Friday, November 06, 2009

Interesting Book of the Day

Just finished reading The Housing Boom and Bust
by Thomas Sowell.

There's also a new updated editioncoming out shortly.

The short and concise(192 pages) book is very well written and it cogently and succinctly without wasting any words explains the cause of the housing boom and bust and the aftermath. Sowell points out the various persons and entities at fault: Democrats, Republicans, President Bush, Sen. Chris Dodd, Rep. Barney Frank, Fannie Mae and Freddie Mac, Wall Street banks, and the failure of the rating agencies to properly rate the secuties that were formed from packages of risky subprime loans.

He excoriates the politicians like Dodd and Frank whose policies on pushing risky lending standards and blocked regulation of two of their largest donors - Frannie Mae and Freddie Mac helped cause the crisis -- and who then turned around and blame the free market and a lack of regulation for the crisis.

He also analyzes the failed responses to the bust and how the political unpredictability is causing yet more harm to occur.

In short, Mr. Sowell describes a perfect storm of meddling politicians, risk-taking bankers and irresponsible borrowers that caused shockwaves and consequences that have not yet ended. Reading the book is like watching a train wreck in slow motion as it is carefully described.

Well worth a read, and you'll not look at the housing crisis the same way afterwards.

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