Funflation in Sports Events

“Funflation” is a term used by economists to explain the increase in ticket prices for live events as consumers eagerly seek the experiences they missed out on during the pandemic.

Last month, the cost of attending sports events went up by 25.1% compared to October 2022, according to the Bureau of Labor Statistics' consumer price index. This increase in admission prices for sports events marked the highest annualized inflation rate among the numerous categories included in the inflation basket (CPI only showed a 3.2% annualized increase). The surge in prices is evident across the entire leisure and hospitality sector as people are returning to activities they enjoy and are willing to pay more for these experiences.

One of the possible factors contributing to higher prices for sports events is the growing use of dynamic pricing models. Such models allow ticket-selling platforms to adjust prices based on the demand for a particular event at any given moment. Ticket prices might also be influenced by notably sporting events, like the recent Formula One race in Las Vegas and the announcement of the soccer player Lionel Messi's move to the Inter Miami team, which have contributed to heightened enthusiast spending. A substantial factor behind this surge is the contrast with the unusual low prices in 2022. Sports teams had reduced ticket prices significantly to attract back fans who got used to watching games from home on a television.

The interest in attending sports games is expected to remain relatively steady even in the face of economic challenges. This is because a significant portion of the consumer base is financially well-off enough to afford professional sports tickets and is likely more resilient in economic downturns due to their financial condition. However, a substantial shift in the economy’s situation could lead fans with less financial stability might spend less on things they don't really need, possibly affecting the demand for sports tickets. Some people with money constraints might justify spending more on sports tickets this year by telling themselves they didn't treat themselves to such things during the pandemic. The financial strain also affect the resale market for tickets, as some sports fans pointed out. Additionally, the rising costs of parking and food inside the stadium add to the overall money concerns for fans.

    In the post-pandemic world, sports have gained a new meaning. With more people working from home, the desire for in-person social spaces is higher, and those with the money are more willing to spend on these experiences. The sports world creates this sense of togetherness, which is more than ever appreciated considering the loss of such experiences during Covid-19 time.

Source: https://www.cnbc.com/2023/11/21/funflation-drives-sporting-event-ticket-prices-up-a-whopping-25percent.html

Home prices are poised to drop as the frozen housing market thaws, 2 top experts say

     Recently, after a long period of high home prices and high mortgage rates, there has been a predicted shift in the housing market. It is foreseen that there could be a substantial drop in housing prices in the future spurring a reinvigoration of the housing market, which has been on the decline since the height of covid in 2020. Mark Zandi, Moody's chief economist, had stated in interviews the direction in which the housing market would need to continue to get back to relatively normal price ranges as compared to pre covid. Zandi stated "I don't expect the housing market to come roaring back here, certainly not in 2024," he said. "Probably won't be until 2025, 2026 before we see sales levels that are more consistent with what we've enjoyed historically." However, there are a few with more optimistic views on the future of the housing market.

    Redfin CEO Glenn Kelman believes that the housing market is already reigniting. Stating that the amount of housing inventory has already begun to increase. He mentioned that more homes were being listed and those not sold are being listed again at lower prices. He ends with the observation that prices that had originally frozen the housing market are now being pried open and buying and selling will continue to increase as the year progresses.

Cited Source

https://markets.businessinsider.com/news/commodities/home-prices-housing-market-forecast-zandi-kelman-mortgage-affordability-rates-2023-11

Gary Shilling's 8 best quotes from a new interview.

American financial analysis and commentator Gary Shilling, a regular figure in publications including The Wall Street JournalI, The New York Times, and Forbes recently completed an interview and the following is a series of my takeaways from Shilling's 8 quotes from the article regarding the current stock market, the possibility of a recession, and commercial real estate (CRE) bubble. Shilling was credited with correctly forecasting economic events including the housing crash in 2008. 

Quote 1) Most forecasters on Wall Street are brought in to make bullish predictions. Even if a forecaster makes a correct bearish prediction, its has a negative impact on job security.

Quote 2) Shilling has a firm opinion that stocks will decline from 30%-40%, peak to trough. Shilling's forecast indicates a 2,900 point fall for the S&P 500.

Quote 3) The Fed's credibility problem is a strong reason why they are going to kill inflation. If the Fed fails to kill inflation then their credibility will be impaired heavily. 

Quote 4) If the Fed is going to kill inflation then a recession will be the price of that decision 

Quote 5) Shilling says that there will be a recession coming in the near future. The inverted yield curve, LEI's and the Fed's battle with inflation are all points Shilling referenced for an upcoming recession.

Quote 6) It will be well into the next year before the weak economy expresses itself and inflation is cut back. 

Quote 7) Shilling references the mid-2000s housing bubble and crash and says that the major banks had to be bailed out as well as the mortgage lenders and so on. 

Quote 8) The biggest bubble right now is CRE. It is a bubble beginning to crack and many buildings have been stifled by the remote working boom. 

Article: https://markets.businessinsider.com/news/stocks/stock-market-outlook-crash-recession-commercial-real-estate-bubble-shilling-2023-11

The Haitian-Dominican Republic Water Dispute

    Two countries riddled with contentious history have developed a new feud to add to their everlasting list. Haiti and the DR share one island in the Caribbean, but that is where the sharing ends. The two countries fought in the 1800's in which the DR was able to gain independence over the French backed Haitians. Since then, the two have developed vastly different cultures, a passionate hatred for one another, and have gone completely different paths. Haiti is a nation experiencing everything that go wrong in a country including a presidential assassination in 2021, gangs overrunning the streets, and poverty sweeping the nation. The Dominican Republic on the other hand continues to be a tourist hot spot as 16% of their total GDP comes from the tourism industry. 

    Recently in September, the Dominican Republic sealed its borders and froze Haitian visas over a dispute involving the Massacre River, a river that stretches 220 miles of the countries borders. The DR claims full use of it, however the Haitian government says they also have full right of use. The two countries met for negotiations but after 11 hours, nothing was resolved. An arising issue that comes with this closure of the border is Haitians rely greatly on trade with the DR. As the DR is Haiti's third largest trading partner, Haiti's already high starvation rate could increase. 

    The conflict stems from a 1929 agreement between the countries in which they are both granted access to the water. The problem is the Haitian government has begun an excavation of the river which Dominican officials say will severely affect their countries farmers. The Massacre River is already home to 11 canals on the Dominican side, so many wonder if this response was somewhat of an overreaction. Since then, the DR has partially opened their borders but the water dispute persists. Haitians continue to worry about their current and future food supply as the lack of water greatly hinders their agricultural industry. 

https://www.nytimes.com/2023/09/14/world/americas/dominican-republic-haiti-border-water.html