The credit crisis and housing crunch are hurting the rich, reports The New York Times.

The affluent who took out massive mortgages and geared themselves up to lifestyles they could not otherwise afford have been caught off guard by the collapse in housing prices and are finding that they are paying massive amounts while the value of their assets shrinks. Clearly, they didn't know what their risks were. But a lot of it is greed too as they dived into the market when real estate prices were soaring through the roof.

I recently wrote a piece about a similar situation in Australia. The difference is that in Australia, interest rates have been going up. But the effect is the same, particularly for those who had refinanced their mortgages. Their plan was to take advantage of rising property prices. As a result, they taken on more debt to buy goods such as a boat, overseas trips and home theatre systems. Now they have been caught by surprise.

Once again, it's a story about people being blinded by short-term greed. And the results for many have been disastrous.