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eigenspace 52 minutes ago [-]
Quite the funny headline. It initially made me think that someone had come up with some sort of quantitative measure of the situational awareness of traders, and was claiming that there was an increase in traders making dumb trades that misread the situation or something.
Ironically, I would describe this selloff as an increase in situational awareness.
HarHarVeryFunny 15 minutes ago [-]
Well, effectively that is kinda what it is saying, although it's the situational awareness of one particular trader it's referring to. The situational awareness of Citadel who scooped up their portfolio at fire sale prices seems quite good!
willchis 42 minutes ago [-]
Ha yes it definitely reads like an Onion headline.
NooneAtAll3 50 minutes ago [-]
[flagged]
13unk0wn 47 minutes ago [-]
> Leopold Aschenbrenner’s hedge-fund firm Situational Awareness is down around 67% so far in July after incurring heavy losses on AI stocks...
HarHarVeryFunny 13 minutes ago [-]
More than just down - liquidated (sold to Citadel) due to pending margin calls.
jrrv 40 minutes ago [-]
Literally the first line
temp0826 17 minutes ago [-]
When I read a title it helps me to determine whether I want to read it or not. This one is tricky and confusing because the company name is stupid and was probably picked for the clickbait potential. This is absolutely one where I read the comments before the link.
bspammer 47 minutes ago [-]
The link is right there, and the answer is in the first paragraph.
an_account 26 minutes ago [-]
All I see is a paywall
2 minutes ago [-]
iso1631 18 minutes ago [-]
All I see is an accusation of being a robot
bspammer 25 minutes ago [-]
The paywall does not cover the first paragraph
46 minutes ago [-]
scrlk 41 minutes ago [-]
> Aschenbrenner party blamed short sellers who targeted the firm’s positions for exacerbating the fund’s losses, the letter said. The letter compared Situational’s experience to a bank run.
4 years ago, it was SBF blaming Changpeng Zhao for shorting FTT and triggering a run on FTX.
Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.
stephbook 4 minutes ago [-]
Even Wirecard – a fraudulent German bank missing some billions of euros and run by a Russian spy – always blamed bad press.
Denials mean nothing.
mamonster 22 minutes ago [-]
>Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.
I would be very interested to know what he did with the management and performance fees (and how much they were) he gathered over the last 3 years. Just the perf fees from 2025 are probably enough to set him up for life. If he reinvested not so great.
hn_throwaway_99 9 minutes ago [-]
> I would be very interested to know what he did with the management and performance fees
I mean, I'm pretty sure he pocketed the money and got richer. Most hedge fund compensation structure has always (ironically, I'd add, given the name "hedge" fund) incentivized volatility over long term performance.
2PqboPPmKegvanx 36 minutes ago [-]
>Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast
let's be clear here - he didn't actually "lose" a ton of money. he was up 439% net in the first half of 2026.
his issue was getting margin called due to being short on software (which went up) and long on AI infra (which went down) - getting margin called != losing money.
chollida1 15 minutes ago [-]
> let's be clear here - he didn't actually "lose" a ton of money. he was up 439% net in the first half of 2026.
He's down 67% on the month. He most certainly lost alot of money.
He'll be fine and i think he'll be successful at raising more money, and he's still up on the year as far as I've been told by LP's, but he sure did lose alot of money this month.
24 minutes ago [-]
27 minutes ago [-]
uncivilized 29 minutes ago [-]
Yes he lost a ton of money. He went from being up as much as you said to up only 80% and getting liquidated at that point. If it weren’t for Citadel stepping in to buy his investments who knows how much worse it could have gotten.
The only thing you can argue is realized vs unrealized.
RIMR 34 minutes ago [-]
Sounds like someone took huge risks, incurred huge losses, and thought they were entitled to always win. It honestly feels good seeing these folks get knocked down a peg.
vessenes 1 hours ago [-]
This is everywhere. For reference, former FTXer and OpenAIer raised $225m into a hedge fund structure, went long and short, and reportedly peaked at $40bn of value; leverage bit hard this week and they sold their entire-ish portfolio to Citadel at $10bn. (Which, I imagine was very likely aiming at this outcome in their trading in the last few weeks).
Not reported anywhere -- was additional money raised in to the fund, and what is the LP basis? The story might be: wunderkind 40x+ed his first hedge fund and sold it to Citadel, or it might be: wunderkind raised $20bn and turned it into $10bn fast trading against Citadel.
Inquiring minds want to know!
Aboutplants 57 minutes ago [-]
Either way he ended up with enough money for a pardon
drexlspivey 47 minutes ago [-]
Pardon for what? The crime of losing money?
laidoffamazon 8 minutes ago [-]
Anything he wants!
RIMR 27 minutes ago [-]
Believe it or not, you are legally bound to act in the interests of shareholders.
Though you cannot be pardoned from civil stuff, and the options to actually prosecute are pretty slim, so I doubt it.
Though, even if this is just tongue-in-cheek, you can literally buy a pardon in America right now with just a little bit a money into the pockets of the Trump family, in case you didn't get the joke (that the US government is literally pro-corruption right now).
mikestew 18 minutes ago [-]
Believe it or not, you are legally bound to act in the interests of shareholders.
Though a common Internet trope, this is incorrect. However, “legally” or not, you might find yourself unemployed should you ignore the shareholders.
14 minutes ago [-]
2PqboPPmKegvanx 43 minutes ago [-]
what law are you insinuating Aschenbrenner broke?
jghn 41 minutes ago [-]
I say this with absolutely no evidence and only stating it as a hypothetical. But as an example it would be plausible that insider trading was involved.
39 minutes ago [-]
infecto 34 minutes ago [-]
Then why state it?
axus 2 minutes ago [-]
Because Hacker News appreciates discussion of the theoretical, that exceeds the bounds of what mainstream society thought was possible.
2PqboPPmKegvanx 39 minutes ago [-]
trust us, it's quite clear you have no knowledge about the topic you are speaking on.
changoplatanero 58 minutes ago [-]
Say more about how citadel made this happen with their trading?
vessenes 42 minutes ago [-]
To be clear, I'm not claiming Citadel created double digit drops in SK Hynix / Samsung. I am saying that as market vol hits, vol traders might choose to make it worse. And when word hits the street someone has a liquidity position, prop traders WILL come and pressure. SA's filings were clear how concentrated they were, and this was known. In this case, Citadel (hedge fund) bought, while I imagine Citadel Securities would have been doing this (speculated upon) trading. We'll know more when the filings come out though. I'll be curious what of the portfolio they kept and what they worked / rolled in the market
infecto 51 minutes ago [-]
Firms like citadel will run crowding analytics, who owns what, at what leverage and rough margin trigger points. Over simplifying but they could be shorting the longs and going long on the shorts. Everyone generally knew situational was heavily levered.
jvsg_ 41 minutes ago [-]
Citadel spread the rumor that the Fed was going to hike rates this week. This led to Situational Awareness getting margin called on their longs.
energy123 12 minutes ago [-]
That's a meme conspiracy theory on twitter that nobody in the industry takes seriously.
moralestapia 36 minutes ago [-]
Quite similar to CZ and FTX.
moralestapia 37 minutes ago [-]
Wow, so, he narrowly avoided prison while at FTX, then went to work for Scam Altman, now does "investment funds" (a classic trope).
The guy really really really wants to end up in prison, lol.
cmiles8 18 minutes ago [-]
An inexperienced portfolio manager that’s never seen a down tech market in his life has created a massively leveraged position on frothy assets in a bubble and the bubble is looking ill. What could possibly go wrong.
Many of these AI plays are massively entangled and leveraged. It all looks good until it doesn’t and when there’s a hiccup things unravel quickly and exponentially. I fully expect in the next 12 months we’re going to see some rather spectacular investment implosions with folks losing their shirts. Get your popcorn ready.
asats 50 minutes ago [-]
>Even including July's losses, the fund remains up about 80% on the year
Spectacular blowup and a lesson on leverage, but let's not miss this line.
Why are you promoting content by Martin Shkreli? You know, the guy who committed securities fraud to rip off desperate patients?
loco5niner 42 minutes ago [-]
I really don't like this guy, seriously he's a shark (he's probably right, but what a jerk): "If you know somebody has to liquidate, the best thing you have to do, unfortunately, sadly, Darwinian is to go sell all the positions you have in common, then start shorting everything they have. It accelerates the downfall as quickly as you can." of course then he says 'It's nothing I would ever do...'
infecto 40 minutes ago [-]
That’s truly the playbook when you are on the other side of a levered firm though.
loco5niner 31 minutes ago [-]
Yeah, probably. Its too bad.
ymolodtsov 24 minutes ago [-]
If there's any purpose in hedge funds as a structure it's that they provide liquidity for the market. So it's in everyone's best interest to let them do price discovery against each other.
literalAardvark 10 minutes ago [-]
Not really.
Using leverage has risks that you're supposed to understand before you do it.
It's not a free lunch, unless you're putting the sharks' interest ahead of yours. Or clueless, which was the case here, as L.A. is not a trader and has no business running a fund.
infecto 30 minutes ago [-]
Why too bad? This is how the market ultimately comes to the right price.
literalAardvark 31 minutes ago [-]
Because hn is primarily about competence, knowledge and tech, which Martin has in spades.
The arguments against him barely hold water in general anyway.
fred_is_fred 10 minutes ago [-]
A federal jury sure thought they held water.
literalAardvark 2 minutes ago [-]
Martin was convicted on three counts of securities fraud. The TL;DR is he was shilling a successful fund while sitting on massive losses. A Madoff kinda thing.
This has nothing to do with what people actually hate him for, and for which he was not convicted, because extracting money from a captive clientele is exactly what the US healthcare system is designed to do.
eigenspace 17 minutes ago [-]
lmao
baggachipz 17 minutes ago [-]
He's an absolute ghoul, and to see sibling comments praising him breaks my heart. Yeah, he "did his time", but he also took advantage of sick people for immense profit. You don't get a pass for that.
gessha 44 minutes ago [-]
You can still learn from thieves and crooks. Especially if they break down what they did and how they did it.
dgellow 36 minutes ago [-]
Just keep in mind you might be the mark of his current scheme
rib3ye 44 minutes ago [-]
He has done more for wallstreet-to-mainstreet transparency than you believe.
His investor literacy youtube backlog is unusually deep and as of yet has only shilled his own trading product.
But your point is valid, he will never live down the fraud conviction and his face is so punchable.
dgellow 37 minutes ago [-]
The shady crypto projects he did after his release are also good reasons to distrust the guy
40 minutes ago [-]
WarmWash 47 minutes ago [-]
Like black hats getting cyber sec jobs, they probably know a thing or two.
jakevoytko 45 minutes ago [-]
If you’re gonna be a hater you at least gotta do it right! The pricing and the securities fraud were two separate things you can count against him.
infecto 44 minutes ago [-]
He is one of the few folks in finance who regularly streams and is directionally interesting. He served his time.
r_lee 45 minutes ago [-]
I don't think those two cases are related
he's a relatively well known figure in finance and pharma investing
jvuygbbkuurx 41 minutes ago [-]
He has served his time for those crimes
petesergeant 45 minutes ago [-]
Because he’s an expert.
Edit: I don't do podcasts but this is absolutely worth some of your time to watch.
ForHackernews 48 minutes ago [-]
seems like someone who is knowledgeable about financial shenanigans
zetanor 44 minutes ago [-]
Can you provide a comparable or superior analysis by someone else?
foltik 20 minutes ago [-]
Where do I sign up to get $100M to dump into long AI positions?
francisofascii 38 minutes ago [-]
Which AI stocks suffered a rout?
marcosdumay 7 minutes ago [-]
SPCX is getting lower and lower, MSFT is currently down 15% in an year, Oracle is close to 50% YoY...
redwood 31 minutes ago [-]
Incredible that the founder is engaged to be wed this very weekend to the chief of staff to Anthropic's CEO
next_xibalba 5 minutes ago [-]
And yet:
> Despite the July losses, Situational Awareness remains up about 80% on the year and holds a portfolio of investments in private companies including Anthropic.
80% return (YTD) is the type of performance for which many hedge fund managers would sacrifice their first born.
40 minutes ago [-]
boringg 1 hours ago [-]
Yesterdays news. High leverage. Sounds like citadel got a deal.
liquid153 6 minutes ago [-]
[dead]
iluvcommunism 37 minutes ago [-]
[dead]
dogmayor 56 minutes ago [-]
Shocking to see a highly levered and highly concentrated fund blow out /s
Ironically, I would describe this selloff as an increase in situational awareness.
4 years ago, it was SBF blaming Changpeng Zhao for shorting FTT and triggering a run on FTX.
Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.
Denials mean nothing.
I would be very interested to know what he did with the management and performance fees (and how much they were) he gathered over the last 3 years. Just the perf fees from 2025 are probably enough to set him up for life. If he reinvested not so great.
I mean, I'm pretty sure he pocketed the money and got richer. Most hedge fund compensation structure has always (ironically, I'd add, given the name "hedge" fund) incentivized volatility over long term performance.
let's be clear here - he didn't actually "lose" a ton of money. he was up 439% net in the first half of 2026.
his issue was getting margin called due to being short on software (which went up) and long on AI infra (which went down) - getting margin called != losing money.
He's down 67% on the month. He most certainly lost alot of money.
He'll be fine and i think he'll be successful at raising more money, and he's still up on the year as far as I've been told by LP's, but he sure did lose alot of money this month.
The only thing you can argue is realized vs unrealized.
Not reported anywhere -- was additional money raised in to the fund, and what is the LP basis? The story might be: wunderkind 40x+ed his first hedge fund and sold it to Citadel, or it might be: wunderkind raised $20bn and turned it into $10bn fast trading against Citadel.
Inquiring minds want to know!
Though you cannot be pardoned from civil stuff, and the options to actually prosecute are pretty slim, so I doubt it.
Though, even if this is just tongue-in-cheek, you can literally buy a pardon in America right now with just a little bit a money into the pockets of the Trump family, in case you didn't get the joke (that the US government is literally pro-corruption right now).
Though a common Internet trope, this is incorrect. However, “legally” or not, you might find yourself unemployed should you ignore the shareholders.
The guy really really really wants to end up in prison, lol.
Many of these AI plays are massively entangled and leveraged. It all looks good until it doesn’t and when there’s a hiccup things unravel quickly and exponentially. I fully expect in the next 12 months we’re going to see some rather spectacular investment implosions with folks losing their shirts. Get your popcorn ready.
Spectacular blowup and a lesson on leverage, but let's not miss this line.
His thesis was correct. The problem is, his thesis was measured in years if not decades when his funding was measured in days and hours.
Using leverage has risks that you're supposed to understand before you do it.
It's not a free lunch, unless you're putting the sharks' interest ahead of yours. Or clueless, which was the case here, as L.A. is not a trader and has no business running a fund.
The arguments against him barely hold water in general anyway.
This has nothing to do with what people actually hate him for, and for which he was not convicted, because extracting money from a captive clientele is exactly what the US healthcare system is designed to do.
His investor literacy youtube backlog is unusually deep and as of yet has only shilled his own trading product.
But your point is valid, he will never live down the fraud conviction and his face is so punchable.
he's a relatively well known figure in finance and pharma investing
Edit: I don't do podcasts but this is absolutely worth some of your time to watch.
> Despite the July losses, Situational Awareness remains up about 80% on the year and holds a portfolio of investments in private companies including Anthropic.
80% return (YTD) is the type of performance for which many hedge fund managers would sacrifice their first born.