Market Shocks and Market Power: What to Watch Now

The economy moves fast. Most people feel it, but don’t fully understand it.

Decode Econ breaks down what’s happening and how it impacts your financial life, career, and opportunities.

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In today’s newsletter:

1. Spirit Airlines

2. Foreclosures are up

3. AI data and your emails at work

4. WNBA a monopsony in action

5. History was made at the Kentucky Derby

6. Dr. A’s Take on Markets

Could a Merger with JetBlue Have Saved Spirit Airlines?

Thousands of panicked travelers were left scrambling over the weekend after Spirit Airlines’ sudden but expected collapse. The budget carrier ceased all operations on Saturday after growing financial struggles, resulting in the loss of 17,000 jobs. Rival airlines like Frontier and Southwest jumped in to assist affected travelers. Meanwhile, aviation experts weigh the long-term impacts of Spirit’s absence: its closure may lead to higher fees.

Republicans blame the Biden administration's block on the JetBlue deal; Democrats point to the fuel price surge amid the Iran war.

Here is a more economically focused evaluation of the Spirit Airlines issue from our friends at Monday Morning Economist

The Last Flight of Spirit Airlines

What it means for you: Expect fewer ultra-low fares and less price competition. Budget travel may get more expensive, especially on routes Spirit dominates.

A New Revenue Source for Troubled Startups

Is your startup going under? You can recover some of your losses by selling your employees’ communication. Startups are selling old Slack chats and emails to AI companies to serve as training data.

But here’s the catch: employees did not consent to their messages being used as training data. This raises ethical issues and may include data with sensitive, strategic, or personal information.

Just because there is a market, it doesn’t mean there is consent, ethics, or long-term value.

What it means for you: Your workplace communication may have long-term value beyond your job. Be more intentional about what you write and where it lives.

Foreclosure Filings Hit Their Highest Level Since 2020

Foreclosure filings have surged to the highest level since early 2020, fueled by rising insurance costs, property taxes, the end of COVID-era relief programs, and inflation. The Wall Street Journal reports that nearly 119,000 properties faced foreclosure in the first quarter. That is a 26% year-over-year increase.

Homeowners are experiencing “payment shocks” from taxes, insurance, and job struggles, says Marina Walsh, an economist at the Mortgage Bankers Association. The surge comes amid other financial pressures, including rising credit card delinquency rates and increasing inflation.

Top 5 states by foreclosure filings per housing unit

1. Indiana

2. South Carolina

3. Florida

4. Delware

5. Indiana

What it means for you: Financial pressure is building beneath the surface. Watch rising costs like insurance, taxes, and debt, not just mortgage rates. As costs rise, less money is left over for your home.

Use Econ For Good

This is old news in some circles, but we hadn’t reported on it.

Nobel Prize-winning economist Claudia Goldin helped WNBA players secure a 400% raise. Harvard’s Claudia Goldin spent her career studying the gender pay gap. She used what she learned to help WNBA players reduce the pay gap.

According to the WNBA’s own press release, the new deal is expected to change salaries as follows:

Maximum-contract players will earn a salary of $1.4 million in 2026 that is expected to grow to more than $2.4 million by 2032, based on current financial projections. The league’s average salary is expected to be $583,000 in 2026 and increase to over $1 million by 2032. Minimum salaries will range from $270,000 to $300,000 in 2026 (based on years of service) and will range from $340,000 to $380,000 by 2032.

The agreement also establishes a new rookie contract scale that significantly increases salaries for top draft picks, including the No. 1 overall pick in 2026 projected to earn $500,000.

The WNBA operates in a constrained labor market with monopsonistic characteristics, where limited domestic opportunities increase the importance of collective bargaining in wage determination. Having a Nobel Prize-winning economist argue for increased wages helps you make the case.

What it means for you: Wages aren’t just about performance; they’re about bargaining power. This shows why leverage, not just skill, shapes income.

Best Two Minutes in Sports

Speaking of Women! Cherie DeVaux became the first female trainer to win the Kentucky Derby.

It was a fun race, probably one of the best Kentucky Derby races. Golden Tempo came from last place to win. José Ortiz and Irad Ortiz Jr finished first and second, respectively. This is the first time in the race's 152-year history that siblings have taken the top two spots.

What it means for you: Barriers are breaking in traditionally closed industries. Progress like this expands opportunities, even in places slow to change.

Last week, while talking with William Muck on WCPT 820, I said that the markets were more optimistic than expected. They did not reflect the true cost of the Iran war on economic outcomes. Stock market indices and oil prices had brushed off the geopolitical risk. On Monday, that changed. Oil futures spiked, and markets showed signs of a pullback as tensions in the Strait of Hormuz escalated.

What is means for you: Brace yourself, higher energy costs can show up quickly. Gas prices, travel, and, eventually, broader inflation will begin to show the impacts of this war on your pocketbook.