Book review: Busted

Entwines an account of the 2004-2007 US housing bubble with a brutally uncomfortable story about reporter's deteriorating finances; David Denby did something similar for the 2001 stock bubble in American Sucker. Andrews, an economics reporter for the New York Times, was newly-married in 2004 -- a year or two before the peak of the bubble -- and bought a house in the Washington area. The resulting mortgage payment equalled his take-home net income after taxes and alimony. The financial aspects therefore relied on his new wife, who had been a homemaker in her previous marriage, finding a job. This took longer than expected and, even once she'd found a position, their lifestyle cost $3,000 more per month than their total income. I was astonished at this; they're clearly not unintelligent people, but they either couldn't add up numbers, or just tried to avoid thinking about their problems.

The coverage of the mortgage bubble itself is good, covering all the expected territory of subprime vs. alt-A vs. option ARM mortgages, securitization, insuring counterparties, bond rating agencies, and FNM/FHA. But since I've been reading blogs about this since 2005, there wasn't much new to me; it's a perfectly fine journalistic account of what happened to the US economy, but I wish it had focused on their personal experiences.