The 2023 NBA All-Star Weekend could boost Utah’s economy by $250M+

 Salt Lake City is hosting NBA all-star weekend for the first time since 1993. This is made possible because of the $125 million renovation initiated by the Jazz president in 2017. 

Last year, the NBA all-star weekend was hosted in Cleveland, producing a direct net economic benefit to the city of a stunning $141 million, part of $248.9 million in total economic impact.

Typically the price for a city hosting an event like this is paid entirely by taxpayers, however, the Jazz decided to put up the initial cost with the help of a "collection of 12 prominent businesses." Taxpayers' estimated support comes to $4.5 million: $3 million from the state via the Utah Sports Commission, $1 million from Salt Lake City, and the balance kicked in by Salt Lake County. This money will mostly be spent on the NBA's expectations for free facilities, safety, and security, traffic control, marketing, programming, etc.  It is estimated the total cost of hosting the event is around 10 million dollars. 

Although this seems like a large amount for the city, the Jazz, and other businesses to contribute for a 3-day event, it is expected to positively impact the city's economy, bring exposure to businesses, the  community, and "portray the host city’s team, lifestyle and culture"

Article: https://www.utahbusiness.com/nba-economics-sports-marketing/#:~:text=Based%20on%20this%20assessment%2C%20the,officer%20of%20the%20Utah%20Jazz. 

Google CEO Sundar Pichai Takes Voluntary Pay Cut

    Google CEO Sundar Pichai announced that he will take a pay cut this year, joining other high-profile CEOs such as Jamie Dimon of JPMorgan and Tim Cook of Apple who have also reduced their compensation. Pitchai also added that other top level executives would experience a reduction in compensation. This decision was made after Alphabet announced it would layoff 12,000 workers. Similar to other big tech companies, Google is being heavily criticized for these layoffs, and decisions made post-pandemic. Some argue Google was too aggressive with hiring post-pandemic. For context, Google grew its workforce by 57%. Additionally, Google is being criticized for making speculative investments into projects that weren’t producing money (i.e. self-driving technology). Pichai still hasn’t announced how large his, or other executives' pay cuts would be.

Article: https://finance.yahoo.com/news/google-ceo-sundar-pichai-says-180507576.html

Luxury London Real Estate Draws Most Mideast Buyers in Four Years

During the first half of 2020, the peak of the Pandemic, London’s top zip codes put a set of strict social restrictions in place to limit the spread of the virus; therefore, this number was only at 2.2%. But, London has always been an attractive region for wealthy buyers to invest in long-term. Foreign dealmakers alone accounted for 57% of London real estate investments last year. However, with property valuations being uncertain and interest rates continuously rising, this number has gone down since 2015, when they accounted for 65%. 

Now, during the second half of 2022, Middle Eastern buyers alone of prime real estate in the central London area accounted for 11% of property transactions in some of London’s most prestigious zip codes. With minimized covid restrictions and the recently weak GBR Pound, these buyers put themselves in second, behind only investors from all over the UK and Europe. 

https://gulfnews.com/business/property/luxury-london-real-estate-draws-most-mideast-buyers-in-4-years-1.93444188

 

Ascension of the Taliban to Power Spells Disaster for Afghanistan's Economy

The Taliban reclaimed power in Afghanistan on August 15, 2021, after a U.S. pullout. At this point, the country was reeling from COVID-19, decreasing humanitarian aid, and capital flight, among others. In a short period of time, the Taliban regime lost 40% of its GDP to losses in civilian and security aid. It also faced steep economic sanctions, like freezes on foreign exchange reserves. Together, these factors crippled the Afghan economy and forced the country into an ever-worsening humanitarian crisis.

Interestingly, in the immediate aftermath, the economy stabilized, job loss decreased, and wages stopped decreasing. However, the macroeconomy still took a huge blow. While the economic free fall stopped, the Afghan economy shrunk by 20-30% between August 2021 and August 2022. Furthermore, as high as 70% of Afghans are still unable to afford basic necessities like food and water.

The Taliban seem to be the key variable here, but why? Interestingly, the regime is responsible for prudent monetary policy, weeding out of corruption, and maintenance of friendly relations with the private sector. However, the regime has also mismanaged the macroeconomy by keeping women out of the workforce, allocating high amounts of funds to security, and attempting to control the foreign exchange market. This, coupled with Afghanistan's two decades of dependence on humanitarian aid, makes for a poor economic outlook.

The Taliban's ascension to power is marred by economic mismanagement, which is a leading cause of the current humanitarian crisis. Because of the regime's failures, Afghans still depend heavily on foreign aid, and the country's GDP remains low. In order to remedy the situation, Afghanistan will have to become more economically independent while also improving output, but the choice is up to Taliban leadership.

https://www.usip.org/publications/2022/08/one-year-later-taliban-unable-reverse-afghanistans-economic-decline

Tech Layoffs Continue as the Economy Tightens and Interest Rates Rise

     As the economy tightens and the Fed prepares to raise interest rates to combat the impending recession, many big tech companies are laying off parts of their workforce. These companies, such as Alphabet (Google's parent company), Microsoft, Amazon, and Goldman Sachs, are laying off their workers as their profits decrease and their valuations in the market decrease rapidly. One big example is Carvana, who was worth 80 billion 18 months ago. They are now only worth 1.5 billion, a 98% drop. They have laid off a significant amount of workers as they braced for their large drop.

    This tech falloff is caused by high valuations over the previous 10-15 years, and investors pumping money into these companies as they've experienced rapid growth. However, as money gets "more expensive" from these rising interest rates, this will decrease spending by both company and investor, which in turn will decrease profits and tank stock prices. Money is no longer "free" like it has been for many years.

    As of now, there seems to be no let up to these decreasing stock prices and layoffs as these companies try to brace for what's to come. 

https://www.nytimes.com/2023/01/23/technology/tech-interest-rates-layoffs.html