re: A.I. investment fund forced to unwind all public stock holdings

Yeah, not 180. It was 22x

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The "rates scare" angle is pure speculation.

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obviously, it's speculation. Why would they come out and admit that?
But occam's razor says that was coordinated. Mind you when their report came out the odds were sitting around 20% for a raise.

I wonder how much of a discount Citadel got to buy that book.

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Oops, I just said something that goes against the conspiracy theory

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how does that go against the conspiracy theory? That's literally the point of the theory. They released the news to stress Leopold ven further in the trading session (Tuesday) preceding the Feds decision (Wednesday) then came in to get it at a discount last night.


Anyway, I'm off this boat now. Someone I know at Blackrock very high up just told me Citadel's report is not what drove the market down ahead of the decision. Just a coincidence.
I stand corrected

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how does that go against the conspiracy theory? That's literally the point of the theory. They released the news to stress Leopold ven further in the trading session (Tuesday) preceding the Feds decision (Wednesday) then came in to get it at a discount last night.

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For starters, Flight's been writing about possible Fed rate hikes at this month's FOMC meeting since as early as June 19, when he said "we see the July meeting as live." He then said " the market is underpricing the probability of a July hike" on July 1. Then he published his case for a Fed rate hike Monday. It was not out of the blue, which is why I mentioned the prepared part, and gives no indication of marching orders.

Even if they were trying to manipulate him, why do it 2 days before making contact with him when he is trying to make deals with others during that time? Jane Street had backed his fund and are Citadel's competition in general and for that deal specifically. Why give someone else the potential benefit, assuming it even does anything? It's giving competition way too much time to reap the benefits of this mustache-twirling plan.

And why would that specifically have stressed him out? Others made the same case, and he had no connection to Citadel before Wednesday evening. There's no reason to believe he had read it or the headline, let alone cared. There was also no significant market reaction to it on Tuesday, as I said in my first post, so it shouldn't have affected him that way.

I won't discuss the fact that index futures were rising all night while the deal was being made, which would have actually helped Leopold out a bit rather than hurt him. Someone might claim that was a fig leaf without providing proof, and I'll lose my shite.

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Someone I know at Blackrock very high up just told me Citadel's report is not what drove the market down ahead of the decision. Just a coincidence.
I stand corrected

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Great to hear. To further point out Flight's ineffectiveness at moving markets, I'd like to mention that he wrote a pro-AI piece on the 4th.

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I don’t think that sounds like too much of a reach. Am I insane for thinking that way?

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Citadel ain’t buying any of this junk on the way down.

And 3 people on the Fed did vote to raise. And Kalshi had odds pre meeting of a 40% raise.

It was not a conspiracy for you or any other retarded investors to lever up AFTER a 600% run to end up losing your money.


NBIS has gone $15 to $290 in liks 2 years. If you think buying the top of that range is good practice then againn, you deserve to lose your money. And if you were scared out of your calls when the market dropped that’s on you. You clearly are lost.

I have read all your posts. You got no clue what you are doing. It is entertaining tho

Claude debunks the conspiracy theory

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Bloomberg reported the Citadel Securities note on July 27. The AI names collapsed on July 24. Nebius and Bloom fell 15 percent that session, SanDisk and CoreWeave 11, IREN 9. The selling that supposedly got engineered had a three day head start on the engineering.

The fear was not planted either. Futures put the odds of a July hike at 34.7 percent on July 22, five days before the note landed. When the meeting came, three Fed officials voted for a hike. A view held by three voting members of the FOMC and a third of the futures market is a live debate, not a rumor someone manufactured. And the note was wrong anyway. The Fed held at 3.50 to 3.75 percent, which is an awkward outcome for a plan that required the Fed to play along.

The two Citadels are also two companies. Citadel Securities is the market maker that published the note. Citadel is the hedge fund that bought the portfolio. What actually broke the fund was a concentrated book on borrowed money with both ends going wrong at once: Adobe, a reported short, rose 24 percent between July 23 and July 29 while the longs fell about 30. The ruthless part of this story is real. It simply happened without a plot. Watching the sequence, not accusing anyone of anything."

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cgrand

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Thank you. Unfortunately, we're trying to prove a negative, that something didn't happen, which is notoriously difficult to do and why positives are supposed to be proven instead (and not just taken as fact because it seems plausible due to coincidence!). So besides what I've already posted and what you provided, I'd like to add more in a desperate attempt to stamp out the plausibility.

The AI names had been dropping for a month but seemed to have stabilized last week until Friday, so the selling started long before the 24th.

The portfolio was both leveraged and concentrated in equities with high annual standard deviations. Primary brokers were willing to give LA the leverage when the portfolio was up heavily, but once losses occurred, they started raising margin requirements. That's why he was looking for capital wherever he could, first by selling Intel after their good earnings Thursday, then by attempting to draw more capital from investors on Friday, and then making deals this week. This is all according to the Financial Times article I linked in a previous post.

Since the selling in AI names restarted Friday and LA started selling Thursday afternoon, it is quite likely he created a negative feedback loop for himself (like I stated in my first post).

Jane Street, which had previously backed the fund, and Millennium were competition for the deal. Since Citadel won the deal while only coming in Wednesday evening, either they offered the best terms or all of the others backed out. The space is far too ruthless for Citadel to try planting seeds of doubt just to give their competition ample time to get the deal first, and if they were the last option, the supposed manipulation wouldn't have mattered anyway.

Edit: I love the bullshite asymmetry principle so much...