As Floridians emerge from their battered, roofless and plywood-covered homes, it’s already clear that survivors are looking at more than $100 billion of damage caused by Hurricane Milton, following just weeks after Hurricane Helene hit the same part of Florida, then swerved upcountry into North Carolina, Kentucky and Tennessee. Helene alone caused damage of $30.5 billion to $47.5 billion to residential and properties, and as much as $30 billion was not insured, the real estate data company CoreLogic said, just before Milton hit.
The big question now is: How much money will Floridians get to rebuild, and who’s gonna pay? Commercial insurers have been pulling out of Florida for years, and huge payouts this time around mean it will be a lot more expensive to insure a home or business going forward. The federal government’s National Flood Insurance Program is nearly spent out, but it’s an insurer of last resort and won’t cover all the damage.
Building new homes is also in trouble. If developers can’t get insurance, banks won’t lend to them. And homeowners may also be up the creek. Fewer banks want to give 30-year mortgages on homes that may be literally underwater in a few decades (or sooner). Florida has its own state-run insurance company that would help the most uninsured get some coverage, but that’s rarely enough to rebuild.
Businesses are also in trouble. Many small businesses don’t have sufficient continuity insurance, and they rely on the federal government’s Small Business Administration. But the SBA is also nearly out of cash: It has less than $100 million available for new loans, and the Republican-led House of Representatives has no plans to reconvene until after next month’s elections, so the SBA won’t be getting any cash soon.
Compounding the problem is Florida’s commitment under Governor Ron DeSantis, a Republican, to small government and low taxes, so the state has not got the cash to bail out its residents and the businesses that keep their communities going.
Florida is already feeling some of those effects: In Tampa, it’s getting harder to unload homes, and median time on market has risen to 35 days, up 16 from a year ago, and that will only get worse in the aftermath of Helene and Milton. When you can sell a home, it’s not worth much more than you paid for it, a shock in a state where the median home price doubled from 2017 to 2024.
Get Big Business This Week in your inbox every week—and read it before everybody else! Sign up today.
The Usual Suspects
- TikTok Dough: TikTok, the mesmerizing Chinese-owned social media platform, knowingly contributed to a mental health crisis among U.S. teens just so it could make more money, according to a lawsuit against TikTok filed by 13 state attorneys general and the District of Columbia. “They chose addiction and more use and more eyeballs and more mental and physical harm for our young people in order to get profits — it’s really that simple,” California AG Rob Bonta told The New York Times. TikTok is already facing a federal lawsuit for targeting children, and President Biden signed a law in April that calls for TikTok to be banned in the U.S. if it isn’t sold by January.
- Trump Doubles Down on Deficits: A new analysis by the nonpartisan Committee for a Responsible Federal Budget says neither Trump nor Harris has an economic plan that would cut the national debt or annual federal budget deficits, but Trump’s plan would blow a hole in the deficit twice as big as Harris’s. The mid-level estimates for Harris’ plan would add $3.5 trillion to the national debt through 2035, while Trump’s would add a whopping $7.5 trillion.
- McBeef With Big Beef: McDonald’s has filed a lawsuit against the largest beef-packing companies, Cargill, JBS, and Tyson Foods, alleging the meat processors have “engaged in a contract, combination or conspiracy” to cut output over the past decade in order to drive up prices. Together, the three control close to 80% of the U.S. market, and the Department of Justice and the Department of Agriculture have both been investigating price-fixing in the meat market.
- Disney’s Pricier Princesses: The Walt Disney Co. is raising prices at its signature California theme park, Disneyland, with tickets set to rise by $7 to $12 a day. (Prices at Orlando’s Disney World rose earlier this year.) The hikes come as Disney’s costs are rising, in part from a new three-year contract with California workers, setting a base pay of $24 an hour, as well as plans to invest $60 billion into these parks and cruise ships.
- Cold Comfort: JetBlue, the budget airline that hasn’t turned a profit in five years, is pulling back hot meals for its long-haul flights, after trying cold food on its transatlantic trips to Dublin and Edinburgh. JetBlue is also adding surge pricing to checked baggage.
- Thank Heaven for 47: Canadian convenience store owner Alimentation Couche-Tard, has upped its hostile bid for Seven & i, the Japanese owner of 7-Eleven, by 22%, now offering a startling $47 billion. Seven & i says it doesn’t want to sell, and the Japanese government has classified the company as core to Japan’s national security. America may run on Dunkin’, but Japan clearly runs on onigiri and egg-salad sandwiches.
Elon’s World
SpaceX, which owns the StarLink satellite communication system, and also launches other firms’ rockets into space, has used its position to push a hard bargain with rival satellite operators, asking them to share their rights to portions of the airwaves with Starlink in order to get their satellites launched, The Wall Street Journal reports. • Free Starlink? Not so fast. That’s what Musk said he offered residents of communities devastated by Hurricane Helene, where cell service and internet had been knocked out. Tech news site The Register dug a little deeper. As it turns out, after that free month of service, you’re automatically enrolled as a paying customer at $120 a month. And you need to buy a $400 dish. But as one local told the site, “if UPS can drive a truck to your house [to deliver the dish], you’re not in that bad shape.” • Russia-funded propaganda firm Tenet Media, which pushed right-wing conspiracies and anti-Ukraine stories, was able to spread its message so well largely because its false narratives were amplified by Musk, according to testimony before a Canadian parliament committee investigating Russian disinformation campaigns. • Republicans on the House Oversight Committee are investigating the FCC’s 2022 decision not to award Starlink a $900 million contract to provide broadband internet to rural areas. Musk called the decision illegal, but the feds said Starlink’s internet speeds were too slow. • Just days before Tesla planned to unveil the new Robo-Taxi, four top officials have left the company: the CIO, the public policy chief, the Model X program manager, and the head of vehicle programs. • After his cringe-inducing “Bouncy Clown” appearance at Trump’s weekend rally in Butler, Pennsylvania, Musk is now offering Trump supporters $47 for each voter they refer to his America PAC. The purpose, Max Burns writes in The Hill, is to get personal information on swing state voters and target them with pro-Trump disinformation. • Musk’s super-PAC is funneling millions of dollars to support Republican House candidates in close races across the country. Axios did the math, and as of October 4, the PAC has spent $8 million across 18 Congressional districts and Musk has spent another $55 million to support Trump. • “If he loses, I’m f***ed,” Musk told Tucker Carlson. “How long do you think my prison sentence is going to be? Will I see my children? I don’t know.” • OpenAI has asked a California court to dismiss a lawsuit Musk brought against it for allegedly straying from its nonprofit purpose. Now OpenAI, which said it intends to become a public, for-profit company, says Musk is just using the courts to harass OpenAI while his own xAI catches up.
The Short Stack
- Bot Problems: East and Gulf Coast dockworkers have called off their strike and walked away with a 62% pay raise over the next six years. A decent agreement, especially given the surging profits of the dock and shipping industries. But they remain at loggerheads with owners over port automation. Robotic cranes and AI-powered trucks could make most of the manual labor redundant, and the dockers fear they’ll lose their jobs. Shippers say automation means fewer days in port, faster shipments, and lower costs. As union leader Harold Daggett said in a recent interview, “What good is it if you’re going to put people out of work?”
- Nobel Warning: Geoff Hinton shared the Nobel Prize in physics this week, and he has a warning about his work. Hinton, considered one of the fathers of artificial intelligence, quit Google last year partly so he could speak out about the potential monster he helped to create. He has warned that AI systems could escape human control and influence elections or start wars. “I think we’re at a kind of bifurcation point in history where, in the next few years, we need to figure out if there’s a way to deal with that threat,” Hinton said after receiving the prize.
- No Kidding: The Lady Gaga–Joaquin Phoenix musical dramedy Joker: Folie à Deux fell short of diminished box office expectations on its opening weekend, hitting $40 million worldwide on a production budget near $200 million. The sequel was billed as “a deeper dive into mental illness,” but somehow that didn’t resonate with U.S. audiences. Maybe the joke’s on us.
- China Syndrome: Like many foreign manufacturers before it, General Motors is finding it’s losing its competitive advantage in China, as the success of local carmakers and a broad shift to electric vehicles pushed the Detroit giant to its first loss in years. GM says it bought some of its rival’s top products and is reverse engineering them. CEO Mary Barra says GM will stick it out. For now.
Busting the Google Trust
Merrick Garland’s Justice Department is tightening the screws on Google. After winning their case in a California federal court charging that Google had built an illegal monopoly in internet search, government attorneys told judge Amit Mehta they are considering forcing Google to sell or spin off parts of its business, including the Chrome browser and the Android operating system. Other solutions the government is considering include barring Google from collecting sensitive user data, requiring it to make search results and indexes available to rivals, letting websites opt out of their content being used to train AI products and making Google report to a court-appointed technical committee.
“The DOJ has reverse-engineered Google’s formula for success and is intent on dismantling it,” Gil Luria, managing director and senior software analyst at D.A. Davidson, told Reuters.
The AI-themed sanctions could hurt Google as it trails new AI rivals like OpenAI and Perplexity. Google’s share of the search market is projected to fall from 90% to below 50% by 2025. Opening up Google’s search box would help other search engines, including Bing, Yahoo and DuckDuckGo, and would cut deeply into Google parent Alphabet’s revenue.
There’s no indication yet of how far judge Mehta will let the trustbusters go to break Google’s monopoly, and any decision could still be appealed, meaning it could take years before something happens. But so far the market seems unshaken, with Google shares down about 1.53% after the DOJ filing. Shares are still up 18% this year, as of Thursday morning.
Meanwhile, another federal judge in California ruled that Google must allow app developers to bring their own app stores to Android in the next three years. The case is a major setback for Google, forcing it to yield control of another key building block of its ecosystem, and it’s a major victory for Epic Games, which brought the suit. Currently developers must pay Google 15% to 30% of the money they receive for selling Android apps through Google’s app store.
Boeing Offer Doesn’t Fly
Talks have broken down between Boeing and the union representing some 33,000 aircraft workers, whose monthlong strike has virtually shut the company. The union says Boeing’s not taking them seriously, and that wage hikes don’t do enough to offset the high cost of living in the Seattle area. Boeing was offering a 30% raise over four years, which it said would boost average annual pay for machinists to $111,155 at the end of the four-year contract.
While airplane production is halted, the two sides are locked in a blamefest: “The union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business,” Boeing said in a statement. “Given that position, further negotiations do not make sense at this point and our offer has been withdrawn.”
The union said it had surveyed its members and the offer just wasn’t good enough. “The company wasn’t willing to move in our direction,” the International Association of Machinists and Aerospace Workers District 751 said in a message to members. The union also wants Boeing to bring back the pensions it ditched in favor of 401(k)s.
Meanwhile, Boeing is bleeding cash. The company lost more than $8 billion in cash in the first half of the year, and S&P estimates the strike is costing Boeing $1 billion a month. S&P says it could downgrade Boeing’s credit rating to junk. That’s why the planemaker is considering issuing new stock worth $10 billion or more.
Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
