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Supreme Court takes case on content policing: Here's how it could impact social media

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(WASHINGTON) -- The Supreme Court agreed this week to hear a challenge to a fundamental legal protection enjoyed by social media platforms like Facebook, Twitter and Tik Tok. The ruling could dramatically change how those platforms operate, even affecting search engines like Google, legal experts told ABC News.

The case concerns Section 230 of the 1996 Communications Decency Act, which protects social media platforms and other sites from legal liability that could result from content posted by users.

The law has drawn criticism from elected officials across the political spectrum. In a rare point of agreement, President Joe Biden and former President Donald Trump have both called for the repeal of Section 230 -- but for different reasons.

Typically, Democrats argue that Section 230 allows platforms to evade accountability for permitting harmful or misleading content, claiming the rule lets platforms off the hook for policing too little speech.

While Republicans take issue with what they consider big tech censorship, saying the legal protection allows the platforms to police too much speech without facing consequences.

Some big tech companies, like Facebook and Google, have supported reform of Section 230 that would raise the standard that platforms would need to meet in order to qualify for immunity. But the companies largely support preserving the law in some form to protect them from legal liability tied to user-generated content.

The case, Gonzalez v. Google LLC, concerns a lawsuit brought by the family of Nohemi Gonzalez, an American woman who was killed in an ISIS terrorist attack in Paris in 2015. The lawsuit against Google, the parent company of YouTube, alleges that YouTube recommended ISIS recruitment videos to users.

The case centers on whether Section 230 protects online platforms from legal liability when it comes to their recommended content.

If the high court rules in favor of Google, it would formally extend legal immunity to the algorithms at the heart of many social media products and search engines; but if the Supreme Court rules in favor of the plaintiff, the decision could expose the platforms to a raft of new legal vulnerabilities and produce major changes, legal experts told ABC News.

"The Supreme Court could make Section 230 a little more speech friendly or it could functionally eliminate it as a defense for services, which would radically reshape the internet," Eric Goldman, a Santa Clara University law professor who studies Section 230, told ABC News.

"The Supreme Court really does have the future of the internet in its hands," he added.

Google has called on lower court judges to dismiss the case, saying its operations are protected under Section 230. In a response to the Supreme Court petition, Google noted that YouTube's user rules prohibit material that promotes terrorism and that the platform employs moderators to review content around the clock. There is no evidence that any of the Paris attackers received recommendations for ISIS videos from YouTube, Google said in the brief.

Here are two major ways that social media platforms and other sites could change as a result of this case, according to experts:

Altered recommendation algorithms

The online tool at the heart of the case is the recommendation algorithm. Importantly, such algorithms are used not only by social media platforms like Facebook and Twitter but also video sites like YouTube and search engines like Google, Goldman said.

A high court decision that eliminates legal protection for recommended content could significantly alter the type of posts that appear before users on Facebook's News Feed or Twitter's timeline, said Eugene Volokh, a professor of law at the University of California, Los Angeles.

"Sites would be a lot more cautious about those types of recommendations," Volokh told ABC News. "Whenever they see something that might be potentially dangerous for them, they'll exclude it from recommendations."

Posts that could concern social media sites after the ruling include libelous comments and instructions for committing criminal acts, not just the terrorist propaganda at issue in the Supreme Court case, he said.

For example, consider a post featuring a news story critical of the Church of Scientology, Volokh said. If the Church of Scientology writes a letter to a social media site warning that the news story is libelous, the site may stop recommending posts with the story out of caution, he added.

"The platforms might decide to recommend cat videos instead," Volokh said.

While such decisions could provide an advantage for well-off or litigious actors, the moves could also benefit the public interest, he added.

"What if the story about Scientology really is libelous? It's possible," he said.

Online platforms may respond to the court's decision by shifting their recommendation algorithms in a different direction, however, instead ceding greater control to users as a way to lessen their own liability, said Adam Candeub, a professor at the University of Michigan School of Law.

"If users could say that they're making a conscious effort to seek out messages rather than Facebook forcing them onto you," he told ABC News. "Facebook isn't a speaker."

More professionally-generated content

A more risk-averse recommendation algorithm, for fear of legal liability, could lead to the recommendation of a larger proportion of professionally-made content, some experts said.

"If a company is deciding what to include in its news feed or a recommendations feed, then including a traditional mainstream news article is a pretty safe bet," said Volokh, of UCLA.

Goldman, of Santa Clara University, agreed. Twitter, he said, could prevent all users without blue verification checks from posting on the platform or prevent their posts from appearing on the timeline.

"It's inevitable that services will move away from user-generated content and toward a model like Netflix," he said. "It'll be professionally produced, it won't have the diversity it has, it won't give speech platforms to as many people and to compensate professional producers, it's more likely to be paywalled."

Other experts contested the extent to which such a shift would take effect. User-generated content will still make its way into the recommendation algorithm and go viral, Volokh said. After a court decision that limits Section 230, however, that content will more likely be innocuous than controversial.

"People haven't stopped selling cars just because they face liability for legal defects on cars," Volokh said. "They may buy insurance for facing risks to liability or may adjust to it being the cost of doing business."

Candeub, of the University of Michigan, said the court ruling wouldn't affect the experience on social media for a typical user.

"I don't think it would change much, actually," he said. "Platforms already have tremendous ability to control how content is promoted. They will have to make wiser decisions and be held accountable for those decisions."

One solution, Volokh said, would allow the social media platforms to preserve products centered on recommendations while policing them tightly: More employees.

"They may need to hire a lot more people," he said.

Copyright © 2022, ABC Audio. All rights reserved.

How inflation hits women harder at home and at the grocery store

Noel Hendrickson/Getty Images

(NEW YORK) -- On a sunny August day, Rachel Dos played with her kids at a park in Livonia, Michigan. As they played, Dos chatted with other moms about growing her own vegetables to save money on groceries and seeking out wholesale butchers to buy meat.

"I'm trying to cut those costs and save that extra money, because every little bit counts with its inflation going on," she told ABC News.

Pushing her daughter on the swings nearby, Noelle Wylin shared her own recent cost-savings tactics.

Wylin said she started making granola and jam at home when prices shot up. She talked about all the hours she spent researching how to refurbish old furniture instead of buying new pieces for her daughter's bedroom.

She added that she felt it was unfair that so much more time and effort on managing the family budget was landing on her and other women.

"I think whenever something happens with the economy and things aren't as optimistic, and [things become] more expensive, a lot of the burden gets shifted onto the mom," Wylin said.

"If I were to buy granola that used to be $3, but now is $7, I have a choice to make. Do I cut it out? And then my daughter's exposed to less food groups," she said.

"Do I take on that labor?" she continued. "Home-make the granola, look up the recipes -- figure out, should I do hemp parts in there or chia seeds or flax seeds? What's gonna give her the Omega-3s? … As a woman, it feels like, you know, all the thrifty things that you can do to make the budget work, it gets shifted onto me."

The additional hours spent at home trying to save money has made Wylin rethink her part-time work situation. At what point, she wondered, is the answer taking on more hours?

Research has long shown that inflation hits women harder, as women are more likely to have accumulated less wealth and earn wages that do not keep pace with inflation.

From groceries to clothing, women today also do the lion's share of shopping for the home in married, heterosexual couples. The result, experts say, is that women are often the first in the household to see price changes for everyday items and experience the sticker-shock and worry that comes with those changes.

"COVID really showed us what we know intimately, that even when women work full-time, they are still shouldering the bulk of unpaid labor at home," Brigid Schulte, director of the Better Life Lab at New America, a public policy think tank, told ABC News over the phone.

Schulte pointed to research -- such as this study from researchers at the University of California, Berkley and Boston College, published in the journal PNAS in May 2021 -- that shows that women who do the family grocery shopping tend to be the more pessimistic about the economy and future inflation.

According to Pew Research, which cited data from the U.S. Bureau of Labor Statistics, from 2014-2016, more than 80% of married women in households with kids said they did most of the grocery shopping and meal prep at home.

Kimberly Palmer, a personal finance expert at NerdWallet and author of Smart Mom, Rich Mom, said that, not only are women the first to see food prices go up, but they tend to take on additional, unpaid labor as a result.

"All of that labor -- and it is labor -- of saving money falls largely on women," she told ABC News over the phone.

She said that, right now, amid record inflation, she sees women looking up recipes, forgoing pre-packed snacks, and spending hours on sites hunting for used clothing and toys for kids.

"People are coming together more, so nothing goes to waste, but that takes so much effort and time and largely it is [on] women," she continued.

As for cost-saving tips, Palmer agreed it is a tradeoff between investing time and saving money. She recommended planning out meals ahead to save money while grocery shopping, downloading apps that search for coupons and having staples on hand like frozen fish and tomato sauce to help avoid last minute takeout orders.

Schulte argued women should also strive for more equity at home, noting that she had seen in her work how resentment, often over labor at home, can lead to break-ups and how important it is for couples to learn how to talk.

"We can take a page here from same sex couples. They can't fall back on traditional gender roles. You have to develop standards both can agree to," she said.

As for the workplace, she said women should continue to fight for better wages and family-friendly policies like paid time-off. But she said the stress women are feeling at home right now "begs a much larger conversation about public policy" around child care, health care and workplace conditions.

Copyright © 2022, ABC Audio. All rights reserved.

Elon Musk set to purchase Twitter after reversing course

Michael Gonzalez/Getty Images) SpaceX And T-Mobile Hold Joint Event In Texas

(NEW YORK) -- Tesla CEO Elon Musk proposed the completion of a deal to acquire Twitter on Tuesday, reversing a monthslong effort to terminate the agreement.

Musk — the richest person in the world, according to Forbes — put forward a proposal to Twitter that would complete the deal at Musk's original offer price of $54.20 a share at a total cost of roughly $44 billion, a person familiar with the proposal told ABC News.

In a statement, Twitter said it plans to agree to a deal at the price proposed by Musk.

"We received the letter from the Musk parties which they have filed with the SEC," the company said on Tuesday. "The intention of the Company is to close the transaction at $54.20 per share."

Twitter filed a lawsuit against Musk in July over his effort to terminate an acquisition agreement. That trial is set to begin in less than two weeks.

Musk reached an acquisition deal with Twitter in April, but over the ensuing weeks, he raised concerns over spam accounts on the platform, claiming Twitter had not provided him with an accurate estimate of their number.

Twitter rebuked that claim, saying it had provided Musk with information in accordance with conditions set out in the acquisition deal.

"This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. the Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another," Dan Ives, a managing director of equity research at Wedbush, an investment firm, told ABC News Tuesday in an email.

The move from Musk marks the latest reversal of course in a saga that started in January when the billionaire first invested in Twitter. By March, Musk had become the largest stakeholder in Twitter and the following month the social media company announced that Musk would join its board. Days later, however, Musk said he had decided against joining the board.

In April, Musk offered to buy Twitter at $54.20 per share, valuing the company at about $44 billion. The offer amounted to a 38% premium above where the price stood a day before Musk's investment in Twitter became public. Roughly 10 days later, Twitter accepted Musk's offer.

One month later, however, Musk said he had put the deal "temporarily on hold," citing concern over what he said was the prevalence of bot and spam accounts on the platform. Roughly two hours later, Musk said he was "still committed" to the deal.

Eventually, Musk moved to terminate the deal in July. Soon after, Twitter sued Musk in Chancery Court in Delaware to force him to complete the deal.

A scheduling decision made by the court in July -- to hold the trial over five days in October -- appeared to align more closely with a timeline requested by Twitter, which had sought a four-day trial in September. Musk asked the court to set a trial date no earlier than mid-February 2023.

Now, according to the deal, the court case is off if the two sides reach a deal.

Twitter stock closed Tuesday at $52.01, up 22% for the day.

Copyright © 2022, ABC Audio. All rights reserved.

What is 'recession fatigue' and how to combat it


(NEW YORK) -- Nearly a third of Americans say they’re not prepared for a recession and they aren’t taking action to get their finances ready for one, according to a recent Bankrate poll.

Experts are calling it “recession fatigue” and it might be why younger generations in particular are failing to take active steps to weather an economic downturn.

“Recession depression, recession fatigue — whatever you want to call it, the hits to Americans’ financial security keep on coming, first with the devastating coronavirus pandemic, followed by 40-year-high inflation and now the growing risk of another downturn,” said Bankrate.com analyst Sarah Foster. “Sustaining motivation for two-plus years to prepare for tough economic times can no doubt feel exhausting.”

Bankrate’s poll found 40% of Gen Z (ages 18-25) say they aren’t prepared for a recession and aren't taking any steps to get their finances in order. That compares with 31% of unprepared millennials (ages 26-41), 30% of Gen X (ages 42-57) and 27% of baby boomers (ages 58-76).

Gen Zers also say the pandemic interrupted their formative years and feel slighted that major life events, like proms and high school and college graduations, had to be canceled.

“Recession fatigue is the awkward cousin of revenge spending,” Foster said. “Americans were deprived of so many activities that brought them joy. It’s kind of like financial apathy.”

Experts say some Americans may not be preparing for a recession because they simply don’t know how. Many have never experienced an environment of high inflation and rising interest rates. For many Gen Zers, the closest they’ve come to a severe economic downturn is seeing how the Great Recession of 2007-2009 affected their parents.

Federal Reserve Chairman Jerome Powell recently warned that the central bank's aggressive interest rate hikes to combat stubbornly high inflation may cause "some pain," including a rise in the unemployment rate.

A growing number of Americans now believe the Fed will not be able to achieve a “soft landing,” or bringing prices under control without tipping the economy into recession. According to a recent survey from MassMutual, 49% of respondents said they think there will likely be a recession next year. Experts seem to agree. A survey from the audit, tax and advisory firm Grant Thornton finds 72% of CFOs think the Fed’s rate hikes will spark a recession.

While the best time to prepare for a recession is often before it even begins, it’s never too late to get your financial house in order.

Start by identifying unnecessary spending and decide where you can cut back. Consider cutting subscriptions for monthly magazines or streaming services, eat out less or stop ordering food delivery.

Put the money you’re saving into an emergency fund. As a general rule of thumb, try to have at least three to six months of expenses set aside in case of a job loss or unexpected medical expense.

Once you have your emergency fund, prioritize paying down your debt, especially balances on high interest credit cards.

The Fed’s rate hikes are pushing the cost of unpaid balances even higher. Over the past six months, the average annual percentage rate on a credit card has jumped from 16.17% to 16.65%, closing in on a record high of 17.14% in 2019, according to the Fed.

If you’re carrying balances on multiple credit cards and you have good credit, consider consolidating them into a 0% interest rate transfer card or consider taking out a lower interest personal loan to pay off your higher interest credit card debt.

Finally, find a side hustle you enjoy. That doesn’t necessarily mean taking on a second job. It could mean turning your hobby, like jewelry making or photography, into an extra revenue maker.

Copyright © 2022, ABC Audio. All rights reserved.

McDonald's leans into value, added promotions amid inflation, adds new 'adult happy meal'

ABC News

(NEW YORK) -- As American families face mounting food prices amid rising inflation, fast food companies like McDonald's are looking for more ways to add value.

"The impact of inflation is really challenging; there's not a sector that's really immune to the challenges," McDonald's Chief Marketing and Customer Experience Officer Tariq Hassan said in an exclusive interview with ABC News on Tuesday.

"Our fans have been really clear to us that that value that they've come to expect from McDonald's has never frankly been more important to them," he continued. "We're committed to continuing to have that ability to provide our customers those kind of offers, whether it's through our everyday value meal or unique offers we're making through national or local promotions or exclusive offers through the app."

When asked if the company has plans to further reduce prices to help customers struggling with high food costs, Hassan reiterated that they are "making sure those value offers are still on the menu."

He also explained that McDonald's looks to add value beyond just monetary savings deals.

"You connect through great unique experiences -- and we've been doing that whether through unique merchandise offers -- we did a program in July where we gave fans exclusive access to concerts through the app," he said, adding that their latest offer ties in culture, art and nostalgia.

McDonald's has raised prices in several countries due to increasing costs of goods and global supply chain issues, but when asked if U.S. customers can expect to see similar increases, Hassan said, "We try to monitor when we do those things in a way that they're not hitting the customer too hard, but the reality is we continue to provide our customers with great value -- making sure we have offers available."

The newest offer from the Golden Arches is a Cactus Plant Flea Market Box, which Hassan said was inspired by the "universal familiar experience that we all had as children" when you got a Happy Meal.

"We thought it'd be a great way to capture that joy and wrap it up in a great experience for adults," he said of the collaboration with CPFM, which created the design of the box and the McDonaldland or Cactus Buddy figurines.

"You go through that same kid-like experience. You get to choose a Big Mac or 10-piece McNugget with world-famous fries and a drink," Hassan said of the new meal deal.

The limited time boxes hit restaurants nationwide on Oct. 3 and are available while supplies last.

Plus, fans who buy the box on the McDonald’s app will automatically be entered for a chance to score exclusive merchandise for free each week, including T-shirts and hoodies, a Grimace chair and custom McDonald’s sign from the set of a TV commercial as grand prizes.

There is also a full line of limited-edition CPFM x McDonald’s gear available online.

Copyright © 2022, ABC Audio. All rights reserved.

Student loan forgiveness: Key dates and details so far

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(WASHINGTON) -- Within days, millions of Americans are expected to be able to take their first steps to cancel up to $20,000 in debt under President Joe Biden's federal student loan forgiveness program -- a multibillion-dollar initiative cheered on by advocates but which already faces legal challenges.

The Biden administration announced in August that single borrowers who earn under $125,000 can qualify for $10,000 in federal school loan debt cancellation while those who are married qualify for that amount if their joint income is under $250,000 (as calculated by gross adjusted income from 2020 or 2021).

Recipients of Pell grants -- which are designed for people with "exceptional financial need," according to the government -- are eligible for an additional $10,000 to be canceled, or $20,000 total

Of the 43 million federal student loan borrowers who have accrued more than $500 billion in debt, most will need to fill out an application to see if they qualify for forgiveness. Only about eight million of those borrowers will automatically have their debt canceled, according to the White House, because the Department of Education already has their income information.

On Thursday, the Biden administration quietly excluded some borrowers of Perkins loans and Federal Family Education Loans (FFEL). Both groups formerly qualified for loan cancellation. While some four million Americans in total have these loans, an administration official told ABC News that only about 770,000 people will be affected by the change.

At a Sept. 26 briefing, White House press secretary Karine Jean-Pierre said there would be additional updates on the application process "very soon." The administration maintains that the "simple process" will open in early October.

Outside experts are more skeptical of how smoothly the program will run.

"When you see the huge numbers that the administration projects will benefit from this initiative, that all depends on people being able to take these steps and have that debt relief applied to their account in a way that actually works," said Mike Pierce, executive director of the Student Borrower Protection Center, an advocacy group.

Here are the key dates and details, so far, for applying for student loan forgiveness:

Early October: Loan forgiveness applications open

Applications for student loan cancellation will be released in early October, according to the DOE, though a more specific date has not yet been confirmed.

The department is recommending that everyone file an application, even those who might already qualify for automatic forgiveness.

To be notified when the process has officially opened, the department recommends borrowers sign up at their subscription page. (Private companies like Navient and Nelnet, which help administer the loans and repayments, are likewise referring borrowers to a government portal created to share updates on student loans.)

It's unclear how many of the 43 million borrowers will submit applications. In cost estimates, the White House has said it could be as many as 75% of eligible people or as few as 50%.

"It will all depend on how good we are getting the word out about this opportunity and making sure that people actually do raise their hands to get in the line to get their debts canceled," Pierce said.

Nov. 15: The recommended deadline to apply

DOE officials recommend that borrowers apply for student loan forgiveness by Nov. 15 in order to receive relief before the pandemic-era payment pause expires on Dec. 31 and interest begins accruing again.

The department said they expect a four-to-six-week turnaround for forgiveness.

However, some advocates like Pierce worry that may not be feasible, given the track record the federal government has with processing debt relief.

The DOE has not released details regarding a plan for borrowers whose applications are still being processed by the time the payment pause lifts after December.

Jan. 1: Student loan payments resume

Jan. 1 is when regular student loan payments will resume after a three-year moratorium first enacted under President Donald Trump during the onset of COVID-19. If a borrower's entire balance is not erased by the federal forgiveness program, interest will begin accruing again on the remaining sum.

Dec. 31, 2023 : The program application sunsets

The application period for student loan forgiveness will close on Dec. 31, 2023.

Copyright © 2022, ABC Audio. All rights reserved.

Meet the women who went viral for delivering a resume cake to Nike headquarters

Denise Baldwin

(NEW YORK) -- Getting a foot in the door at a company is a huge step for any job seeker. And one woman's clever concept involving a cross-country pastry ploy quickly went viral on LinkedIn, but it was an unexpected friendship with the Instacart delivery woman who was integral to the plan that was the real icing on the cake.

Like so many Americans searching for their next move in a sea of creative, well-qualified applicants, 27-year-old Karly Pavlinac Blackburn was hoping to land a conversation at her dream company but got stuck trying to figure out how to break through.

"I was actually talking to my former colleague about getting in front of employers -- and he was like, 'Well, Karly you need to do better ... show up in a creative way ... what about a resume on a cake?' " she recalled, speaking with ABC News' Good Morning America.

Although Pavlinac knew there were no open positions with Valiant Labs, Nike’s new business incubator, she took up her colleague's suggestion in the hopes that it might help her find some favor within their team.

"I was like, I'm actually going to do that," she said, noting that she hoped the cake would ensure she was "on their mind if roles did come up in the future."

As for the execution, Pavlinac, who previously founded and sold a celebrity fitness monetization app, admitted "it was kind of difficult" because she lives in Wilmington, North Carolina, and Nike World Headquarters are based in Beaverton, Oregon -- meaning she couldn't just swing by a bakery, pick up a specialty order and deliver it to them herself.

"I'm on the other side of the country trying to get a cake delivered to Nike, [which is] in Oregon," she said.

Instead, Pavlinac searched online and found an Albertson's store 4.4 miles from Nike World Headquarters that offered screenprint-frosted photos on sheet cakes with delivery options through Instacart.

"The only difficult thing is when an Instacart delivery is made, you don't know who's gonna deliver it," she said. "The cake has to be made ahead of time, so I had to call Albertsons and I was like, 'Hey, there's gonna be a delivery on this day, I know, you don't know about it yet, but I'm gonna have to have this cake ready. You're gonna need the image, and it's gonna have to be ready before they get there [to pick it up].'"

On Sept. 8, an hour ahead of the delivery window at 8 a.m. local time, Pavlinac called the Albertsons store to confirm the order -- a half-sheet vanilla cake with her resume printed on top -- would be completed.

Everything was on schedule -- now all Pavlinac needed was to ensure the cake would make it to its location.

"Lucky for me Denise was the person from Instacart that day to pick up the cake, because she's just so amazing," Pavlinac said, referring to highly ranked platinum Instacart courier Denise Baldwin.

Baldwin had her own to-do list once she arrived at the store to pick up the cake delivery.

"[Pavlinac] wanted me to take a look at it and make sure it looked OK," Baldwin told GMA of the initial instructions that came with the Instacart order. "Me and the baker were both talking about it, because we couldn't believe that somebody had gone out of the box and did a resume on a cake ... I messaged Karly and said, 'It looks great. I'm on my way to the campus, and I'll let you know how things go.'"

The two stayed in constant communication after Baldwin left the store and navigated the massive Nike campus in search of Mac Myers from Business Operations at Nike Valiant Labs.

"She gets there and someone from security was like, 'OK leave the cake here.' And [Denise] said, 'No, I have to give it to Mac, I have to see it go in his hands,'" Pavlinac recalled. "At the time I didn't know this, but she had her 8-month-old son on one hip the whole time -- she didn't even tell me, she was just like, 'I'm gonna get it done.'"

The working mom of three -- with another on the way -- told Pavlinac, "'Don't worry, I'm here on the campus. I'll do whatever it takes.'"

Myers eventually came down after a call from security letting him know about the delivery. According to Baldwin, Myers was "kind of blown away" and even asked to take a picture of himself with the cake for confirmation.

The pair later shared their story in a now-viral LinkedIn post, which has been liked more than 100,000 times and garnered thousands of comments.

Pavlinac has been busy ever since with back-to-back calls from recruiters and potential employers. She's also been checking in regularly with her new mentee, Baldwin, who is looking for her dream job as well.

"My day is jam-packed from 8 [a.m.] to 5 [p.m.] with conversations, interviews -- I have so many amazing messages from people on LinkedIn that I'm still trying to go through," Pavlinac said, adding that she has her sights set on a future in product marketing.

"The cool thing afterwards was, [Denise] texted me, 'You've inspired me to go chase after something better,'" Pavlinac said. "I told her whatever I can do to help find a job ... be it sharing documents on 'how to do a job should search' or talk[ing] about what jobs might fit."

Baldwin, a self-described "go-getter," said she's looking for a position in an assistant or human resources role that capitalizes on her communications and multitasking skills.

"I'm just trying to get my foot in the door where I can have good benefits for my kids and have some security and stability," she said.

Perhaps more important is the newfound friendship the two women have developed as a result of their cake delivery scheme -- and what that friendship has taught them both.

"Denise inspires me to be a better person," Pavlinac said.

Copyright © 2022, ABC Audio. All rights reserved.

Hurricane Ian could cause $75 billion in damage

Ricardo Arduengo/AFP via Getty Images

(NEW YORK) -- Hurricane Ian flooded cities and devastated homes across Florida and coastal South Carolina, leaving destruction in its wake.

Search-and-rescue missions are ongoing as the death toll climbed to 85 on Sunday, based on information from local officials. Meanwhile, residents and officials assessed the damage incurred by the storm.

In all, the economic damage wrought by the hurricane could reach up to $75 billion, according to a projection released on Saturday by data firm Enki Research, which studies the financial impact of storms.

The estimate put the best-case scenario for storm damage at $66 billion, Enki Research said. The median projection of cost amounts to $71 billion, according to computer models used by the data firm.

Hurricane Ian will be among the 10 costliest storms in U.S. history, Enki Research said, adding that it may end up among the five costliest after the damage is fully assessed.

However, the projected costs for Hurricane Ian would amount to less than half of the damage caused by Hurricane Katrina, which totaled $161 billion.

Hurricane Ian demolished homes and businesses, damaged infrastructure like roads and bridges and harmed citrus fruit trees that make up a key industry in the state.

Florida accounts for 70% of citrus fruits -- such as oranges, grapefruits and tangerines -- produced in the U.S.

Fixtures of the state's tourism industry, like Disney World and Universal Orlando, temporarily closed as the storm approached earlier this week. On Friday, the parks announced that they would begin to reopen in phases.

President Joe Biden on Friday said destruction from Hurricane Ian could end up among the nation's most severe.

"We're just beginning to see the scale of that destruction," he said, adding that the damage is "likely to rank among the worst" in U.S. history.

On Thursday, Biden approved a major disaster declaration for Florida, allowing additional federal aid to flow to the state.

Speaking on Thursday, Biden vowed support for state and local officials as they assess the damage caused by the storm, saying the federal government will cover the full cost of clearing debris and of rebuilding public buildings like schools and state fire stations.

The government will also be providing support to people with destroyed or damaged homes.

On Wednesday, the then-Category 4 hurricane sustained wind speeds of 150 mph as it made landfall on Florida's west coast. The storm struck the coastal city of Fort Myers and affected nearby cities of Tampa Bay and Sarasota, before traveling east across the peninsula toward Orlando.

On Friday, the storm made landfall in South Carolina as a Category 1 hurricane, causing flooding and home damage in coastal cities like Charleston and Myrtle Beach.

“It’s definitely going to be one of the stronger storms and more damaging storms,” Chuck Watson, Enki Research founder and director of research and development, told Bloomberg on Tuesday.

Hurricane Charley, a major storm that struck Florida in 2004, caused damage that today would amount to between $20 billion and $25 billion, Watson said.

While it caused major damage, Hurricane Ian avoided a large disruption of the U.S. oil and gas industry, which would have come about if the storm had traveled toward Texas and Louisiana, industry analysts previously told ABC News.

The state doesn't host any oil refineries and accounts for about 6,000 barrels of oil production each day, said Andy Lipow, a longtime oil analyst and president of Lipow Oil Associates.

That output makes up a tiny fraction of overall U.S. oil production, which amounts to 11.8 million barrels per day, the U.S. Energy Information Administration reported this month.

Copyright © 2022, ABC Audio. All rights reserved.

Why the all-new Corvette Z06 is breaking barriers


(PITTSBURGH) -- Tadge Juechter has spent nearly 30 years perfecting every generation of the Corvette. With the Z06, the latest Corvette to roll off the assembly line in Kentucky, he and his team of engineers are breaking new ground.

The sports car's naturally-aspirated, flat-plane crankshaft V8 engine produces 670 horses, a feat neither Juechter nor his team believed was possible.

"Every design element centered around maximizing horsepower and track performance," Juechter, Corvette's executive chief engineer, told ABC News from Pittsburgh International Raceway, where journalists were test driving the car.

The Z06 races from 0-60 mph in 2.7 seconds. With the Z07 performance package, the time drops to 2.6 seconds.

"This car is more powerful than the last generation," he went on. "When we started the project it was a bit of a gut check. We weren't sure we could match the output of the supercharged small block [engine]. We pushed as much as we could."

Enthusiasts and gearheads have been anxiously awaiting the Z06's arrival. The track-focused sports car, with an 8,600-rpm redline and top speed of 195 mph, is the sole General Motors vehicle to be built with the all-new 5.5L LT6 engine.

It will also likely be the last. In April, Chevrolet posted a teaser clip of an electrified Corvette in camouflage, drifting and dancing on an ice track.

GM President Mark Reuss confirmed in a LinkedIn post that the Detroit automaker was currently developing a hybrid version of its storied sports car. A fully electric Corvette was in the works too, Reuss said.

The Corvette community has been "amazingly supportive" of the brand's electrified direction, Juechter said, adding that some owners may need more convincing.

"There are people who have said, 'That's not for me, hope you sell internal combustion engines forever,'" he explained.

Tyson Jominy, vice president of data and analytics at J.D. Power, has a stern message for the doubters: electrification will make the Corvette even better than it is today.

"The things you can do with electrification far exceeds ICEs in almost every capacity. I don't think that's up for debate," he told ABC News. "I recognize that not everyone thinks that way and it may take a long time for Corvette buyers to come around."

The anti-electrification attitude in enthusiast circles may help explain why Porsche and Chevrolet have posted record sales of the 911 and Corvette in the last two years. According to J.D. Power, the midsize sports car segment now accounts for 0.5% of the U.S. auto market, up from 0.3% pre-pandemic.

Jominy expects eager buyers to pay well above the Z06's MSRP of $103,500. Options and performance packages can push the price to $170,000.

"The Z06 is the spiritual center of Chevy and such an important vehicle," he said. "Chevy is not building a lot of these. I expect demand to be extraordinarily high."

John Pearley Huffman, senior editor at Road & Track, said the aural and tactical satisfaction of the Z06 can't be matched in a hybrid or electric Corvette.

"It's not just raw acceleration, you can feel the gears grinding in your hands," he said. "It’s stinky rotten fast ... and may be the last, great mechanical Corvette and the most satisfying to drive in the artistic sense. This is a quantum leap for Corvette."

For the die-hards who will repent the end of Corvette's famed V8 powerplant, Pearley Huffman said that would be a mistake.

"You have to embrace the future. Going electric doesn't mean these cars and naturally aspirated engines will go away," he noted. "They'll be artifacts of the time. An electrified Corvette is still something to look forward to."

Ivan Drury, director of insights at car-shopping service Edmunds, remembers the backlash when Chevrolet debuted the eighth-generation Stingray in 2019. The engine now sat behind the driver and the manual transmission option was gone.

"There was a lot of talk about alienation but there has been so much demand for a product that was very polarizing," he told ABC News. "The C8 Stingray has shattered sales records."

Drury expects even non-Corvette fans to seek out this Z06, one of the last sports cars on the market with a naturally aspirated engine.

"People are nostalgic about what's going on in the industry. The Z06 will be seen as an investment," he said, adding, "The car will become a museum piece. I want to see it alive, living and breathing on the tarmac."

Brian Baker, the director of collections and education at the National Corvette Museum and a former GM engineer, said Corvette devotees can view the Z06 up close at the museum, including every Z06 produced since 1963, when Chevrolet introduced the nameplate. The museum, a 501(c), is raffling off a 2023 Z06 on Dec. 15.

Baker said his blood curdled the first time he heard the Z06's engine being revved.

"It was like the hounds of hell being released," he told ABC News. "The engine has a very different sound ... more akin to what European exotics use. It's a remarkable advancement for Corvette."

As for Corvette going electric, Baker said longtime customers have to embrace the future.

"Corvette is not sitting still," he said. "While we preserve the heritage, it's a moving, living brand. We are moving into the 21st century."

Workers at the Bowling Green Assembly plant, where 1.1 million Corvettes have been built since 1981, are busy filling the "flood of orders" for the Z06, Juechter said. Chevrolet capped production this year to meet unprecedented demand following the Z06's reveal.

"The reaction from our customer base has been astonishing," Juechter said. "Dealers have hoards of people wanting to get a place in line for this car."

Even the harshest of critics -- the car aficionados who revere Italian and German supercar performance -- will be impressed with this Z06, Juechter said.

"The big picture was to emulate the soul of Ferrari but match Porche's clinical speed," he said. "This is the most aggressive aero we've ever done. But the Z06 is still a street car."

Juechter pointed to the reaction of a Formula One driver who lapped the Z06 in Pittsburgh last month.

"He gave me a hug when he got out of the car," he said. "The proof is in the pudding when you drive it."

Copyright © 2022, ABC Audio. All rights reserved.

Kim Kardashian charged by SEC over crypto post

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(NEW YORK) -- The Securities and Exchange Commission on Monday charged reality star Kim Kardashian over a post she made promoting a crypto asset security sold by EthereumMax "without disclosing the payment she received for the promotion."

Kardashian will pay $1.26 million to settle the civil charges, the SEC said in its announcement.

The SEC alleged that Kardashian failed to disclose that she received $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax.

"This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors," SEC Chair Gary Gensler said in a statement.

"We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals," he added.

The $1.26 million settlement equals the payment Kardashian received for the promotion as well as a $1 million penalty, the SEC said. Kardashian also agreed to forego the promotion of any crypto asset securities for three years, the agency added.

Kardashian is among a number of celebrities named in a class-action lawsuit filed last January in a California U.S. District Court over allegations from investors that they suffered losses after the celebrities promoted the crypto coin. That court case is ongoing.

The plaintiffs invested money after “viewing numerous celebrity endorsements of EMAX,” the lawsuit said.

Kardashian filed a motion to dismiss the lawsuit last month, arguing that none of the investors claimed to have seen her promotional Instagram posts.

The value of an EthereumMax coin fell 1.75% on Monday.

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Turkey prices soar ahead of Thanksgiving, what consumers can expect

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(NEW YORK) -- The centerpiece for Thanksgiving tables across the country will cost more than ever this holiday season.

The American Farm Bureau Federation announced Wednesday that "families can expect to pay record high prices at the grocery store for turkey" due to bird flu and inflation.

The organization analyzed turkey costs in their latest Market Intel, finding retail prices on fresh boneless, skinless turkey breast reached a record high of $6.70 per pound in September, which is up 112% from 2021. The previous record high price was $5.88 per pound in November 2015, during the highly pathogenic avian influenza outbreak.

"This is particularly challenging for turkey production, because it takes a really long time to grow a turkey to its market weight of about 30 pounds. So when we saw these significant shocks to supply this spring, we're now seeing it in grocery stores reflected in those prices today," American Farm Bureau Federation senior economist Veronica Nigh told ABC News' Good Morning America.

With inflation at a near 40-year high, retail food prices were up 11.4% in August compared to the same time last year.

Despite higher prices, farmers and retailers believe there should be enough turkeys to meet the holiday demand.

"All of us are feeling the pain of higher prices at the grocery store," American Farm Bureau Federation President Zippy Duvall said in a statement. "HPAI outbreaks in the spring and an uptick in cases in the fall are taking a toll, but farmers remain dedicated to ensuring America's food supply remains strong."

Over 40 states have confirmed cases of bird flu, which has wreaked havoc on 46 million birds in the U.S.

In Minnesota, the top turkey supplier in the U.S., the situation has gotten so dire with the deadly outbreak that Gov. Tim Walz signed an executive order to waive trucking regulations in an effort to help fight the spread.

"If your turkeys end up with bird flu, any other poultry on the farm, whether it's meat chickens, egg layers, they all have to be exterminated and that's not only a huge financial loss that's just a really sad situation," Nellie Lovenduski of Slate River Farms told local affiliate WXXA-TV.

But farmers maintain that consumers can still find their Thanksgiving turkeys.

"I think at a minimum you're going to see an increase in price in turkeys even in the big box turkey providers," Lovenduski said.

But Nigh explained there's still ways to save.

"We're looking at ways to perhaps mitigate cheaper Thanksgiving dinner and maybe more side dishes to go along with that with that turkey and looking for substitutes at the grocery store," she suggested. "Think about getting a frozen burger rather than a fresh turkey this year. Ways to really stretch that dollar and so that we can all be together but still have that traditional Thanksgiving dinner."

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Many people evacuating Hurricane Ian face dire financial choices

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(NEW YORK) -- Fleeing Hurricane Ian, Kallie Collins, her fiance and four of her children flew out of Tampa Bay on Tuesday hours before the airport halted flights. However, her fifth child, a 14-year-old boy, wasn't on the plane with them.

Months earlier, the family had purchased plane tickets for an October visit to her parents in Minnesota. As the storm headed straight toward their Tampa Bay-area home, the airline allowed them to move up their departure date and evacuate.

But her eldest son hadn't wanted to come along back when they scheduled the trip, and they couldn't afford to add a ticket for him.

"Leaving your child behind in a situation like this is just horrible," she said. "I felt so guilty."

The family had spent all of its savings, a total $1,100, on hurricane preparations like storage for their valuables and medical supplies for her two children with special needs, Collins said. Ultimately, she found a brother-in-law who could shelter her son at his home in Jacksonville.

"With our savings depleted, plus inflation, we're in a really, really tough financial spot," Collins said. "I have no idea how we're going to get through this."

Collins is hardly the only person fleeing Hurricane Ian who faced dire financial choices in recent days.

More than 2.5 million Floridians fell under an evacuation order on Wednesday as the hurricane barreled toward the state, where 13% of people live in poverty and the median annual household income is about $58,000.

For low- and middle-income households, the costs of evacuation can force individuals to put themselves in harm's way, go into credit card debt or rely on support from family members and charity, advocates and experts said.

"The insecurity that so many people in this country are facing — you see it play out during a hurricane," Mechele Dickerson, a professor at the University of Texas Law School who has studied the costs of living through a hurricane, told ABC News.

"The evacuations show the same thing we saw during COVID," she added. "As soon as everything was shut down, the disparities were on display."

Evacuating Hurricane Ian is unaffordable for many

During Hurricane Harvey, which struck Texas and Louisiana in 2017, hurricane evacuation cost households an average of $1,200, David Bierling, a researcher at A&M's Texas Transportation Institute and Hazard Reduction and Recovery Center, told the Texas Observer. Costs add up from transportation, lodging, food and lost wages, his research showed.

That sudden financial burden would prove out of reach for most Americans. More than half of people across the U.S. cannot afford to cover a $1,000 emergency, according to a Bankrate survey in January.

Many people cannot afford to evacuate because they lack a car and the savings to pay for alternate transportation, Dickerson said, noting the costs of staying at a hotel also exceed many household budgets.

Further, people who work for hourly wages often cannot afford to miss days or weeks of work as they shelter elsewhere, Dickerson added. "If somebody could be making money if they stay, there's also the income component," she said.

'For low-income people, this is a disaster'

Still, many people have chosen to evacuate from the path of Hurricane Ian, even as they struggle to afford basic needs, said Vanessa Tinsley, the executive director of a Miami-area food bank called Bridge to Hope.

A local influx of evacuees has dramatically increased the number of people seeking food, she said.

"My phone has been ringing off the hook," Tinsley told ABC News. "The increased need is enormous."

Bridge to Hope, which typically provides food to 100 clients by appointment each day, saw the number of appointments shoot up to 156 on Thursday, she added. Tinsley hired two additional staff members to work the food pantry, nearly doubling a staff that usually stands at three. The heightened need will continue for at least a month, she said.

"For low-income people, this is a disaster," she said. "The food budget is the last flexible piece they have."

"You can't call the bank and say, 'I need a lower car payment,'" she added. "You can't lower your car insurance, the cost of your housing, your utility bill."

Jasmine King, a customer service representative for Enterprise Rent-A-Car who makes $16 per hour, evacuated from the Western coastal city of Bradenton on Tuesday night with her five children.

Staying with her kids at a hotel near the Miami airport, King faces $178 per night for lodging as she suffers lost wages from missing her job. In all, King's savings have dwindled to $240, she said on Thursday, adding that she hopes to go home as soon as possible when the roads are navigable.

"This experience has been an eye-opener," she told ABC News. "It's not just the glitz and glam of living in a state like Florida, but do you have a financial backup plan if something goes wrong?"

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Hurricane Ian could cripple Florida's home insurance industry

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(NEW YORK) -- Hurricane Ian could cripple Florida's already-fragile homeowners insurance market. Experts say a major storm like Ian could push some of those insurance companies into insolvency, making it harder for people to collect on claims.

Since January 2020, at least a dozen insurance companies in the state have gone out of business, including six this year alone. Nearly 30 others are on the Florida Office of Insurance Regulation's "Watch List" because of financial instability.

"Hurricane Ian will test the financial preparedness of some insurers to cover losses to their portfolios, in particular smaller Florida carriers with high exposure concentrations in the impacted areas," Jeff Waters, an analyst at risk analytics company RMS and meteorologist, told ABC News. Waters said Florida is a peak catastrophe zone for reinsurers, and those with exposure will likely incur meaningful losses.

More than 1 million homes on the Florida Gulf Coast are in the storm's path, and while Ian's track and severity can change in the coming days, one early estimate pegs the potential reconstruction cost at $258 billion, according to Corelogic, a property analytics firm.

Industry analysts say years of rampant and frivolous litigation and scams have brought Florida's home-insurance market to its knees, with many large insurers like Allstate and State Farm, reducing their exposure to the state in the past decade.

"Insurers most exposed to the storm will be the Florida-only insurers, which we define as insurance companies with at least 75% of their homeowners and commercial property premiums written in Florida," according to a report from Moody's Analytics submitted to ABC News.

The state-run, taxpayer-subsidized Citizens Property Insurance Corp. stands to lose the most. As more local insurance companies in Florida have closed their doors, Citizens has seen its number of policyholders swell from 700,000 to more than 1 million in just the past year.

Florida state Sen. Jeff Brandes, a Republican from St. Petersburg and a vocal critic of Florida's insurance industry, warns that if Citizens can't pay its claims, Floridians should brace for assessments to go up on their own insurance policies under a state law that allows it to assess non-customers to pay out claims.

"Every policy holder in the state of Florida, home and auto, should be watching this storm very carefully because it could have a direct impact on their pocketbooks," said Brandes. He predicts policy holders will see rate hikes of up to 40% next year as a result of Ian.

A spokesperson for Citizens did not immediately respond to ABC News' request for comment.

Florida is already home to the highest insurance premiums in the U.S., something Charlie Crist, the former Florida governor running against incumbent Gov. Ron DeSantis, blames on his opponent.

"Gov. DeSantis let these insurance companies double Floridians' rates and they're still going belly up when homeowners need them most. You pay and pay and pay, and the insurance company isn't there for you in the end anyway," Crist said in a statement Monday.

A spokesperson for DeSantis did not immediately respond to ABC News' request for comment.

In May, DeSantis signed a bipartisan property insurance reform bill into law that poured $2 billion into a reinsurance relief program and $150 million into a grant program for hurricane retrofitting. Among other things, it prohibits insurance companies from denying coverage based on the age of a roof and limits attorney fees on frivolous claims and lawsuits.

At a news conference Tuesday, DeSantis said a lot of the damage from Ian would be from flooding and storm surge. DeSantis said the danger with the Tampa Bay area is that the water has no place to go, noting that the area has close to 1 million residents enrolled in a national flood insurance program.

Homeowner policies typically do not cover flood damage, and most homeowners located in a flood zone often get coverage from the Federal Emergency Management Agency (FEMA). Most private property insurance companies insure primarily for wind damage.

President Joe Biden on Thursday approved DeSantis' request for a disaster declaration for a number of counties in the state. It includes grants for temporary housing and home repairs and low-cost loans to cover uninsured property losses.

"The expense will be higher because of higher construction costs and overall inflation," Denise Rappmund, the vice president of Moody's Public Project and Infrastructure Finance Group, told ABC News. "FEMA is the key source of aid following a natural disaster, but much of the costs to repair and rebuild damaged property will be borne by property insurers who will benefit from $2 billion of state-funded reinsurance."

Analysts say Hurricane Ian has the potential to be among the four costliest storms in U.S. history, mostly because Florida's population has exploded in recent years.

No state in the eastern U.S. has grown faster in population than Florida in the past decade and the state's fastest growing cities: Tampa, Fort Myers and Sarasota, are all in the storm's path. Analysts warn that more people and more homes mean that a major storm could become more destructive and costly.

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What Hurricane Ian means for food and gas prices

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(NEW YORK) -- As elevated prices for oil and gas strain U.S. households, the country faces a weather event that some fear will send the costs of these essentials even higher: Hurricane Ian.

The category 4 hurricane on Wednesday sustained wind speeds of 150 miles per hour as it made landfall on Florida's west coast.

Speaking at an event in Washington, D.C., on Wednesday, President Joe Biden warned oil and gas companies against raising prices amid the storm.

"Do not, let me repeat, do not use this as an excuse to raise gasoline prices or gouge the American people," he said.

Americans need not worry about price increases for gasoline as a result of the hurricane, industry analysts told ABC News, noting that the path of the storm has averted key oil-producing states, such as Texas and New Orleans.

The storm will not cause widespread food price hikes, either, since Florida isn't a major producer of food, analysts said. However, the state is a top exporter of citrus fruit -- such as oranges and grapefruits -- which could experience price hikes depending on the extent of damage, an analyst said.

Here's what to know about the impact Hurricane Ian will have on gas and food prices:

The impact of Hurricane Ian on gas prices

Hurricane Ian will not affect gasoline prices, industry analysts said.

"I don't think it'll have any impact at all," Andy Lipow, a longtime oil analyst and president of Lipow Oil Associates, told ABC News.

Florida, the analysts said, simply doesn't produce much oil. The state doesn't host any oil refineries and accounts for about 6,000 barrels of oil production each day, Lipow estimated. That output makes up a tiny fraction of overall U.S. oil production, which amounts to 11.8 million barrels per day, the U.S. Energy Information Administration reported this month.

"Just as a matter of geography, there is no direct effect on the oil and gas market," Pavel Molchanov, a senior energy analyst at Raymond James, told ABC News. "Florida is not an energy-producing state in the way Texas and Louisiana are."

Hurricane Ian did cause temporary disruption of major oil platforms in the gulf of Mexico, however. As a precaution, BP and Chevron on Monday cut production at offshore oil platforms, evacuating personnel as the storm grew in strength, Lipow said.

Those facilities produce 485,000 barrels per day and represent 27% of oil production in the Gulf of Mexico but less than 5% of overall U.S. oil production, Lipow said.

But the disruption is temporary. BP began working to return personnel to its offshore platforms on Tuesday, the company said.

"Once they get the people out there, it's back to production within a day," Lipow said.

The effect of Hurricane Ian on food prices

Similarly, the hurricane won't cause large-scale hikes in food prices, since Florida doesn't play a major role in the sector, industry analysts said.

"It's just one state in the union and a state that really does not produce a lot of food," Kenneth Scott Zuckerberg, lead economist for grain and farm supply with CoBank, told ABC News. "In the grand scheme of things, this is well within the context of what happens in the agricultural sector."

However, the state does factor significantly in the production of two items: fertilizer and citrus fruit, the analysts said.

Phosphate, a key ingredient of fertilizer, is mined and manufactured in the Tampa Bay-area, where a single company, Mosaic, produces 50% of North American phosphate fertilizer, the company says.

Damage to phosphate-related facilities could disrupt the tight market for fertilizer, but farmers typically accept smaller profit margins rather than pass the cost increases along to consumers, Zuckerberg said.

Another top export in Florida, citrus fruit, accounts for 70% of such foods produced in the U.S. Oranges, grapefruits, tangerines and the juices derived from them could undergo a hike in prices in a matter of weeks if the hurricane damages crops, said Arlan Suderman, a chief commodities analyst for financial services firm StoneX.

"The market is anticipatory," Suderman told ABC News. "As soon as the hurricane goes through and they make an assessment, they'll be pricing in expectations."

If damage to citrus trees proves significant, Suderman said, the recovery of the citrus supply could take "several years."

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How low the stock market could fall and what investors should do, according to experts

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(NEW YORK) -- A year of sharp declines for the stock market reversed over the summer, giving stocks a much-needed rebound. But a bout of deep losses across the major stock indices in recent weeks has renewed fears of further decline.

The S&P 500 on Monday closed at a lower point than it has on any other day of 2022. The Dow Jones Industrial Average, meanwhile, fell officially into bear market territory, meaning it had dropped at least 20% from its most recent peak.

The recent drop marks the latest swing of this year's market seesaw. Bouncing back from a historic plunge over the first half of 2022, the S&P 500 rose more than 15% during a two-month period beginning in mid-June. Over that same period, the tech-heavy Nasdaq spiked more than 17% and the Dow rose nearly 14%.

In recent weeks, the stock market has soured, however, over indication from the Federal Reserve that it intends to continue an aggressive series of borrowing cost hikes until it brings inflation under control -- a policy approach that heightens the risk of tipping the U.S. economy into a recession, market analysts told ABC News.

Still, investors and retirees shouldn't sell their stock holdings in a panic. In fact, some investors should buy additional shares, anticipating that low-priced stocks will eventually recover and yield significant gains, the analysts said.

"Recessions, as painful as they are, ultimately lead to discounted prices," Dan Ives, managing director and senior equity research analyst at Wedbush Securities, told ABC News. "Investors that can navigate that risk could be rewarded on the other side of the dark storm."

Here's what you need to know about why stocks are falling, how much further the decline could go and what investors and retirees should do in response:

Why are stocks falling?

Stocks are falling because the Fed has put forward a string of aggressive interest rate hikes in recent months.

The policy approach aims to slash price increases by slowing the economy and choking off demand. But the move risks tipping the U.S. into a recession and putting millions out of work.

A recession poses a serious threat to the stock market because it could dramatically cut corporate profits, the key focus for stock forecasters. As workers lose their jobs and consumers cut back on spending, business gains dry up.

"The main reason stocks remain vulnerable in recessionary environments is that corporate profitability is affected," Christine Benz, the director of personal finance at financial research firm Morningstar, told ABC News. "That makes prevailing stock prices harder to justify if corporate profitability is sinking."

Typically, the market has climbed in response to news about slowing inflation and a potential softening of rate increases; inflation spikes and rate moves are a common cause of selloffs.

Inflation data released earlier this month revealed that prices rose unexpectedly in August, sending the market tumbling. Last week, the Federal Reserve instituted a 0.75% rate hike, which sent stocks falling even further.

How far will the stock market fall?

It's difficult to predict the specific length of a market slide, the analysts said. But history suggests the downturn could last for several more months and possibly more than a year and that stock prices may fall even further.

Keith Lerner, co-CIO and chief market strategist for Truist Advisory Services, said the rate hikes instituted by the Fed would weigh on the economy for at least 6 to 12 months and potentially even longer.

"Even if the Fed changes course, the rate increases they've just done this year haven't had their full impact," Lerner told ABC News. "With that backdrop, we think it will continue to be a volatile market and the economy will be weakened."

If the U.S. falls into a recession, those losses could be even more pronounced, Lerner added.

Since 1950, the average decline for the S&P 500 during a recession is about 29%, he said. So far this year, the S&P 500 has fallen nearly 24%.

"The market is pricing a mild recession into stocks," said Ives of Wedbush Securities.

The plummet in the S&P 500 this year qualifies it for bear market territory, which offers another lens for assessing the index's historical performance.

In the 26 bear markets since 1929, the S&P 500 has lost an average of 35.6% of its value over a typical duration of 289 days or about 9-and-a-half months, according to a report from Hartford Funds.

What should investors and retirees do?

Investors, including those nearing or in retirement, shouldn't sell their stock holdings out of panic, the experts said.

"Often when you make changes in response to the market activity, you find that the market recovers not long thereafter," said Benz. "My advice is for investors to have long-term strategic asset allocation that makes sense for them and stick with it."

Take, for instance, a 45-year-old investor with a portfolio made up of 70% stocks and 30% bonds, Benz said. The declining value of the stock market may send the balance awry, shrinking the share made up of stocks and raising the share made up of bonds.

Such an individual should buy more stock holdings in an effort to bring the proportions back into alignment with the initial portfolio balance, she added.

"It doesn't feel great – you're adding to the asset class that hasn't performed well," Benz said. "The virtue of the strategy is that it enforces discipline for this idea of putting money into the market when stocks are down and arguably cheaper."

Added Lerner: "The price of admission in the stock market are drawdowns. There are drawdowns every year – some are bigger than others."

For investors nearing or in retirement, the choice is more difficult, since they may lack the long-term time horizon of younger investors. The economic headwinds this year have hurt bonds, a popular safe haven for retiree portfolios.

"This has been a really tough year for those in that age band," Benz said.

She advised pulling out some cash reserves but also urged individuals against overdoing this strategy, especially in a high-inflation environment. People should cash out the "least-depressed assets" in their portfolio, such as short-term bonds or high-quality intermediate bonds, she added.

Retirees could also benefit from placing their money in savings accounts, which tend to offer higher interest rates as the Fed heightens borrowing costs, Benz said. Elevated yields on savings accounts, however, still remain well below the inflation rate.

"Shop around for savings accounts, because there is a huge disparity in terms of yields," she said.

Copyright © 2022, ABC Audio. All rights reserved.

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