Weekly Wrap: As goes housing, goes the economy? + #longreads
Cardiff Garcia from FT Alphaville and Bloomberg’s Nela Richardson join Lizzie O’Leary to look back at the week’s business news and forward at where the economy is going.
Housing prices have picked back up and the stock market is as strong as ever, but long-term unemployment, worsening income inequality and stagnant wages still affect the rest of the country. Will that continue?
“If you’re a prospective home-buyer, it’s not great news because prices are higher. On the other hand, if you’re already a home-owner, and for instance, you’re an underwater home owner, it’s good news, it means you have a little bit more wealth,” Garcia says. “I think it’s more important to follow actual housing construction activity, which remains kind of mixed and uncertain because thats much more important for the broader economy.”
“No one is buying houses anymore,” Richardson says. “If you look at purchase applications, it’s been flat for several years. All this bump up on price is based on very few transactions. And remember when the builders looked at prices five years ago, that’s what fed the housing boom. They were responding to prices and not actual demand.”
Weekend longreads:
Nela suggests:
Forget Bitcoin, the new virtual currency that has everyone talking is no match for the historical significance of gold bullion, one of the world richest industries. Matthew Hart delves into the secretive trading world of gold, that spans both time and continents.
Stephen Faris reports on how Poland became one of Europe’s most resilient and dynamic economies. Faris writes “with more than 200 years of tragic history, suddenly finds itself in a position of envy.”
The Economist discusses how the nuclear deal with Iran could lead to a sea change in West’s relationship with the Middle East.
Cardiff picks:
A universal basic income is not such a silly idea, according to economist Tim Harford.
A simple explanation of how money moves around the banking system
A fascinating profile of the 16th-century family that invented the forceps
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