Research

Could it have happened to you? - June 12, 2009


If you’ve heard about the New York Times story, you already know the topline: one of the Times’ own economics reporters reveals how he wound up defaulting on mortgage debt that was unaffordable based on his income, but nonetheless readily available to him. In the process, he exposes how it could happen to anyone — even a journalist whose job is to understand and explain economic news.

The upshot of Edmund Andrews’ personal finance memoir? Human nature can overwhelm rationality — even when the human involved has the benefit of regular access to all the financial information needed to prevent such a disaster (and, indeed, even regular access to the world’s financial luminaries and key regulatory authorities). The details bring the story to fascinating life — and illuminate how little tiny temptations and steps in the wrong direction can lead even a well-informed financial writer down the path towards personal finance disaster.

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