What do you think?
Rate this book
Busted: Life Inside the Great Mortgage Meltdown
The fiasco that sank millions of Americans, including one journalist, who thought he knew better.
A veteran New York Times economics reporter, Ed Andrews was intimately aware of the dangers posed by easy mortgages from fast-buck lenders. Yet, at the promise of a second chance at love, he succumbed to the temptation of subprime lending and became part of the economic catastrophe he was covering. In surprisingly short order, he amassed a staggering amount of debt and reached the edge of bankruptcy.In Busted, Andrew bluntly recounts his misadventures in mortgages and goes one step further to describe the brokers, lenders, Wall Street players, and Washington policymakers who helped bring that money to his door. The result is a penetrating and often acerbic look at the binge and bust that nearly bankrupted the United States.Enabled by know-nothing complacency in Washington, Wall Street wizards used "collateralized debt obligations," "conduits," and other inscrutable financial "innovations" to put American home financing into hyperdrive. Millions of Americans abandoned the safety of thirty-year, fixed-rate mortgages and loaded up on debt. While regulators insisted that the markets knew best, Wall Street firms fragmented and repackaged unsound loans into securities that the rating agencies stamped with triple-A seals of approval.Andrews describes a remarkably democratic debacle that made fools out of people up and down the financial food chain. From a confessional meeting with Alan Greenspan to a trek through the McMansion bubble of the OC, he maps the arc of the Frankenstein loans that brought the American economy to the brink.With on-the-ground reporting from the frothiest quarters of the crisis, Andrews locates what is likely to be the high-water mark in America's long-term embrace of higher borrowing, higher risk-taking, and the fervent belief in the possibility of easy profits.
A veteran New York Times economics reporter, Ed Andrews was intimately aware of the dangers posed by easy mortgages from fast-buck lenders. Yet, at the promise of a second chance at love, he succumbed to the temptation of subprime lending and became part of the economic catastrophe he was covering. In surprisingly short order, he amassed a staggering amount of debt and reached the edge of bankruptcy.In Busted, Andrew bluntly recounts his misadventures in mortgages and goes one step further to describe the brokers, lenders, Wall Street players, and Washington policymakers who helped bring that money to his door. The result is a penetrating and often acerbic look at the binge and bust that nearly bankrupted the United States.Enabled by know-nothing complacency in Washington, Wall Street wizards used "collateralized debt obligations," "conduits," and other inscrutable financial "innovations" to put American home financing into hyperdrive. Millions of Americans abandoned the safety of thirty-year, fixed-rate mortgages and loaded up on debt. While regulators insisted that the markets knew best, Wall Street firms fragmented and repackaged unsound loans into securities that the rating agencies stamped with triple-A seals of approval.Andrews describes a remarkably democratic debacle that made fools out of people up and down the financial food chain. From a confessional meeting with Alan Greenspan to a trek through the McMansion bubble of the OC, he maps the arc of the Frankenstein loans that brought the American economy to the brink.With on-the-ground reporting from the frothiest quarters of the crisis, Andrews locates what is likely to be the high-water mark in America's long-term embrace of higher borrowing, higher risk-taking, and the fervent belief in the possibility of easy profits.
237 pages, Kindle Edition
First published May 7, 2009
3 people are currently reading
152 people want to read
About the author
Edmund L. Andrews
2 booksEdmund L. Andrews has been a reporter for the New York Times for the past sixteen years. He lives in Silver Spring, Maryland.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 30 of 60 reviews
February 14, 2010
Edmund Andrews is an impulsive kind of guy. He buys a house sight unseen. He proposes marriage to a woman he's never even kissed (and he may have proposed before his divorce was final, though that's unclear). He ends up with $50,000 in credit-card debt, a vastly reduced 401(k), a mortgage that he can't come close to paying, and an utterly destroyed credit rating. But he still has a really good job . . . AS A FINANCIAL REPORTER for the New York Times. I'm not kidding. He gets scolded, in person, by Alan Greenspan.
I alternated between shaking my head in despair at how irrational Andrews is and admiring him for his clear, intelligent, lively writing style. Chapter 3 is called "My Lender Drinks the Kool-Aid." He describes the global economic crisis in general as well as his situation in particular. I'm sure he got a substantial payment for this book, and he certainly deserved it.
Andrews is the first to admit that he is a privileged white guy and that others have had it much harder than he has. He also admits that he was a crummy husband--not to the first wife, who I'm sure has a thing or two to say about all this, but to the second wife, whom he quotes as saying, "You are chipping away at my soul" and "I am terrified of you." He seems to think he's a great dad to his three children and four stepchildren. I find that hard to believe, what with the divorce, the rebound marriage, the bitter fights with the second wife, the constant overtime work, and the financial meltdown. You'll be chipping in to pay for nursing-home bills, kids!
I deducted one star because this purports to be a tell-all but is really a tell-some. (More information about that is here: http://meganmcardle.theatlantic.com/a... )
I would have given the book five stars if it had included a chapter from the first wife (perhaps entitled "Yes, He Was Always Crazy") and a chapter from the second wife (she could call it "I Don't Care What The Atlantic Says, I Am Not a Money-Grubbing Harpy").
Happy Valentine's Day, everybody! Don't spend too much on those presents!!
I alternated between shaking my head in despair at how irrational Andrews is and admiring him for his clear, intelligent, lively writing style. Chapter 3 is called "My Lender Drinks the Kool-Aid." He describes the global economic crisis in general as well as his situation in particular. I'm sure he got a substantial payment for this book, and he certainly deserved it.
Andrews is the first to admit that he is a privileged white guy and that others have had it much harder than he has. He also admits that he was a crummy husband--not to the first wife, who I'm sure has a thing or two to say about all this, but to the second wife, whom he quotes as saying, "You are chipping away at my soul" and "I am terrified of you." He seems to think he's a great dad to his three children and four stepchildren. I find that hard to believe, what with the divorce, the rebound marriage, the bitter fights with the second wife, the constant overtime work, and the financial meltdown. You'll be chipping in to pay for nursing-home bills, kids!
I deducted one star because this purports to be a tell-all but is really a tell-some. (More information about that is here: http://meganmcardle.theatlantic.com/a... )
I would have given the book five stars if it had included a chapter from the first wife (perhaps entitled "Yes, He Was Always Crazy") and a chapter from the second wife (she could call it "I Don't Care What The Atlantic Says, I Am Not a Money-Grubbing Harpy").
Happy Valentine's Day, everybody! Don't spend too much on those presents!!
September 25, 2009
"Whine whine, snivel, snivel. I wanted a house I couldn't afford for my mid-life crisis new bride. I bought it anyway. Things went bad. But someone should have stopped me!"
I was looking for a tad more insight. I didn't get it. I took my life into my own hands (a recommendation for the author) and quit reading.
I was looking for a tad more insight. I didn't get it. I took my life into my own hands (a recommendation for the author) and quit reading.
August 4, 2009
Edmund Andrews is the star economics reporter for the Times, so the writing itself is competent and interesting — if it is to be evaluated on purely technical, storytelling merits. But as another reader noted, the author has been harshly criticized for sins of omission — namely, neglecting to mention his wife’s two bankruptcies. Remember, this book was billed as a tell-all memoir about his personal finances, and The New York Times threw the full weight of its marketing juggernaut behind it by making it the cover story of the Sunday Magazine.
The author has argued that his wife’s serial bankruptcies were not relevant, even though the second bankruptcy was filed almost seven years to the day of the first (you are only allowed to file for Chapter 7 bankruptcy every seven years), during their marriage, and under his guidance. Her two bankruptcies discharged hundreds of thousands of dollars. Her second bankruptcy was supposed to discharge a $30,000 loan from her sister (which her sister had to sue her for), but also included plastic surgery and Nieman Marcus bills. Oh, and the L.A. Public Library.
Andrews, on the defensive, says that it did not even occur to him to mention his wife’s bankruptcies — this seems highly unlikely coming from a journalist. He is now claiming she was a destitute, single, working mother, which the evidence also does not bear out.
Having looked at the specifics, I think it is fair to say that the bankruptcies were relevant, and furthermore, he knew it. If his wife had a problem, she deserves compassion, but if he really wanted to protect her, he should not have written the book. His foreknowledge and subsequent cover up allowed him to paint the picture he wanted his readers to see. The omission is material and discredits him.
As for his whole “I’m not claiming to be a victim” schtick, he is all over the media calling himself a victim and a poster child for the fiscal crisis. He was even quoted saying that he is tired of being blamed for the economic woes of THE ENTIRE NATION. Really? Martyr much?
His unlikability also bears itself out in the book. The personal part of the story is a good third or more of the book, so you’ll have to slog through how incredibly hot he thinks his wife is to get to the book’s more interesting features. While some of the book’s defenders have argued that it’s unfair to focus too much on the soap operatic aspects of it, it's hard not to feel slightly nauseated when Andrews boasts that he and his wife "proudly" ditched their long-time spouses and seven children to pursue their own "glorious gamble."
Read BUSTED, if you must, but please don’t fork over your hard-earned cash to subsidize this guy (who is crying poor despite having close to $200,000 in income this year, if you count the advance he got for this book). Take it out of the library. Although, hopefully, not the L.A. Public Library.
The author has argued that his wife’s serial bankruptcies were not relevant, even though the second bankruptcy was filed almost seven years to the day of the first (you are only allowed to file for Chapter 7 bankruptcy every seven years), during their marriage, and under his guidance. Her two bankruptcies discharged hundreds of thousands of dollars. Her second bankruptcy was supposed to discharge a $30,000 loan from her sister (which her sister had to sue her for), but also included plastic surgery and Nieman Marcus bills. Oh, and the L.A. Public Library.
Andrews, on the defensive, says that it did not even occur to him to mention his wife’s bankruptcies — this seems highly unlikely coming from a journalist. He is now claiming she was a destitute, single, working mother, which the evidence also does not bear out.
Having looked at the specifics, I think it is fair to say that the bankruptcies were relevant, and furthermore, he knew it. If his wife had a problem, she deserves compassion, but if he really wanted to protect her, he should not have written the book. His foreknowledge and subsequent cover up allowed him to paint the picture he wanted his readers to see. The omission is material and discredits him.
As for his whole “I’m not claiming to be a victim” schtick, he is all over the media calling himself a victim and a poster child for the fiscal crisis. He was even quoted saying that he is tired of being blamed for the economic woes of THE ENTIRE NATION. Really? Martyr much?
His unlikability also bears itself out in the book. The personal part of the story is a good third or more of the book, so you’ll have to slog through how incredibly hot he thinks his wife is to get to the book’s more interesting features. While some of the book’s defenders have argued that it’s unfair to focus too much on the soap operatic aspects of it, it's hard not to feel slightly nauseated when Andrews boasts that he and his wife "proudly" ditched their long-time spouses and seven children to pursue their own "glorious gamble."
Read BUSTED, if you must, but please don’t fork over your hard-earned cash to subsidize this guy (who is crying poor despite having close to $200,000 in income this year, if you count the advance he got for this book). Take it out of the library. Although, hopefully, not the L.A. Public Library.
August 10, 2009
this book offers a pretty straightforward, easy-to-understand explanation of the housing bubble & its subsequent collapse, which led to the current recession, through interviews with mortgage brokers, real estate agencies, banking officials, & through andrews's own personal experience siging a go-go mortgage for an unaffordable house, destroying his credit, & eventually sliding into foreclosure. i originally read the extremely foreshortened version of this book, published by the "new york times" in may. andrews's story was kind of sad, pathetic, & sympathetic, but i still walked away wondering why he made the choices he made (buying a $500,000 house on about $3000 a month in take-home pay) & why he seemed so reluctant to really ask himself hard questions about his own complicity in his financial reckoning. of course, that's easy for me to say, not being a home owner. i'm so conservative with money, i won't even have a credit card. & never have!
the book expands on his story a bit more, explaining about his second marriage & how, blinded by love, he made some unfortunate financial choices, thinking they'd work themselves out when his new wife found a well-paying job. he also goes far more into detail about the economic policies that created & sustained the housing bubble, including the role of the fed in setting interest rates, financial data that led to the fed choosing to keep interest rates so low for so long, how skyrocketing housing prices can inspire people to treat their homes like ATM machines, & the complicated manner in which banks encouraged mortgage brokers to lend more & more money to people with less & less credit & income verification. it's hard to look at all this information & blame a single source (predatory lenders, greedy banks, inattentive ratings agencies, foolish home buyers)...it seems like everyone worked together to deceive one another & assure one another that home prices would keep rising & home owners would continue to do everything within their power to make good on their loans. but with the advent of payment options ARMs, there was no way that well-intentioned home buyers could possibly make payments once their rates started rising, & when housing prices crashed, condo flippers & other unscrupulous buyers abandoned their mortgages in droves, creating a domino effect that took out all the players along the way that had purchased portions of mortgages & mortgage-backed securities. & the risis were greater than anyone could have predicted, seeing as how these mortgage options had only been invented in recent years & previous default info wasn't entirely applicable.
this definitely helped explain the mortgage crisis to me in more detail, & it was interesting to read about it through the prism of andrews's own personal experiences, but i'd like to see someone write a companion book about WHY people feel the need to "keep up with the joneses," as it were. WHY did andrews insist on buying a house he knew he couldn't afford, instead of renting a more affordable if less-homey apartment? i think there's something here about warped values--andrews admits that he & his wife looked at rental properties & rejected them because they looked like they were inhabited by college students or drug dealers. well...sure. they probably were. but when you rent the place, it will be inhabited by you, & you could use the raw material to make it into a home more suited to your own tastes. it might not be a dream home, but you can't AFFORD a dream home, so suck it up. he also explains that as the house takes its toll on his finances, everything in the house starts to fall apart--the rooms all need new paint, the dog gnaws the antique side table, the gutters are jammed with old leaves & they can't afford a cleaner. & i was like...uh...clean the gutters yourself. a gallon of paint is like $15--paint the rooms yourself. not much you can do about the table now, but no amount of money would have protected the table from the dog, so...? he acknowledges that they dropped absurd quantities of money on needless purchases, like j. crew clothes & a beach house rental. it sounds like these were people with extremely poor financial instincts & priorities. let's talk about THAT--not to blame people who are in a bad way, but to educate people so they can make smarter choices in the future.
the book expands on his story a bit more, explaining about his second marriage & how, blinded by love, he made some unfortunate financial choices, thinking they'd work themselves out when his new wife found a well-paying job. he also goes far more into detail about the economic policies that created & sustained the housing bubble, including the role of the fed in setting interest rates, financial data that led to the fed choosing to keep interest rates so low for so long, how skyrocketing housing prices can inspire people to treat their homes like ATM machines, & the complicated manner in which banks encouraged mortgage brokers to lend more & more money to people with less & less credit & income verification. it's hard to look at all this information & blame a single source (predatory lenders, greedy banks, inattentive ratings agencies, foolish home buyers)...it seems like everyone worked together to deceive one another & assure one another that home prices would keep rising & home owners would continue to do everything within their power to make good on their loans. but with the advent of payment options ARMs, there was no way that well-intentioned home buyers could possibly make payments once their rates started rising, & when housing prices crashed, condo flippers & other unscrupulous buyers abandoned their mortgages in droves, creating a domino effect that took out all the players along the way that had purchased portions of mortgages & mortgage-backed securities. & the risis were greater than anyone could have predicted, seeing as how these mortgage options had only been invented in recent years & previous default info wasn't entirely applicable.
this definitely helped explain the mortgage crisis to me in more detail, & it was interesting to read about it through the prism of andrews's own personal experiences, but i'd like to see someone write a companion book about WHY people feel the need to "keep up with the joneses," as it were. WHY did andrews insist on buying a house he knew he couldn't afford, instead of renting a more affordable if less-homey apartment? i think there's something here about warped values--andrews admits that he & his wife looked at rental properties & rejected them because they looked like they were inhabited by college students or drug dealers. well...sure. they probably were. but when you rent the place, it will be inhabited by you, & you could use the raw material to make it into a home more suited to your own tastes. it might not be a dream home, but you can't AFFORD a dream home, so suck it up. he also explains that as the house takes its toll on his finances, everything in the house starts to fall apart--the rooms all need new paint, the dog gnaws the antique side table, the gutters are jammed with old leaves & they can't afford a cleaner. & i was like...uh...clean the gutters yourself. a gallon of paint is like $15--paint the rooms yourself. not much you can do about the table now, but no amount of money would have protected the table from the dog, so...? he acknowledges that they dropped absurd quantities of money on needless purchases, like j. crew clothes & a beach house rental. it sounds like these were people with extremely poor financial instincts & priorities. let's talk about THAT--not to blame people who are in a bad way, but to educate people so they can make smarter choices in the future.
November 25, 2016
When Andrews sticks to reporting on the different angles (Greenspan/Bernake Fed, the Treasury, various government regulating agencies, various private sector agencies, the banks, etc), it is a fine introduction to the causes that led to the housing meltdown/credit market freeze of 2007and global recession of 2008; however, there are probably better books out there that can do just a fine of a job introducing a reader into those causes. It is average at best. As a reporter for the New York Times covering finance and economics, Andrews has contacts and connections to help give him access to those within the industry and in government.
When Andrews goes personal in recounting his story with his own family and their house, it is DEFINITELY EVERYTHING THAT IS NOT FINE. This guy and his wife are real pieces of work. Andrews reunites with his childhood friend/teenage crush Patty after twenty plus years and decides to divorce his wife (of 21 years) to be free to pursue Patty, a recent divorcee and homemaker of 20+ years. The way Andrews describes the ending of his marriage (yeah, ex-wife gets the shrew bitch treatment) and how he happily went to Iraq for two months to cover the war after Patty encouraged him to chase his passion, did not endear him to me. Andrews is knee deep in financial mismanagement just coming out of his divorce; between child support and alimony payments, he is paying $4,000 a month to his ex-wife while pursuing Patty who lives on the other side of the country. He is middle-aged white guy having a mid-life crisis and Patty is in need of a new sugar daddy. He and Patty decide to move in together and blend their children into a new family, complete with a home in an over heated and dangerous housing and mortgage market. Doesn't matter how little he brings home after paying his ex-wife because Patty will be the breadwinner! - except she is moving away from everything she built over the past 20 years to move across the country and has no contacts and really, no ambition to get a corporate job. She just really wants to continue being a SAHM, but Andrews is clearly depending on her to bring in six figures to help pay for all the things he wants to give their new family. So they run up credit cards, re-finance their mortgage twice during the heady days of the housing boom, run up their credit cards AGAIN, start taking out loans from their retirement accounts - just one piss poor financial decision after another. Patty is flinting from job to job, so that six figure corporate job Andrews hopes come true is a pipe dream. Their marriage is a disaster; the fights they have include him throwing objects at her, him throwing punches at the wall and in furniture (while she is standing in front of/near wall/furniture), and aggressively gas-lighting.
Needless to say, their personal life is a shit storm of epic proportions. Did I mention the fact that Andrews is a reporter for the New York Times, specializing on topics relating to economics and finance?
When I finished reading the book, I searched Andrews out on Google to find any update to this story, I find that his second wife (Patty) filed for Chapter 13 bankruptcy in 2007. So as Andrews was writing about his family's financial woes, his wife was filing bankruptcy - for the second time. Turns out Patty filled for bankruptcy the first time with her first husband; the second bankruptcy was filed as soon as the law permitted (seven years between the two bankruptcy). Neither bankruptcy was written about in the book (it came out after bloggers wrote about it as part of reviews for the book). One such blogger was Megan Mcardle at The Atlantic: http://www.theatlantic.com/business/a...
Andrews also came under fire for being a reporter for the NYT as a finance and economics journalist while having such financial difficulties - and how he was already writing the book/looking for a publisher while the housing meltdown was going on and he was reporting on it for the NYT.
1.0 star for reporting on the crisis, but I can't recommend this book due to the author's actions and misinformation.
When Andrews goes personal in recounting his story with his own family and their house, it is DEFINITELY EVERYTHING THAT IS NOT FINE. This guy and his wife are real pieces of work. Andrews reunites with his childhood friend/teenage crush Patty after twenty plus years and decides to divorce his wife (of 21 years) to be free to pursue Patty, a recent divorcee and homemaker of 20+ years. The way Andrews describes the ending of his marriage (yeah, ex-wife gets the shrew bitch treatment) and how he happily went to Iraq for two months to cover the war after Patty encouraged him to chase his passion, did not endear him to me. Andrews is knee deep in financial mismanagement just coming out of his divorce; between child support and alimony payments, he is paying $4,000 a month to his ex-wife while pursuing Patty who lives on the other side of the country. He is middle-aged white guy having a mid-life crisis and Patty is in need of a new sugar daddy. He and Patty decide to move in together and blend their children into a new family, complete with a home in an over heated and dangerous housing and mortgage market. Doesn't matter how little he brings home after paying his ex-wife because Patty will be the breadwinner! - except she is moving away from everything she built over the past 20 years to move across the country and has no contacts and really, no ambition to get a corporate job. She just really wants to continue being a SAHM, but Andrews is clearly depending on her to bring in six figures to help pay for all the things he wants to give their new family. So they run up credit cards, re-finance their mortgage twice during the heady days of the housing boom, run up their credit cards AGAIN, start taking out loans from their retirement accounts - just one piss poor financial decision after another. Patty is flinting from job to job, so that six figure corporate job Andrews hopes come true is a pipe dream. Their marriage is a disaster; the fights they have include him throwing objects at her, him throwing punches at the wall and in furniture (while she is standing in front of/near wall/furniture), and aggressively gas-lighting.
Needless to say, their personal life is a shit storm of epic proportions. Did I mention the fact that Andrews is a reporter for the New York Times, specializing on topics relating to economics and finance?
When I finished reading the book, I searched Andrews out on Google to find any update to this story, I find that his second wife (Patty) filed for Chapter 13 bankruptcy in 2007. So as Andrews was writing about his family's financial woes, his wife was filing bankruptcy - for the second time. Turns out Patty filled for bankruptcy the first time with her first husband; the second bankruptcy was filed as soon as the law permitted (seven years between the two bankruptcy). Neither bankruptcy was written about in the book (it came out after bloggers wrote about it as part of reviews for the book). One such blogger was Megan Mcardle at The Atlantic: http://www.theatlantic.com/business/a...
Andrews also came under fire for being a reporter for the NYT as a finance and economics journalist while having such financial difficulties - and how he was already writing the book/looking for a publisher while the housing meltdown was going on and he was reporting on it for the NYT.
1.0 star for reporting on the crisis, but I can't recommend this book due to the author's actions and misinformation.
November 12, 2012
This book can be summarized in two sentences. A financial journalist of some distinction tracks and explains the exotic lending practices that led to the mortgage meltdown. In parallel, he describes his infatuation with the woman who would become his second wife, their decision to buy a house together, and the subsequent downward spiral of their personal finances.
I gave this book a 3-star reading because I enjoyed reading it, and because I found myself rereading it, or selected parts of it, several times.
In the first place, the author gives a good explanation of the mortgage meltdown. I was able to understand his explanations, and that is something that I always appreciate. There are plenty of books about this subject, but they are usually so technical that I give up, feeling frustrated. The author also managed to snag interviews with Alan Greenspan and other luminaries of the financial world, so there is read-worthy material here.
And second... well, I read the author's personal financial misadventures with the type of horrified fascination people usually reserve for car wrecks. There was a bit of the "There but for the grace of God, go I" about this, and a bit of judgmental pleasure. On one hand, you root for him to make his second marriage work, and you applaud his desire for a house that can accomodate the combined kids from two marriages. You smile indulgently at his tale of middle-aged besottedness. And yet, when he walks you through the elementary school math of his household finances, your instinct is to yell: "What were you THINKING?" Basically, this couple assumed that someone who had been a full-time homemaker for two decades could just snap back into the workforce as if she'd never left and bring in a salary of about 60,000 $ a year. No amount of scrimping on food or clothes is ever going to make up that gap, and to me that was actually the primary financial lesson from the book. So yes, while predatory lending is undoubtedly a bad, bad thing, so is wishful thinking about earning power.
I can see why some reviewers were irritated by the book- the naivete displayed by someone whose entire profession revolves around understanding financial trends, was indeed astounding. His second wife does sound like a demanding princess. The revelation that she had already filed for bankrupcy once, and did it again a year or so after the events related in this book, does not create a lot of sympathy. But overall I read this as a story of human frailty. Yes, even smart people make bad decisions.
I gave this book a 3-star reading because I enjoyed reading it, and because I found myself rereading it, or selected parts of it, several times.
In the first place, the author gives a good explanation of the mortgage meltdown. I was able to understand his explanations, and that is something that I always appreciate. There are plenty of books about this subject, but they are usually so technical that I give up, feeling frustrated. The author also managed to snag interviews with Alan Greenspan and other luminaries of the financial world, so there is read-worthy material here.
And second... well, I read the author's personal financial misadventures with the type of horrified fascination people usually reserve for car wrecks. There was a bit of the "There but for the grace of God, go I" about this, and a bit of judgmental pleasure. On one hand, you root for him to make his second marriage work, and you applaud his desire for a house that can accomodate the combined kids from two marriages. You smile indulgently at his tale of middle-aged besottedness. And yet, when he walks you through the elementary school math of his household finances, your instinct is to yell: "What were you THINKING?" Basically, this couple assumed that someone who had been a full-time homemaker for two decades could just snap back into the workforce as if she'd never left and bring in a salary of about 60,000 $ a year. No amount of scrimping on food or clothes is ever going to make up that gap, and to me that was actually the primary financial lesson from the book. So yes, while predatory lending is undoubtedly a bad, bad thing, so is wishful thinking about earning power.
I can see why some reviewers were irritated by the book- the naivete displayed by someone whose entire profession revolves around understanding financial trends, was indeed astounding. His second wife does sound like a demanding princess. The revelation that she had already filed for bankrupcy once, and did it again a year or so after the events related in this book, does not create a lot of sympathy. But overall I read this as a story of human frailty. Yes, even smart people make bad decisions.
September 25, 2018
"Busted" is a tale told in two parts. The technical portion details how a subprime mortgage goes on to become part of a subprime mortgage-backed security. The personal portion of the book details how and why former New York Times economics reporter Edmund Andrews obtained, then refinanced (twice) a subprime mortgage on a piece of property in Maryland.
The technical portion is not bad, but not nearly as good as Michael Lewis' "The Big Short" in describing the inner workings of the bonds which essentially destroyed American finance in the 2000's. The meat, or carrion, of this book is the personal portion telling how and why Edmund Andrews of the New York Times came to be a subprime borrower.
This portion is entertaining and will remind many readers of a "True Confessions" magazine article. Without giving away too much of the book, Mr. Andrews manages to make most lives he touched during this period (including his own) worse. Edmund Andrews is an articulate writer with impeccable credentials, as could only be expected from a New York Times reporter. None of this seems reflected in his personal life.
Personal finance is indeed "personal." Most of the subprime borrowers of the 2000's have been portrayed as Las Vegas cocktail waitresses and Miami condo-flippers whose flips went sour. "Busted" reminds us that not all subprime borrowers fit the stereotypes. They were real people who made bad financial judgements, often due to a lack of alternatives.
Edmund Andrews also reminds us that education and verbal facility do not equal common sense. Mr. Andrews, as a Times reporter, could justifiably have been considered a "thought leader" in economics during this time period. Mr. Andrews' financial behavior during the period detailed in this book gives lie to this leadership. He knew better, but did the wrong thing anyway.
Credentials do not always equal competence. If there is a lesson in this book, perhaps this is it.
The technical portion is not bad, but not nearly as good as Michael Lewis' "The Big Short" in describing the inner workings of the bonds which essentially destroyed American finance in the 2000's. The meat, or carrion, of this book is the personal portion telling how and why Edmund Andrews of the New York Times came to be a subprime borrower.
This portion is entertaining and will remind many readers of a "True Confessions" magazine article. Without giving away too much of the book, Mr. Andrews manages to make most lives he touched during this period (including his own) worse. Edmund Andrews is an articulate writer with impeccable credentials, as could only be expected from a New York Times reporter. None of this seems reflected in his personal life.
Personal finance is indeed "personal." Most of the subprime borrowers of the 2000's have been portrayed as Las Vegas cocktail waitresses and Miami condo-flippers whose flips went sour. "Busted" reminds us that not all subprime borrowers fit the stereotypes. They were real people who made bad financial judgements, often due to a lack of alternatives.
Edmund Andrews also reminds us that education and verbal facility do not equal common sense. Mr. Andrews, as a Times reporter, could justifiably have been considered a "thought leader" in economics during this time period. Mr. Andrews' financial behavior during the period detailed in this book gives lie to this leadership. He knew better, but did the wrong thing anyway.
Credentials do not always equal competence. If there is a lesson in this book, perhaps this is it.
August 11, 2009
Because of my involvement in the real estate industry and Margaret's recommendation, I picked this up. It was a very quick and easy read, and certainly a good insight into the mortgage/subprime lending debacle. Two themes surfaced for me--Greed and Unwillingness to take responsibility. I had trouble sympathizing with the author. He got in over his head because he was unwilling to accept his financial circumstances and chose to live beyond his means. He was facilitated by greedy mortgage lending people, however he was by no means a victim of the system. The author paints a very clear picture of how the industry spiraled out of control and did provide some solid examples of predatory lending, however. I rated the book three stars (instead of 4) because I just couldn't fall for the author as a victim of the system.
May 14, 2010
Interesting. This guy is a total loon for what he did. He makes a good case of this being a dual problem -- both on the banks and on the individuals. In different ways, different blame can be placed.
That said, his bias was annoying.
That said, his bias was annoying.
July 22, 2024
A NEW YORK TIMES ECONOMICS REPORTER TELLS HIS OWN STORY, ALONG WITH THE NATION'S
New York Times reporter Edmund Andrews wrote in the Introduction to this 2009 book, "If there is anybody who should have avoided the mortgage catastrophe, it is me... 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... I am four months past due on my mortgage and bracing for foreclosure proceedings to begin... This book describes in gory detail how I got it wrong and the personal nightmare that followed, but its broader purpose is to explore how so many other people also went wrong. I know why I borrowed nearly a half-million dollars. The mystery is why so many people were so eager to lend to me..."
He advises, "Take a cue from the bank or Wall Street firm that is now trying to foreclose on your house. Don't apologize. They knew what they were doing far better than you did. They knew it was a giant Ponzi scheme... They knew, they knew, they knew. They deserve whatever losses come their way." (Pg. xv)
He notes that in 2001, "Fed officials consciously pinned their hopes for an economic recovery at least partly on the housing sector. They didn't have much choice. With technology companies decimated by the collapse of their stock prices and businesses scaling back after massive outlays for new equipment and software, business investment was utterly stagnant... Housing, it appeared, was the only game in town." (Pg. 72)
Andrews criticizes former Federal Reserve chair Alan Greenspan, who "was deafeningly silent about the burgeoning risks buiilding in the private sector subprime mortgage market... he barely gave the issue a nod in the first edition of his memoir... On what turned out to be the epic systemic threat to the nation's financial system, Greenspan did not seem to be interested." (Pg. 84)
He laments, "It was sad that it took a crisis on Wall Street to focus the White House and the Federal Reserve on the woes of the housing sector. Even Democratic leaders in Congress, who were perhaps more reflexively inclined to rescue troubled home owners, had focused on other things." (Pg. 167)
Although it is an "inside" look, Andrews' book contains many insights on the causes of the crisis, and it is a fascinating book to read.
New York Times reporter Edmund Andrews wrote in the Introduction to this 2009 book, "If there is anybody who should have avoided the mortgage catastrophe, it is me... 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... I am four months past due on my mortgage and bracing for foreclosure proceedings to begin... This book describes in gory detail how I got it wrong and the personal nightmare that followed, but its broader purpose is to explore how so many other people also went wrong. I know why I borrowed nearly a half-million dollars. The mystery is why so many people were so eager to lend to me..."
He advises, "Take a cue from the bank or Wall Street firm that is now trying to foreclose on your house. Don't apologize. They knew what they were doing far better than you did. They knew it was a giant Ponzi scheme... They knew, they knew, they knew. They deserve whatever losses come their way." (Pg. xv)
He notes that in 2001, "Fed officials consciously pinned their hopes for an economic recovery at least partly on the housing sector. They didn't have much choice. With technology companies decimated by the collapse of their stock prices and businesses scaling back after massive outlays for new equipment and software, business investment was utterly stagnant... Housing, it appeared, was the only game in town." (Pg. 72)
Andrews criticizes former Federal Reserve chair Alan Greenspan, who "was deafeningly silent about the burgeoning risks buiilding in the private sector subprime mortgage market... he barely gave the issue a nod in the first edition of his memoir... On what turned out to be the epic systemic threat to the nation's financial system, Greenspan did not seem to be interested." (Pg. 84)
He laments, "It was sad that it took a crisis on Wall Street to focus the White House and the Federal Reserve on the woes of the housing sector. Even Democratic leaders in Congress, who were perhaps more reflexively inclined to rescue troubled home owners, had focused on other things." (Pg. 167)
Although it is an "inside" look, Andrews' book contains many insights on the causes of the crisis, and it is a fascinating book to read.
May 14, 2017
This book is really 2 books. One is a detailed & very good description of what led to the 2008 Housing tsunami & the other is a pretty vague account of how the author & his wife got caught up in the tsunami. Then, come to find out that the author omitted the very pertinent fact that his wife had filed for bankruptcy TWICE before their marriage. So, I will recommend this book looking for facts pertaining to the Housing crisis, but read the author's story with a critical eye.
December 20, 2023
Overall enjoyed the read as it gave a personal perspective on the mortgage crisis, in addition to a journalist one. It felt a bit unbalanced, especially in the second half. As he dove into the financial details of the mortgage system, there were long periods without the personal story (which I was more interested in). The story of his relationship with Patty was uncomfortable at times as I'm not sure we got the full picture.
July 15, 2025
Reported on and Lived the 2008 Financial Crisis
The author not only reported on the 2008 financial crisis, but also lived through it on a slew of subprime mortgages and debt. Gripping tale of the spiraling, out of control anxiety of not being able to pay your bills while also reporting on it.
The author not only reported on the 2008 financial crisis, but also lived through it on a slew of subprime mortgages and debt. Gripping tale of the spiraling, out of control anxiety of not being able to pay your bills while also reporting on it.
December 3, 2019
Very engaging and interesting read from the New York Times Economics reporter who became a victim of the 2008 subprime lending/housing crisis.
July 13, 2021
The implosions described in this book - both on a macro level AND on a micro level - are both fascinating and horrifying.
July 13, 2021
The implosions described in this book - both on a macro level AND on a micro level - are fascinating and horrifying. Watching a train wreck in process.
September 15, 2021
I love books about crooks and loser. Here the crooks were clever white collar jolly banker folks, and the loser was a sucker white collar fella in love with a broke gal.
May 11, 2023
This is why men and journalists have terrible reputations.
July 7, 2009
This book, by a NYT journalist who both covered the housing bubble and the subprime mortgage crisis at the same time, to his chagrin, he participated in it, tells several stories and works on all levels. Let's get the personal part out of the way: Mr. Andrews made some bone-headed decisions and way over-leveraged himself. He takes himself to task and faces this head on in the book with, to my ear, minimal to no whining. His and his second wife's borrowing, pretty much just to put a (nice) roof over their and their blended families' heads - no off the charts profligate spending here - not surprisingly puts enormous strain on their marriage, and that's all painful to read. I hope the marriage makes it (still an open question). Reading this part is like watching a car wreck in slow motion - it's just awful.
That aside, the other part of the book, and where the author spends most of his time, is an historical accounting of the subprime mortgage market and the housing bubble that fed it, urged on by Wall Street as it pulled in huge profits. The author touches all the bases: The Fed (Alan Greenspan in particular), Congress, the Bush administration, red-lining and reverse red-lining, lending practices with respect to minorities and women, and, most interestingly, interviews with or lots of research about the major sub-prime lenders themselves. The book is well researched and readable - it pulls together in one place what we've been reading about over the last several years and to my mind does it quite well.
Mr. Andrews's prose suffers a bit - but not as much as you'd think - for being an up to date, hot off the presses, piece of journalism, i.e., with little time to re-write and edit, but overall this is an excellent, educational, and quick read.
So, why should we read this stuff, even if one didn't participate in recent crazy refinancing schemes or invest in residential condos in Las Vegas or Florida? Because the subprime mortgage crisis impacted virtually every single lender with whom we, as consumers and borrowers, deal every day, including freezing up lending markets and bringing real estate financing, including commercial (versus just residential) r/e lending, to a near standstill. True, there are certainly more than a few factors above and beyond the subprime lending market that have contributed to the current recession, but this is a big one, and as such it behooves us all to Find Out More About It. This book contributes to that education by putting the subprime mortgage lending pieces together in one place. Sure, you can feel superior (or not) to the author in his own personal hell, but above and beyond his grim tale, he really does have a lot to share.
POSTSCRIPT to the above posting: Turns out that the story is subject to a bit of a reporting scandal when, after the NYT Magazine piece appeared in May 2009 that offered a boiled down version of the personal part of the book, journalist Megan McArdle of "The Atlantic" reported that the author's wife previously filed for bankruptcy, once in 1998 when she was still married to her first husband, and more recently in 2007, i.e., during her marriage to the author. The author neglects to mention this fact in the book (oooops!), and it does color at least the personal part of the book, after the fact. Here's the link to McArdle's article along with several hundred comments: http://meganmcardle.theatlantic.com/a... . I still think the book is worth reading - at a minimum the reporting on the housing price bubble and the subprime mortgage market, plus the aftermath of all the bubble is worthwhile and, yes, I still hope their marriage makes it. No one deserves to fail 2x in marriage - once is hard enough.
That aside, the other part of the book, and where the author spends most of his time, is an historical accounting of the subprime mortgage market and the housing bubble that fed it, urged on by Wall Street as it pulled in huge profits. The author touches all the bases: The Fed (Alan Greenspan in particular), Congress, the Bush administration, red-lining and reverse red-lining, lending practices with respect to minorities and women, and, most interestingly, interviews with or lots of research about the major sub-prime lenders themselves. The book is well researched and readable - it pulls together in one place what we've been reading about over the last several years and to my mind does it quite well.
Mr. Andrews's prose suffers a bit - but not as much as you'd think - for being an up to date, hot off the presses, piece of journalism, i.e., with little time to re-write and edit, but overall this is an excellent, educational, and quick read.
So, why should we read this stuff, even if one didn't participate in recent crazy refinancing schemes or invest in residential condos in Las Vegas or Florida? Because the subprime mortgage crisis impacted virtually every single lender with whom we, as consumers and borrowers, deal every day, including freezing up lending markets and bringing real estate financing, including commercial (versus just residential) r/e lending, to a near standstill. True, there are certainly more than a few factors above and beyond the subprime lending market that have contributed to the current recession, but this is a big one, and as such it behooves us all to Find Out More About It. This book contributes to that education by putting the subprime mortgage lending pieces together in one place. Sure, you can feel superior (or not) to the author in his own personal hell, but above and beyond his grim tale, he really does have a lot to share.
POSTSCRIPT to the above posting: Turns out that the story is subject to a bit of a reporting scandal when, after the NYT Magazine piece appeared in May 2009 that offered a boiled down version of the personal part of the book, journalist Megan McArdle of "The Atlantic" reported that the author's wife previously filed for bankruptcy, once in 1998 when she was still married to her first husband, and more recently in 2007, i.e., during her marriage to the author. The author neglects to mention this fact in the book (oooops!), and it does color at least the personal part of the book, after the fact. Here's the link to McArdle's article along with several hundred comments: http://meganmcardle.theatlantic.com/a... . I still think the book is worth reading - at a minimum the reporting on the housing price bubble and the subprime mortgage market, plus the aftermath of all the bubble is worthwhile and, yes, I still hope their marriage makes it. No one deserves to fail 2x in marriage - once is hard enough.
February 23, 2017
Too light of a book for my taste. This book about the real state boom is not much more than a narrative.
July 31, 2011
This book provides an interesting take on the real estate bubble, because the author himself had a subprime mortgage while simultaneously covering the financial news for the NYT. So he covers both angles: the personal side of having such a mortgage, as well as the "professional" side of what caused the real estate run-up and collapse.
On the personal side, the author is painfully honest as his marriage to the woman of his dreams strains under the weight of the debt on his over-priced suburban home. In fact, it's a lesson study on finances and marriage.
Unfortunately, the author fails to man-up and take responsibility for his financial mistakes, and does the same in his analysis of what caused the bubble and bust. For example, he reviews Greenspan's fatal decision to keep interest rates artificially low, but then denigrates Greenspan's faith in the free market. He apparently misses the contradiction of calling something "free market" when central planners such as Greenspan and Bernanke set interest rates.
Additionally, he claims that Fannie and Freddie had nothing to do with the bust, but ignores the fact that both required huge bailouts. Towards the end of the book, he tries to build a case that subprime lenders were rascist, and misses no chance to blame the Bush administration. I wonder what he thinks now that Obama has been in charge for 2 years and nothing has improved? Especially since the book ends with a quote from one of Obama's melodramatic speeches.
So in the end, this books provides a lot of detail about what happened and what kind of people took out subprime mortgages, but it totally fails to diagnose the true causes or steps to take to prevent this in the future. Precisely what I've come to expect out of reporters - good description, highly suspect analysis and conclusion. Look elsewhere if that is what you are seeking.
On the personal side, the author is painfully honest as his marriage to the woman of his dreams strains under the weight of the debt on his over-priced suburban home. In fact, it's a lesson study on finances and marriage.
Unfortunately, the author fails to man-up and take responsibility for his financial mistakes, and does the same in his analysis of what caused the bubble and bust. For example, he reviews Greenspan's fatal decision to keep interest rates artificially low, but then denigrates Greenspan's faith in the free market. He apparently misses the contradiction of calling something "free market" when central planners such as Greenspan and Bernanke set interest rates.
Additionally, he claims that Fannie and Freddie had nothing to do with the bust, but ignores the fact that both required huge bailouts. Towards the end of the book, he tries to build a case that subprime lenders were rascist, and misses no chance to blame the Bush administration. I wonder what he thinks now that Obama has been in charge for 2 years and nothing has improved? Especially since the book ends with a quote from one of Obama's melodramatic speeches.
So in the end, this books provides a lot of detail about what happened and what kind of people took out subprime mortgages, but it totally fails to diagnose the true causes or steps to take to prevent this in the future. Precisely what I've come to expect out of reporters - good description, highly suspect analysis and conclusion. Look elsewhere if that is what you are seeking.
August 6, 2009
I had read the excerpt in The New York Times Sunday Magazine last month, and found the topic fascinating: an economics reporter for the NYT ends up in a sub-prime mortgage and is probably going to lose his house (and marriage). I found the memoir parts more interesting than the strictly economics parts (and I do know from economics). I learned more in the chapters that told anecdotes about people who'd been defrauded, who were fighting back, etc., then in the sections about Greenspan, Bernecke et al. I wish there's been more of that. I understand that Economics is Mr. Andrews beat, and also in the acknowledgement that he turned the manuscript in late, but I think his editor should have helped redirect him a bit to the more interesting, less dry aspects. I also wish the ending said if he'd lost his house, gotten divorced. I understand the book came out prior to those issues being resolved, but it shouldn't have. Timeliness or no, you need to have an actual ending (I do hope they add a chapter to the paperback). I'm not sure if I hope he and Patty stay together or not. They only seem well-suited on the surface, but when the going gets tough, they turn on each other. As a conscientious, responsible budgeter, I am much more sympathetic to them getting themselves into this financial mess, than the marriage mess. They both knew there were financial issues from day one, and their minister pointed it out to them very clearly prior to the wedding, but they seem to have made a concerted effort to not deal with those potential conflicts (and the minister shouldn't have married them with such differences and no plan to ever deal with them at all.) I had thought I'd be less sympathetic about the mortgage, but that's not how it turned out. It was a good, fast read.
October 15, 2009
I would've given this one star if it had just been Andrews's personal story, but I did enjoy the history and perspective on the mortgage meltdown. His own story, though, just grated. Yes, we should have had better safeguards and policies in place so that the banking industry had not gone wild, but really, he is completely candid about the fact that he made over $100K and bought a house that was twice what he could afford. Apparently his premise is that "even an economics writer for the NY Times could get had by all these big bad banks" when in reality, he chose to get in over his head. He does little justice to those that really did get had by banks and lending institutions when he freely admits that he wanted a home he knew he couldn't afford. It would be better if it were a cautionary tale, and yet, he seems to lay blame anywhere but on his own (proverbial) doorstep.
I think that I will read Sowell's The Housing Boom and Bust to get another perspective on this mortgage meltdown. This American Life also has had two really great programs on the crisis. Important stuff, but this book I wouldn't recommend.
I think that I will read Sowell's The Housing Boom and Bust to get another perspective on this mortgage meltdown. This American Life also has had two really great programs on the crisis. Important stuff, but this book I wouldn't recommend.
December 3, 2014
New York Times financial reporter Edmund Andrews covers the sad and confusing story of an average American who was taken in by the mortgage industry and s in danger of losing his home - himself. Despite his close and continual study of the American Economy, Andrews found himself drawn into the shady world of ARM loans, flubbed financial forms and an overpriced "dream" house. Newly married with children and step-children, Andrews dreamed of providing his new family a lovely home. However, the real estate boom was at its maddest. Partnered with a wily and unscrupulous realtor, Andrews signs up for a mortgage that bore no relation to his income. Not surprisingly, rates change, his wife's employment situation changes and bills come flooding in. In a moment of frustration, Andrews confesses his sins to the Great Man himself, Allan Greenspan, during an interview. Greenspan is horrified. Apparently, he had never actually met anyone losing their house to the mortgage scandal. A realistic, clear-headed and sadly common story of how even the smartest and savviest can be taken in.
July 13, 2009
Edmund Andrews, the economics reporter for the New York Times offers a salutary lesson in how and why ordinary people all over America got so caught up in the real-estate bubble that they never stopped to think about how they were literally mortgaging their future. Andrews details how easy it was for him to get an enormous loan - far larger than he could ever hope to pay back - for a house that he didn't really need but wanted because he was caught up in a fever of love for his new wife, Patti. Busted is a fascinating read, but apparently, Andrews failed to disclose that Patti filed for the second of her two bankruptcies during the time-period he chronicles in Busted and frankly, even from her description in the book, she sounds less "ordinary person" and more entitled spendthrift (she can't seem to give up her J. Crew clothes or her expensive cheeses) and Andrews sounds like a besotted schmoe who ignored his own misgivings until it was too late.
August 12, 2009
What's not here is a lot more intriguing than what is. How did the book contract buoy the author's finances when he wasn't able to cover his ludicrous mortgage? How on earth did he and his wife (and ex-wife and maybe kids' grandparents?) cover college tuition? I know there are even more details that have come out in other articles I haven't read yet, but those were pretty obvious from the text itself. I'd recommend just reading the piece Andrews wrote for The New York Times magazine, excerpted and slightly modified from bits of this book. But I already understood ARMs and credit default swaps as much as anyone seems to, so I didn't need the factual rather than personal information in the book. Others might be more interested.
July 24, 2009
Very interesting book that delves into the reasons for the recent/current financial meltdown. The author chronicles his plunge into debt as a result of buying a house he couldn't afford and other financial mistakes made as a result of a divorce and second marriage. He's very frank about the mistakes he made and the effects they had on his and his families’ life. He also explores the financial industries actions that helped create the problem. An excellent book for anyone who wants to know more about the burst of the housing bubble and how it spiraled into a crippling financial crisis for individuals, businesses, our country.
January 31, 2016
Kind of old news, again. Andrews is an economics writer for the NYT. That doesn't stop him from buying too much house and becoming a poster child for the mortgage meltdown. If you managed to not participate personally in the meltdown and don't really know the players, this is a good way to find out, as Andrews gives us the background on many of the key players from Greenspan to his own mortgage broker to his financially irresponsible wife (with some big details left out.)
You'll finish the book more informed about the era and pretty irritated with Andrews, because, of all people, it should not have happened to him.
You'll finish the book more informed about the era and pretty irritated with Andrews, because, of all people, it should not have happened to him.
July 3, 2009
This book was very fascinating! It weaved through the personal financial crisis of the author and the national housing crisis. It was very interesting to read about the origins of subprime and other bad loans. Really, who was to blame? It's hard to say. The book got a little boring at times when the author delved into the technical terms of finances and the economy. Overall, an easy and informative read.
August 10, 2009
Not a bad book but could have been better. It is amazing though that everything that happened to this guy and the economy is guess who's fault-Come on now he works for the New York Times-Yes George W Bush. Like I said not a bad book, but could have been much much better and with a little more depth without the political BS. Wish he would have gone more into what kind of problems this caused in his personal life.
Displaying 1 - 30 of 60 reviews