The Big Short

One of the contributing factors leading to the recession we are now climbing out of was the collapse of the real estate market. The Big Short by Michael Lewis, currently on many best seller lists, was recently read to get a better understanding.

This book gave an in-depth look at the complex world of mortgage bonds, credit default swaps and collateralized debt obligations. Let me give you the bottom line: our problem was caused by irresponsible lending, Wall Street greed and lack of governmental oversight. We sincerely hope that the new regulations now being put in place will prevent a repeat of this economic failure.

Is homeownership still a good idea? Owning a home has long enjoyed private and governmental support for some good reasons. Studies have shown that families who own their home are more stable and produce better citizens in the community. Despite the recent setback, real estate has been one of the best generators of wealth we have ever known. We can rest assured that once the foreclosures and short sales are flushed from our system, we will resume the normally positive conditions for a healthy real estate market.

If you have read The Big Short, please drop Bill an email with your thoughts.