Can AI Be Both Power-Starved And Oversupplied? Goldman's Privorotsky Picks His Bear Case As Hedge Fund Nets Hit 5-Year Lows

The post-midterm "blue tsunami" rally lasted exactly 24 hours.

Then the hedge funds headed for the exits... all at once. According to Goldman's head of EMEA Delta One trading Rich Privorotsky, last week brought "extraordinary de-risking," with US fundamental long/short funds delivering the largest weekly cut in gross leverage since Covid and the biggest cut in net since Liberation Day. In his Monday morning note ("Scarcity vs Returns. Defense. US Fundamental Cut.", available to pro subs), he offers the cleanest one-line explanation of the carnage we have seen so far:

"Largest Put Volume Day On Record"