Beyond the subprime bomb

Book review and interview: 'Financial Shock'

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When Mark Zandi, chief economist and co-founder of Moody’s Economy.com, decided to write a book on the implosion of the subprime mortgage industry earlier this year, the global meltdown in the financial markets and impact to the overall economy had yet to surface. Yet because the book is so comprehensive, it still provides an excellent framework from which to understand the root causes of the crisis, from the mistakes made by Alan Greenspan to the rapid rise of irresponsible lenders who rewrote the rules of underwriting based on their own short-term interests.

And let’s not forget a compliant political system and the home buyers eager to join the ranks of owners despite any potential long-term consequences of poor financial decisions.