Real Estate & Investing

This is a plain-English explanation of how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The -creative- financing of home mortgages and the even more -creative- marketing of financial securities based on American mortgages to countries around the world, are part of the story of how a financial house of cards was built up-and then suddenly collapsed.

The politics behind all this is another story full of strange twists. No punches are pulled when discussing politicians of either party, the financial dangers they created, or the distractions they created later to escape their own responsibility for what happened when the financial house of cards in the financial markets collapsed. What to do, now that we are in the midst of an economic disaster, is yet another story-one whose ending we do not yet know, but one whose outlines and implications are explored to reveal some surprising and sobering lessons.

About the Author

“His short, snappy and surprisingly far-reaching book on the subprime crisis is as interesting and indispensable as you would expect.” –Clive Cook, Financial Times, September 8th, 2008

“In the aftermath, Shiller’s recommendation to policy-makers is “Mend it, Don’t End It.” –Kevin G. Hall, The Modesto Bee, August 22nd, 2008

“Is this a wise bail-out? The best statement I have read on this question comes from Professor Robert Shiller of Yale University in his fascinating new book on the housing bubble.” –Martin Wolf, Financial Times, September 9th 2008

“Robert Shiller is financial forecasting’s dean of doom. But he has ideas for fixing markets too.” –Justin Fox, Time Magazine, September 15th, 2008

“Robert Shiller is someone who should be taken seriously.” –Andrew Leonard, Slate.com

“What sets Shiller apart–brilliantly apart–from other analysts of the housing bubble are the sharpness of his diagnoses and the creativity of his solutions. These are the core of his excellent new book, The Subprime Solution: How Today’s Global Financial Crisis Happened and What to Do About It.” –Arvind Subramanian, Forbes.com, September 15th 2008

“Why listen to Shiller at all? He remains a rare breed — an academic who has transformed economic theory into useful real world solutions. As a renowned professor of economics at Yale University, he remains the expert on U.S. housing markets.” –John Fout, The Street.com, August 20th, 2008

From Publishers Weekly
As I write in February 2009, I am four months past due on my mortgage and bracing for foreclosure proceedings to begin. Thus begins this cautionary and critical examination of the housing crisis, a story that turned personal when New York Times economics reporter Andrews got caught up in the housing bubble after falling in love with a woman and a house. Bringing in $120,000 a year in salary—most of which went to child support and alimony to his ex-wife, Andrews says he was able to get a don’t ask, don’t tell mortgage with the assumption that his new wife, Patty, would be able to get a job to keep them afloat, an expectation that didn’t work out as planned. Because of his economics journalism background, Andrews says he should have avoided the mortgage catastrophe, and he castigates himself as well as fellow borrowers, the financial industry that took advantage of them and a government that didn’t put the brakes on the crisis that many economists warned about but that Alan Greenspan, the Bush administration and others ignored. This deeply personal exposé is timely and sobering in its candor. (June)
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A fascinating meditation on the experience of the crisis from the point of view of those facing foreclosure. (David Warsh – Economic Principals )

Andrews uses his travails as a prism for viewing the forces behind the bubble. . . . Step by step, he investigates the institutions that gave him the rope with which to hang himself.
(James Pressley – Bloomberg )

Andrews’s autopsy on his mortgage and the conditions that helped produce it is sharp and at times mordantly funny. (Tom Vanderbilt – The New York Times Book Review )

Provides important information on the recent mortgage debacle and the hazards of consumer debt. A must-read… (Mary Whaley – Booklist )