the odds. We all had our reasons. The brokers and dealmakers were scoring huge commissions. Ordinary homebuyers were stretching to get into first houses, or bigger houses, or better neighborhoods. Some were greedy, some were desperate and some were deceived.
Go read the whole thing - you won't be disappointed.

The most memorable part to me was when he and his wife finally realized they were spending $3,000 too much money - every month!

8 comments:

albrt said...

Oh my god, I can't believe this poor man's daughter is being forced to sleep on a dog!

Please, somebody send that fellow a bailout check.

I hope the publisher didn't give him too much of an advance or we're liable to end up bailing out the publisher as well.

Bruno T said...

I read it and thanks, it was interesting and almost entertaining.

I'd point out that this guy (and his wife have character issues, not just money ones. It costs almost nothing to trim the shrubs, mow the lawn, fertilize the lawn yourself, touch up the paint, fix things around the house, etc. And these people spend it up on fashionable luxury items even though they know they are broke. The guy acts like not eating a $7 lunch every day is some sort of heroic sacrifice. Ever hear of a brown bag, guy? He'd save $100/month right there.

And I can't recall if he mentioned it, but if the pictured home is his, he was a fool to buy instead of rent anyway. It's an ugly dump even if you maintained it. $470K (or whatever it was) for that?

dearieme said...

Years ago a friend was complaining about feeling pinched. I suggested that he bring his own lunch to work. "Oh I couldn't possibly put my wife to all that trouble."

Anonymous said...

Anyone in foreclosure go to consumerwarningsnetwork.com (I think it's plural but may be singular without s) There is a form you can print out and present that asks for the deed to your house..These mortgages have been bundled up and sold off so many times, they can't find them. At worst it will stall them. Judges are finding in favor of homeowners. If nothing else, squat in your home. By this fall we will have gone off the dollar and no one will owe anything. Please tell the writer of the article. Also people don't realize how this can happen to anyone easily...we went through a landslide area due to the corruption in the forest industry and then a crooked lawyer bought my husband's plant and sold it off for electricity leaving 800 families without jobs or benefits. My dental care is killing us.

Lynette said...

Why do I get the feeling this mope is going to end up spending the remainder of his income for alimony on what's going to be ex-wife #2?

Lynette said...

Anonymous said:
people don't realize how this can happen to anyone easilyOn the contrary, we do realize how easy was for them to spend their way into parasitism. I imagine it's also easy for them to schlep around and try to blame loan officers, the banks, the housing market, and the overall positions of the planets in the night sky for it.

We know what's easy, but it's not that hard for the vast majority of people to live within their means, either.

We're talking about a pair of deadbeats here. They know what they did wrong and they continue to persist in the very behavior that ran them into debt.

These are able-bodied, halfway intelligent people. A good way to break their loser pattern would be to get house (or apartment -god forbid) they can afford and start paying their way in life. Instead, they squat in a house they have no right to be in. These two are horrible role models for their kids.

Anonymous said...

Read Megan McArdle's investigation posted to The Atlantic's site today. He left out two very important and glaring facts in the article and in his book. Those two facts? Bankruptcies. For God's sake.

http://meganmcardle.theatlantic.com/archives/2009/05/the_road_to_bankruptcy.php

Anonymous said...

Some critical information was left out, as revealed here:

http://meganmcardle.theatlantic.com/archives/2009/05/the_road_to_bankruptcy.php

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