What we’re reading (8/17)
“Mortgage Rates Hit 7.09%, Highest In More Than 20 Years” (Wall Street Journal). “While lots of would-be buyers are struggling to find anything they can afford, plenty of would-be sellers feel stuck in place. Many homeowners are unwilling to put their homes on the market, fearful of giving up low-rate mortgages and being forced to take out loans that are much more expensive. High-rate homeowners who bought recently and were hoping they could soon refinance are coming to grips with the fact that they’ll have to wait a while.”
“Why Wall Street Is Gung-Ho On The Housing Market” (New York Times). “‘Home buyers have demonstrated behavior that, in our view, reflects unsustainable adaptations to elevated mortgage rates,’ the Goldman Sachs strategists Roger Ashworth and Vinay Viswanathan wrote in a research note. ‘For example, the average debt-to-income ratio on conforming purchase mortgages is over 38 percent, a significant aberration from post-Global Financial Crisis averages.’ Goldman’s housing affordability index this week hit its lowest level since it was created 25 years ago, the same report notes.”
“How A Small Group Of Firms Changed The Math For Insuring Against Natural Disasters” (New York Times). “Insurance companies have pulled back from offering coverage in certain areas or cut the kinds of damage they will pay to repair. A little-noticed slice of the financial industry that provides insurance to insurers, called reinsurance, has helped drive the changes.”
“LinkedIn Is Uniquely Positioned To Benefit From Twitter’s Meltdown–And Disgruntled X Users Are Offering Microsoft A Blueprint For Social Media Supremacy” (Fortune). “By implementing timely and strategic product enhancements, LinkedIn has the potential to fulfill the lofty promises that Twitter once held, emerging as an even more captivating destination for enthusiasts of up-to-the-minute news and insights. Capitalizing on its inherently more reliable identification framework stemming from its professional affiliations, LinkedIn could seamlessly blend into both a global business-centric social graph and a comprehensive knowledge repository, enabling users to pinpoint and connect with world-renowned experts while consuming their valuable content.”
“The Economic Impact Of AI” (Marginal Revolution). “I am a believer in the power of current AI trends. But a look at the way economies work argues for more moderate (but still substantial) estimates of AI’s impact. The most likely scenario is that economic growth will rise by a noticeable but not shocking amount. Economic historians typically cite Britain’s England’s Industrial Revolution as the single most significant development ever in boosting living standards. Through the late 18th and 19th centuries, it took people from a near-subsistence existence to modern industrial society. Yet economic growth rates during the Industrial Revolution were hardly astonishing.”
