📱Insta’s mental health toll

1. Facebook’s Spiral: secret docs reveal the extent of Insta’s mental health toll on young users

Rough week for PR... WSJ got its hands on some juicy Facebook-internal docs, and the bad headlines have been snowballing. Controversies include: a secret Facebook moderation program that exempts celebs from usual posting restrictions, and a test initiative that pushed positive news stories about FB to users. The latest shocking revelation: FB has extensive internal research showing that Instagram is toxic for teens.

Not a secret... Criticism of social media's impact on mental health has been building for years, amplified by documentaries like The Social Dilemma and vocal lawmakers. What's notable about FB is the scale of the problem. FB researchers consistently found that Insta is harmful for a significant percentage of users — especially young girls.

• 32% of teen girls said that when they felt bad about their bodies, Instagram made them feel worse.
• 6% of American users who reported suicidal thoughts traced those desires to Instagram. For British users, it was 13%.
• +178%: Suicide deaths for children ages 10 to 14 nearly tripled from 2007 to 2017, when social media saw mass adoption.

The paradox... The most problematic social app features also seem to drive the most engagement — along with profits and stock prices. Last quarter, FB's revenue soared, and profit nearly doubled to $9.5B. Snap and TikTok are also experiencing strong growth, largely thanks to young users who are growing up with these apps:

• 40%+ of Insta users are 22 and younger. Snap reaches 90% of US 13- to 24-year-olds. And 60% of TikTok users are between the ages of 16 and 24.

THE TAKEAWAY

We might be reaching a tipping point... Despite all the bad PR, social companies' revenue engines are thriving. Extensive regulations exist to protect our physical health (think: the FDA for food and drugs, and the NHTSA for driving). But we don't have many guardrails to protect mental health. If social giants start seeing regulatory and public criticism hit their balance sheets, an inflection point could force change. Already, lawmakers are pressing Facebook to abandon its plan to launch Instagram for kids.

2. Stories we're watching...

Surreal estate... Last week, markets wobbled as Chinese property giant Evergrande missed an $83M payment — and it’s just the tip of a $300B debt iceberg. Investors fear that Evergrande's collapse could cause a Lehman-esque global stock slump, and throw markets into turmoil. If Evergrande defaults, its financial partners, including HSBC, BlackRock, and UBS, could lose big money. Investors are watching to see if Evergrande will come up with the cash during its 30-day grace period — or miss more payments.

You're gonna need a bigger boat... More like a higher ceiling. Quick refresher: The US Treasury’s borrowing is limited by a “debt ceiling.” If it needs more cash, it asks Congress to raise the cap. Now, the US needs a higher ceiling to cover trillions worth of Covid expenses, but Congress can’t agree on a limit. If a deal doesn't happen, the US could default on its debts for the first time. Analysts say there’s a 20% chance of default, which could wipe out as many as 6M jobs and $15T in wealth.

3. Coming up this week...

Bed Bath & Beyond expectations... When you finally get the fitted sheet on the twin bed. Last quarter, Bed Bath & Beyond's sales of bathroom and home organization products surpassed pre-pandemic levels, doubling from last year. Cue: BB&B raised its annual sales expectations, and expanded its DoorDash partnership to offer more delivery. We’ll see if the bedding icon saw a back-to-college boost when it reports quarterly earnings Thursday.

Fashion vs. #Flation... Consumer spending surged this spring when shoppers “revenge spent” on new outfits and plane tickets after a couch-bound year. While boosted unemployment benefits have ended, $300/month child tax credits (#SecretStimulus) are now getting doled out. Experts expect spending to keep rising, but prices are also continuing to rise (#inflated). We’ll see if "revenge spending" has continued when inflation-adjusted consumer spending numbers drop on Friday.

4. Last week's highlights...

• Beat: Universal Music shares soared 40% last Tuesday after going public, as the $53B music giant competes to make a soundtrack for the digital economy.
• Mine: Ford partnered with "urban mining" company Redwood Materials to recycle its EV batteries from cars like the Mustang Mach-E.
• IRL: Amazon reportedly plans to open physical department stores that feature QR codes, touch screens, and techy dressing rooms. The goal: end "retail ghosting."

What else we’re Snackin’

• Innovate: How billionaires' quest to "live forever" could benefit everyone.
• Chill: How to interrupt anxious thoughts, according to a psychotherapist.
• Work: A way to answer the dreaded "tell me about yourself" interview question.
• Snooze: How to get the most out of your sleep (since you're prob not getting enough).

Snack Fact of the Day

This Week

• Monday: National Chocolate Milk Day
• Tuesday: Earnings expected from Concentrix, Micron, IHS Markit, and FactSet
• Wednesday: Earnings expected from Cintas and Herman Miller
• Thursday: Weekly jobless claims. Earnings expected from Paychex, McCormick, CarMax, and Bed Bath & Beyond
• Friday: August consumer spending

Authors of this Snacks own shares of: Amazon, Ford, and Snap

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