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.
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.Go read the whole thing - you won't be disappointed.
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.
The most memorable part to me was when he and his wife finally realized they were spending $3,000 too much money - every month!