Monday, May 24, 2010

Book Review: Busted: Life inside the Great Mortgage Meltdown

You may know business, but do you know personal finance? It's actually a whole different skill set.

So today we're going to read a book that shows you what NOT to do.

Busted: Life Inside The Great Mortgage Meltdown is a sad and in hindsight predictable tale of the consumer real estate excesses of 2000s America. The land where credit was inexhaustible and enormous home mortgages just didn't matter. In fact, critics of this debt-doesn't-matter mentality were widely derided. It goes to show you that a culture can develop temporary insanity.

This is the story of a New York Times business (!) reporter who attempted to keep up with the Joneses. He bought a house with a disastrous adjustable rate mortgage, continued to pile up huge credit card debts (with the assistance of his materialistic second wife), all while paying out punishing amounts of alimony and child support to his first wife and children.

Eventually reality came a- knockin'.

No, this is not a book with abstract theories but rather a personal history of America's experience with debt.

Read it to absorb the cultural milieu of the time and also to remind yourself that a culture can be very, very wrong.

Keep your eyes open out there!

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