“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed, in view of the silliness of the majority of mankind, a wide-spread belief is more likely to be foolish than sensible” – Bertrand Russell

A few savvy investors - most with little relative experience in real estate, derivatives or mortgage investing - anticipated a historic housing and financial collapse. Their remarkable success begs an obvious question: why did this unlikely group predict the crumbling of the housing market and the resulting pain felt around the globe, even as the experts were stunned by the developments?

Top regulators, including Alan Greenspan, Ben Bernanke, Henry Paulson and Timothy Geithner, were caught flat-footed. Senior bankers like Robert Rubin, Charles Prince, Stanley O’Neal, Richard Fuld and James Cayne oversaw firms that lost hundreds of billions of dollars from mortgage holdings. Top analysts, traders, economists and academics expected housing to hold up. Real-estate, mortgage and derivative investors all missed the huge trade, as did so-called short sellers, investors who go to sleep at night dreaming of calamities they can bet against.

Some blame the difficult period on over-compensated bankers and the toxic products they created; others point the finger at cynical traders who rolled the dice with their firms’ money. The explanations are simplistic and overstated. Certainly, some Wall Street pros had concerns about housing and nonetheless peddled unsafe products, hoping to squeeze out one last, hefty bonus. Others embraced risky trades without worrying about the potential downside. But many more were shocked by the turn of events and squandered enormous wealth when sub-prime mortgages collapsed.

Why did the experts get it so wrong? And what can we learn from the episode?

The answers are varied.....

Niall Ferguson, a canny chronicler of financial history, knows a thing or two about market timing.

Sellers have sliced more than $10 trillion off global stock- market value this month, the U.S. is mired in its worst housing crisis since the Great Depression, and hedgehog Andrew Lahde has shut his fund, telling investors, ``Goodbye and good luck.''

So what does Ferguson do? He publishes ``The Ascent of Money,'' an upbeat account of finance from Mesopotamia to McMansion. His thesis: ``Money is the root of most progress.''

After that windup, you might expect me to trash his book. Alas, I can't.

Ferguson, a Scotsman who teaches at Harvard, is the bestselling author of books including ``The House of Rothschild'' and ``The War of the World.'' His new work, like the last three, was conceived as a TV series as well as book. His reputation is riding so high that someone would short him if he were a stock, as Adam Smith biographer James Buchan recently wrote.

``The ascent of money has been essential to the ascent of man,'' Ferguson writes. ``Far from being the work of mere leeches intent on sucking the life's blood out of indebted families,'' he says, ``financial innovation has been an indispensable factor in man's advance from wretched subsistence to the giddy heights of material prosperity that so many people know today.''

Ferguson mercifully lifts the reader above today's doom and gloom with this smart reminder of how mankind has benefited from the rise of bankers, credit and markets. The book works as either a primer or a refresher course, though a serious student of financial history may learn little from these pages.....