Behind the Housing Crash

Confessions from an Insider

A Review

This book should be all over the place. Aaron Clarey should be doing interviews on Bill O’Reilly and CNBC. If there’s justice in this world, Aaron Clarey will find himself sipping some tropical fruit drink on a sandy beach in Hawaii, living off the dividends to well timed investments made possible through his bestseller booksales.

This book is the greatest triumph of a trillion dollar “I Told You So.” Some of us, in our day to day lives, will successfully predict some mundane event. A friend keeps dating the wrong girl and getting his heart broken, a Democrat proposes to raise taxes, Spike Lee produces another movie no one watches.

Few of us will ever get the honor of seeing an entire industry fail simply because they didn’t take our advice. Aaron Clarey, for the rest of his life, will be able to say “I was there when banks were about to crash, and I warned them.”

As an analyst for several banks and credit unions in the Twins Cities leading up to the housing bubble, Clarey was the one who would run the numbers on housing loan proposals. It was here Clarey learned of and warned about the coming housing crash, much to the chagrin of his superiors.

In his book, Clarey creates a narrative of his career in the banking industry as he moves from job to job in search of common sense. Idiot managers, thoughtless MBAs, creepy developers, greedy bankers, fraudulent brokers, all get in his way. In the end, Clarey shows how the fundamentals of banking were ignored at every level throughout the entire economy and how taxpayers ended up footing a $1 trillion bill.

The book is filled with graphs and charts showing exactly how the bubble was formed and how it burst. At times the book reads quickly as a novel, an entertaining one. At other times, it reads like an econ textbook and some might find it a bit dry. Luckily, the dry parts account for only about 10% of the book.

Something else the reader should understand, the book was self published. The typography is not professionally done nor did Clarey receive the benefit of having three or four editors to make changes to improve readability. Readers shouldn’t let any of these aesthetic issues fool them, this is a great book.

If you really want to know what happened in those banks across America which lead to a trillion dollars of inflation and tax increases and which is leading the greatest country in the world on the road towards a recession, you need to read this book.