Everyone who keeps sharing these short interest charts is missing the flows behind them. Most shops are not taking outright short bets. This is another effort to ease margin requirements across the street: banks providing balance sheet for more speculative bets are asking clients to post more short exposure. The sequence on the street looks like this: HF manager: “I want more margin.” Bank: “Things look risky in public AI bets, and we’re already lending a lot against private AI bets. For some clients, we’ll extend more financing, but only if they add more short exposure to improve their collateral scores.” HF manager: “Okay, I’ll short more stock against my main bet.” That is how you end up with short exposures that look astronomically high while many end users remain heavily long tech. The additional shorts are supporting the financing of their main bets. Which also tells the bigger story on why raw equity financing rates haven’t blown out the way they did ahead of the big SpaceX IPO in June, despite the fact that lending is slowing.

Dan Ives: “If you look at $CRWV, their debt relative to their backlog is miniscule.” I think $CRWV is attractive here but if anybody says that its debt is “minuscule relative to backlog”, it means they have never checked the financials.

Desk summary: McElligott, Repricing the Left-Tail...Fast (22 Oct, 11:15am) Vol regime flip Equity vol, skew and vVol jumping on outright hedge buying after weeks of being ignored. Spot is accelerating through the MegaCap Tech / Nasdaq negative-gamma flip (QQQ ~$715), so dealer hedging now adds to moves. Spot/vol correlation has flipped back to negative: spot down, vol up. Prints: SPX Jan 5900P paid 18.3 on 1.3k; VIX Nov 25C 0.85 bid on 18,150; Dec 7400P paper buys 2k at $84.50. Rates working as the hedge again USD rate vol bid into the duration rally, UST yields at fresh 1-month lows. Big bullish futures and vol buying in 5s and 10s (FVH 106C 15k and 20k, TYZ 107C/107.5C, TY wk5 strangles 20k). Front-end vol up most (1m x 2y +11.2). Short-term bond/stock correlation reversing, so USTs hedge risk assets again. Why: the AI trajectory rethink Both YTD leaders are getting hit together: Tech -2.9%, Energy -1.7%. That's the Semis/Energy barbell (+60% YTD, 3 Sharpe) being de-risked. Catalysts: the Anthropic ARR disappointment and IPO-viability questions, Gartner on CoreWeave and neoclouds, weak AI-ecosystem IPOs, LRCX guide, and a broad sense that capex is flattening versus lofty estimates. That's despite META staying full tilt on capex, and META's big equity secondary shows hyperscalers are in effect selling calls on themselves. AI financing costs are turning non-linear as credit spreads widen, with lots more debt, loans and equity issuance coming. Macro read Earlier this week he called the UST squeeze a positioning and PnL-monetization move, not yet a growth scare. Now he says the market is clearly repricing the left side of the 2027+ US growth distribution, because the AI-capex trickle-down that kept nominal GDP running at 6–10% is in doubt. Desk takeaway Below QQQ ~715 expect bigger moves with vol bid. Hedges and duration are working, and AI infrastructure and neocloud names are the epicenter. Size longs in semis, energy and neoclouds accordingly.

Do it both conventionally and with Grok @Bot, then compare. Actually, it’s worth showing Grok last year’s tax returns and see if it finds opportunities for improvement. There may be refunds you’re owed.

Absolute savages… The historic town hall in Limoges, France is gone. The steeple just collapsed.

State of Geopolitics in a Meme