The Negative Impact of Social Media on Teens

4-10-24

Opening Comments

My last note was about my legendarily poor handyman skills. The most opened links were Mel Blanc on Johnny Carson showing his cartoon voices and the article from the longevity expert who studied how to eat for a long and healthy life.

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• Video of the Day-Impressive Work Out Routine

• The Negative Impact of Social Media on Teens

• Quick Bites

  • Markets

  • Dimon on Rates/Deficits

  • Insurers Spying on Your Home with Drones

  • Next GameStop?

  • NCAA Final Four Stats

• Israel

• Other Headlines

• Real Estate

  • South Florida High-End Residential Remains En Fuego

    • Residential Inventory Building

  • West Palm Beach Condo Unit Developments

  • Class B & C Office Remains Under Pressure

  • Signa Collapse-Another R/E Tycoon Down

Night Owl Cookies

There are 6 locations around South Florida for Night Owl Cookies. The presentation gets an “A,” but honestly, I was expecting more from the cookies. There was nothing special about them other than the creativity of the combinations and the cost was $16.5 for four. My favorite was the Birthday Cake, but there are too many other amazing dessert options for me to run back. This was nothing more than a sugar bomb with a nice presentation for the unsophisticated palate. The quality of the chocolate does not come close to my cookies. I was shocked when the cashier told me they sell 1,500 cookies a day out of the store in Wynwood. I guess the munchies make for good business.

Video of the Day-Hard Core Gym Work

• I have lifted weights since I was 17 years old and love it. However, this short video of a workout routine is another level of craziness. No wonder why these guys are jacked. There is a 100% chance I would tear something if I tried these moves. How they do not kill themselves while doing this is beyond me.

The Negative Impact of Social Media on Teens

I have a love/hate relationship with social media. Yes, I have recently become addicted to videos and am fascinated that the apps know exactly what I want to watch (surfing, fishing, food videos…). However, I have seen firsthand what it does to kids, and a big Rosen Report contributor, Beau, sent me the concerning chart below from the Economist. It shows a huge increase in suicide rates in young girls starting in 2013. This CDC study showed a a sharp rise in incidents and called teen girls “in crisis” due to the rise in suicidal behavior.

What do you think the correlation is to the explosion of social media? I wish I had all the data to run a regression analysis but from what I will outline, I feel the correlation coefficient is approaching one. Yes, the lockdowns of the pandemic also played a role in the spike of 2020 in my opinion as well, but the driving force is social media in my mind. This article by Jon Haidt outlines his concerns (similar to mine) and wrote a book on the topic if you want more details.

Also note, that the amount of time spent on social media has ballooned recently. The Gallup survey found over half (51%) of U.S. teens (13-19) spend a minimum of four hours daily on social media, at an average of 4.8 hours every day on social media. The survey found, on average, female teens spend nearly one-hour (5.3 hours) more each day on social media than their male (4.4 hours) counterparts.

This study suggests that 39% of teens spend over 8 hours/day on social media. That means they are not doing more productive things, homework, playing a sport, exercising, working…

Check out this chart on social media growth. Note the exponential growth occurring at the same time we have seen young girls in a growing crisis. Yes, I created this chart in Excel using data from Statista and Data Portal. User growth is up 5 times since 2010.

Do you think the growth in social media users and time on these platforms is linked to depression, anxiety, and suicide? I sure do. Let me tell you about my experience. I am about as thick-skinned as anyone I have ever met. I ran trading desks and a hedge fund and grew up as a public school kid washing dishes and valet parking cars. I generally don’t care what people think and have the confidence to do my own thing. However, when I see that I get canceled by people for something I wrote, it is frustrating. When I see decades-long friends “unsubscribe,” I get upset and take it personally.

Now think of the impact of a 13-year-old when they see their “best friends” posting at a party the kid was not invited to. Or the boy they like posting they are on a date with a girl that was a friend. These kids see other people living a “perfect” life. Even though it is smoke & mirrors, it is devastating to children. I believe the damage from social media is the single largest contributor to the increased rate of depression, anxiety and mental health of children today.

Some Social Media Timeline Highlights:

• 2005-YouTube launched

• 2005-Facebook launched photo feature

• 2006-Twitter launched

• 2010-Instagram launched its photo-sharing website in

• 2011-Snapchat launched its photo/video sharing and social media service

• 2011-Twitch, a live streaming service launched

• 2012-Facebook goes public at $104bn valuation

• 2013-Twitter IPO

• 2017-TikTok launched

• 2023-4.95bn people use social media in 2023 relative to 2.1bn in 2015 and 970mm in 2010

I believe we need restrictions on age usage for social media and in Florida, a law was just passed prohibiting children under age 14 from being social media account holders. However, you can get it at 14-15 with parental consent. This is a step in the right direction. Parents need to be all over this issue and understand what kids are doing on these horrible apps.

UK’s largest teaching union is pushing parents to buy phones without social media apps for teenagers. We have a serious problem and feel kids are being harmed by over-exposure via these apps. Hopefully, more parents limit usage.

This link from DataPortal has some amazing statistics on social media growth and usage. Sorry folks, social media does far more damage than good for children. USE WITH CAUTION. If social media is not bad enough, now teen girls are dealing with deepfake nudes. Make it stop! What do my readers think on this subject?

Quick Bites

• CPI came in hot, +3.5% year over year and +.3% higher than February, sending yields soaring and stocks tumbling. The Dow was -540pts and the S&P -67pts but settled above the lows. The 2-year Treasury yield jumped 23bps to 4.98%, while the 10-year yield increased 19bps to 4.56% post the CPI news and a poor 10-year auction. For perspective, YTD, the 2-year yield is +69bps YTD while the 10-year yield is +72bps YTD even though there was talk of major rate cuts just a few months prior. Remember, futures were predicting 6 cuts totaling 150bps a few months ago and are now down to 38bps of cuts or 1.5 cuts for 2024. Major stock indices sold off approximately 1% with the Russell underperforming at -2.7% (now Russell is negative on the year). Gold prices are +12% YTD and hit a new high of $2,384 on Tuesday and Costco is selling up to $200mm in gold bars/month per Wells Fargo.

  

  

• I am relentless in my writing around deficits, spending, and entitlements because I can see what is coming. This WSJ article is entitled, “Jamie Dimon Warns U.S. Might Face Interest-Rate Spike,” and outlines his concerns on the topic. JPMorgan Chase CEO, Jamie Dimon, warned that U.S. interest rates could soar to 8% or more in coming years, reflecting the risk that record-high deficit spending and geopolitical stress will complicate the fight against inflation. “Huge fiscal spending, the trillions needed each year for the green economy, the remilitarization of the world, and the restructuring of global trade—all are inflationary,” Dimon wrote in an annual letter to JPMorgan Chase shareholders released on Monday. Dimon, head of the nation’s largest bank, acknowledged in his 61-page letter that the U.S. economy has remained resilient despite abundant skepticism by forecasters including him. But he also warned that a fractious global backdrop, including wars in Ukraine and the Middle East, could amplify economic stresses and put the expansion in jeopardy.  This is a very straightforward short video comparing printing money/inflation with drinking alcohol as said by famed economist, Milton Friedman.

  

• A scary WSJ article entitled, “Insurers Are Spying on Your Home From the Sky-Companies are using drones to check out roofs or to spot yard debris and undeclared trampolines.” Cindy Picos was dropped by her home insurer last month. The reason: aerial photos of her roof, which her insurer refused to let her see. “I thought they had the wrong house,” said Picos, who lives in northern California. “Our roof is in fine shape.”  Her insurer said its images showed her roof had “lived its life expectancy.” Picos paid for an independent inspection that found the roof had another 10 years of life. Her insurer declined to reconsider its decision. Insurers say that customers agree to home inspections when they buy a policy and that photographing properties from the sky is less intrusive than the home visits used in the past. They say deploying fleets of surveillance planes lets them respond more quickly to disasters and charge rates that better reflect a property’s risk. Some customers were dropped based on aerial images that were two or three years old. One person wasn’t renewed because of a roof, despite its being brand new. In another case, a part of the image that Farmers said showed tree limbs turned out to be just shadows. If you need assistance with your Home, Auto, Umbrella and Valuables insurance call my sponsor, Kevin Lang at Lang Insurance (1.866.964.4434) or langins.com. He insures all 50 states and dozens of RR readers have signed up.

• Check out the stock, ALTC. I do not make stock recommendations and this is very speculative, but it looks like something is going on here. It very well may end in tears, but the option action is aggressive. ALTC is co-founded by Sam Altman of Open AI fame. It is a SPAC that agreed to purchase a stake in Oklo, a nuclear fission company (not closed) creating small-scale reactors with the express purpose of powering data centers on stressed power grids. As I understand it, not one holder of Oklo or ALTC is selling in the transaction. Oklo announced an agreement with Diamondback Energy to collaborate on a long-term power purchase agreement sending shares of ALTC + 22% on the day Monday before selling off 12% on Tuesday and down 8% on Wednesday. I am not here to opine on the fundamentals of this company and will not be investing in it. However, the option action is striking with over $800k in $20 calls in 10 minutes on Monday. I expect real volatility given Sam Altman’s involvement, the option activity and the lunacy of the world today. ALTC has $10/share in cash in a trust. Another point is utility stocks like NRG (+42% YTD & VST +82% YTD) are up as people are trying to find ways to play the power theme for AI. The ARM CEO said AI energy needs are not sustainable as it will grow from 4% of US power consumption to 20-25% by 2030. Let’s watch and see what happens over the next couple of months, but I have a feeling ALTC will have some sharp price swings in both directions.

• Given the Final Four for the NCAA Basketball Tournaments for men and women, I thought I would write something about the sport. For the first time in my life, I spent far more time watching the women than the men. Between Caitlin Clark (Iowa), Paige Bueckers (UConn), Angel Reece (LSU), JuJu Watkins (USC), Kamilla Cardoso (South Carolina), Aneesah Morrow (LSU) and so many others, I was hooked. I am not alone. Over 12mm watched the Iowa/LSU which was not even a finals event and 14.2mm watched Iowa/UConn in the Final Four game. The 14.2mm viewers broke ESPNS’s record as the most-watched basketball game in the network’s history. For perspective, the 2022 women’s finals had 4.8mm viewers. We have seen finals viewership for women go from 3.8mm in 2011 to 18.7mm in 2024 (peak viewers was 24mm for the game). South Carolina was just too much to overcome and outrebounded Iowa 51 to 29. Thank you to Caitlin Clark for having a massive impact on growing the game of women’s basketball. On the men’s side, viewership has not been growing and the 2024 lopsided UConn victory did not help. The 2023, finals game for men had 14.7mm viewers, a record low, and the 2024 had 14.8mm or 4mm LESS than the women’s finals this year (Thanks Caitlin). In the 2010s men’s viewership was 21.5mm but the last 5 men’s finals averaged just 17.2mm. Zach Edey is the 7’4” Purdue star, and he was interviewed by 5’2” Tracy Wolfson after beating NC State. Let’s just say there are some funny comments in the media about the 26” height difference. You can barely see her in the interview.

  

Israel

• Israel ‘preparing to strike Iranian NUCLEAR facilities’ amid tense wait for revenge attack and soaring WW3 fears

  • If this happens, where does oil go? I believe Israel cannot allow Iran to have nuclear capabilities. The link compares armies and arsenals between Iran and Israel.

• Israel seeks 40,000 tents to evacuate Rafah civilians; hostage talks with Hamas languish

• Biden To Force Jewish-Made Products From Israel To Be Labeled

• Suspensions and Expulsions Follow Anti-Israel Student ‘Occupation’ at Vanderbilt College

  • During appeals, kids can remain at school.

• Pomona College President Suspends Anti-Israel Student Protesters and Has Them Arrested

Other Headlines

• Hedge funds are selling stocks at the fastest pace in three months and stepping up short bets

• U.S. ready to sanction Chinese banks if they aid Russia’s war machine, Yellen says

• The Optimism Index decreased by 0.9 of a point in March to 88.5, the lowest level since December 2012.

  • Stocks near at all-time highs. Why is small business optimism so weak? The survey cites inflation as the biggest problem with lending standards and rates also an issue.

• Ripple CEO predicts crypto market will double in size to $5 trillion by the end of 2024

  • Here we go again with crazy crypto predictions. I worry this is a sign of a sell-off.

    

• Chase Bank to Let Advertisers Target Customers Based on Spending Data

  • Marketers in the new program will only pay the bank when a customer makes a purchase

• HAW-UAW Large Unit Votes to Unionize, 93% In Favor

  • Non-tenure-track faculty at Harvard voted 1,094-81 to unionize under Harvard Academic Workers-United Auto Workers.

• Retailer 99 Cents Only files for bankruptcy, plans to shut down

  • 10,800 employees will lose their jobs. Check out the CEO’s comments on why. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment, including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures and other macroeconomic headwinds, all of which have greatly hindered the company’s ability to operate.”

  • Average interest rate on US New Car Loans is up to 8.57%

    

• Letitia James to Begin Claiming Donald Trump's Properties

  • The $175mm bond from an insurance company will not be permitted (paperwork issues) and Letitia James will begin enforcement proceedings according to this Newsweek article.

• Trump Media & Technology Group shares continue to fade

  • I called out the $10bn valuation at 2,000 times revenues as absurd in multiple reports over the past two weeks. The price of the stock fell from $79.4 on 3/26 to $34 or -57% in two weeks and it is still massively overvalued at 1,140 times revenues.

• Biden announces more student loan relief plans in battleground Wisconsin

  • I don’t think this is a coincidence happening in an election year in a battleground state. The plan could erase up to $20k of interest for millions of borrowers.

• Arizona Supreme Court rules a near-total abortion ban from 1864 is enforceable

• Swiss To Hold Referendum That Will Restrict Population To 10 Million Until 2050

• Judge who allegedly let gun-toting squatting migrant off hook despite DA’s bail plea previously let cop beaters go

• Illegal migrant deported 8 times with 11 arrests now charged with murder in Ohio: 'Our border is broken'

  • How porous is our border if the guy was deported 8 times? I have received much hate for my early call out of the open border policy and this is another example of the government failing the citizens.

• Brazen NYC gangbanger who’s already racked up 9 arrests this year keeps getting cut loose due to woke bail reform

  • Read this story and tell me this is good for the citizens of NYC. The statistics of repeat offenders in the article are concerning.

• Migrant repeat offenders viciously attack cops during bust for ransacking NYC Target

  • Why are they not deported?

• Bat-wielding homeowner catches porch pirate by setting trap, video shows

  • I LOVE IT.

• New York women turn to self-defense classes as series of punching attacks continue

• Ex-con busted on drug, gun charges at NYC subway station works for anti-violence group in the Bronx

• Purse-snatching bully punches woman, 68, in face and down NYC church stairs — then takes her car as she lies in agony

• NYC owner of $1.1M house torched by squatters says they keep coming back and ‘have more rights’ than landlords

  • I don’t care where you sit politically. Someone needs to explain to me in what alternative universe someone can steal your house and have any rights. Read the new “Squatters Laws” in Florida to see how it is done.

• NPR defends its journalism after senior editor says it has lost the public's trust

  • I agree with the journalist who suggested the NPR is incredibly biased.

• Ivy League College Costs Soar to More Than $90,000 a Year

  • I am looking at colleges with my kids and can tell you that “ALL IN” costs of college, dining out, Ubers, travel home, spring break, and winter break… can be well more than $100k. I continue to believe that more kids should look at vocational programs based on the cost/benefit analysis.

    

• Retiring in your 60s is becoming an impossible goal. Is 75 the new 65?

  • We are living nearly 20 years longer than when Social Security was enacted in 1935 yet people feel 65 is retirement age. I believe people will be working a lot longer going forward due to financial issues, inflation, cost of healthcare and aging. I do not see how entitlements will stay in current form given the structural issues. Means testing and raising the age of benefits must happen ASAP.

• Francis Ford Coppola’s ‘Megalopolis’ Faces Uphill Battle for Mega Deal: “Just No Way to Position This Movie”

• This NYC chicken joint employs cashiers Zooming in from the Philippines — and still wants you to tip!

• Hospitals Cash In on a Private Equity-Backed Trend: Concierge Physician Care

  • I can tell you firsthand that getting doctors in Florida is not easy and many concierge doctors are full. The annual cost can be high, and given how bad insurance reimbursements have become, many refuse to accept anything.

• Smoking cigarettes can destroy lungs, but shocking new study reveals why vaping can harm the heart

• Why scents are being used to treat dementia and depression

• More than 100 US deaths linked to Ozempic and similar weight loss drugs - including 28-year-old who died from 'intestinal mass' and a pregnant woman, our analysis shows

• Solar eclipse 2024

  • This story is of a woman with permanent eye damage from looking at the 2017 eclipse.

Real Estate

• The South Florida Market is white hot at the high end from Miami To Palm Beach after a slow 4th quarter. In many cases, billionaires are pushing out mega-millionaires. The number of homes sold from Miami to Palm Beach over $50mm is staggering in recent months. In my community, 10 homes sold more than $12mm in the 1st 13 weeks of the year. For perspective, the year I moved down in 2017, one home sold more than $10mm for the entire year. More than triple the sales volume in the 1st Q relative to the 4th Q in my community. New and move-in modern homes are in the highest demand (furnished and ready to go). If there is value, it is in lots or older homes that require work. There is a big premium for new, furnished, modern, and move-in condition today. Remember, some communities/towns can take a year to get permits, and carrying costs are a lot higher given rates and the higher price of land acquisition costs coupled with high R/E taxes and interest rates today. I spoke with someone who is moving his family from NYC to South Florida and was updating him on the market conditions being hot at the high end. His response was, “It makes sense. Have you been to NYC recently?” His insinuation was the quality of life is not what it once was and he made it clear he has no plans to raise a family there going forward. Young, wealthy, educated, earners are not what NYC can afford to lose.

  

  • However, for Florida in total, we are seeing more listings as well as in other cities including Dallas. This CNBC article is entitled, “11 U.S. cities where you need to earn over $200,000 to buy a typical home,” and is another reason that lower and mid-priced homes are struggling to sell.

    

    • Two dozen projects in West Palm Beach will provide almost 7,000 new units based on new construction plans. When the Bristol opened in 2019, it was the coastal city’s first new condominium in a decade. Five years and one transformative pandemic later, developers have two dozen residential projects in the works, with a pipeline of nearly 6,600 units, according to an analysis by The Real Deal. Projects run the gamut from small townhouse developments to highly amenitized luxury towers with eight-figure penthouses. Details of the projects are in the main link. I do feel there is a lot of condo product coming to market and it will be interesting to see how it holds up over the next two years.

      

• Class B and C office buildings continue to sell at sharp discounts to prior sales. An iconic Cleveland skyscraper has been sold at a massive ~70% 'discount' to what it last sold for 5 yrs ago. The 1.26M sq ft tower located at 200 Public Square sold for $54M, or $43 per sq ft The tower last sold for $187M in 2018. Many of these required capex and improvements after the initial purchase, so the discount is generally higher than stated. Check out this St Louis 1.4mm square foot tower that sold for $4mm or $3/foot. The last sale in 2005 was $205mm. Note that Apple is expanding to Miami with a new office in Coral Gables.

• Crazy Bloomberg article about, Rene Benko, a real estate tycoon who wooed big investors only to crash and burn. The article is entitled, “Arrogance, Opacity and Debt Triggered Signa’s Dramatic Collapse,” and outlines big bets during a low interest rate environment coming back to haunt the investors. Benko was building a “war chest,” he told investors, boasting that the new firepower would allow him to procure the choice assets of struggling competitors to add to his luxury real estate portfolio. Shortly after, he would close his biggest-ever acquisition: the Selfridges department store on London’s Oxford Street. But just 18 months later, Benko’s competitors are the ones sifting through the ruins of his €23 billion empire, while the former billionaire has become the European property meltdown’s most prominent casualty. The article cites poor corporate governance, lack of transparency, and a convoluted private debt structure as red flags. Despite this, prominent investors lined up to chase big returns in a zero-rate environment.

© 2024 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #672 ©Copyright 2024 Written By Eric Rosen.