Hedgie

🦔The math works. FRED has US bank deposits at about $19 trillion and money market funds at about $8 trillion. That’s roughly $27 trillion combined, which against a $69 trillion S&P gives you a ratio around 0.39 to 0.42 depending on the date. It is a lot of money in absolute terms. The chart’s point is that the ratio used to be around 2.0 during the financial crisis. So relative to how large the market has become, there’s proportionally less cash available to absorb a selloff than there has been in 25 years.

@HedgieMarkets 0.42 * $70T = $30T. That's hell of a lot of money. I doubt that number is correct.

🦔Bloomberg data shows total US cash (money market funds plus bank deposits) as a percentage of S&P 500 market cap has fallen to 0.42. That is near the lowest level ever recorded, matching where it sat right before the dot-com crash. Money market funds are at a record $7.95 trillion in absolute dollars, but the S&P 500's market cap has ballooned to roughly $69 trillion. The cash pile looks massive until you measure it against how big the market has gotten. There is less dry powder available to catch a selloff, relative to market size, than at almost any point in modern history. My Take I think this is one of those charts people will point to after the fact. $7.95 trillion in money markets sounds like a wall of cash ready to buy any dip. But at a 0.42 ratio to S&P market cap, it's thinner than it was before the dot-com bust. Households have 45.8% of their financial assets in equities (Q1 2026 Fed data), the personal savings rate is around 3%, and retail investors are buying every single dip with record options volume. Citadel's own H1 2026 report says retail bought 3.5x their average daily amount on every down day this year. The "cash on the sidelines" story is how everyone explains why dips keep getting bought. And in absolute dollars it looks true. But relative to how large the market has become, the available cash to absorb a real selloff is about where it was in 1999. I'm not calling a crash. I'm saying the cushion is a lot thinner than the headline number makes it look. Hedgie🤗

@QT111119 🦔Good catch on the math, but the Bloomberg chart is measuring something slightly different. It's money market funds plus bank deposit balances divided by SPX market cap, not money markets alone. That's how you get to the 0.42 ratio.

@HedgieMarkets Your math isn't math-ing. SP500 market cap == $70T. If money markets are at $8T, then it is only 12%.

@thebillyboone 🦔And it hides itself as "Browser" in Task Manager so you can't easily tell which one is eating your RAM. You can't make this stuff up.

@HedgieMarkets an AI assistant that needs its own browser to help you use your browser.

🦔Microsoft's Windows 11 Copilot can now tell you what's slowing down your PC. Copilot itself uses up to 1GB of RAM while idle, ships with its own private copy of Microsoft Edge inside the app, and identifies as "Browser" in Task Manager. Microsoft says you should ask Copilot about your system performance instead of opening Task Manager. My Take A 1GB background process that ships its own hidden browser is going to diagnose your performance problems. I laughed. The resource cost of running Copilot is probably larger than most of the problems it would find. Microsoft rebuilt Copilot as a native Windows app, it worked well, and then after an internal reorg they scrapped it and went back to a web app with a full Chromium instance baked in. The company can't get out of its own way. Task Manager already does this job. It's free, it's lightweight, and it tells you exactly what's eating your resources. The only reason to replace it with an AI assistant is if your company's success metrics are built around Copilot adoption and not around whether the user's PC actually runs better. Hedgie🤗

@empyriangaming 🦔If those contracts lock in elevated pricing through 2028 or 2029, it won't matter how much new capacity comes online.

@HedgieMarkets CXMT can’t even serve domestic supply. All 3 memory makers are sold out with LTAs which include price floors. This doesn’t even include the humanoid robotics ramp.

🦔SK Hynix's CEO announced that memory shortages will be the worst in history by 2027 and won't ease until 2030. He said this on the same day his company listed on Nasdaq and raised $26.5 billion. HBM chips for AI accelerators consume more wafer capacity than consumer DDR5, and both SK Hynix and Micron have been locking in long-term supply agreements that commit years of production to specific buyers at preset price floors. My Take A CEO announcing a years-long shortage on the same day his company goes public is a sales pitch with a concerned face on it. He's telling investors that pricing power is locked in through the end of the decade. Micron's stock is up 213% this year. SK Hynix just raised $26.5 billion. I'd be shocked if either company wanted the shortage to end before they've finished milking it. HBM production is cannibalizing DDR5 wafer capacity right now. Memory makers would rather sell fewer chips at higher margins to hyperscalers than more chips at lower margins to you. They've made a business decision and dressed it up as an inevitability. TrendForce already shows price increases slowing. Chinese manufacturers are building DRAM capacity that will come online over the next few years. The 2030 timeline conveniently ignores both of those. Hedgie🤗

@giappopazzie 🦔Chinese DRAM manufacturers are building capacity but they're years behind on HBM. Affordable DDR5 is possible. Affordable HBM is a longer wait.

@HedgieMarkets venture capital AI used a huge amount of money they did not had in the first place to buy components at prices nobody sane would pay. All on the premise we are going to pay them back, all while ruining the consumers access to technology. I hope chinese will make affordable DDR5.

@Pdxgtr_35 🦔IPO day shortage warnings should come with a conflict of interest disclosure.

@HedgieMarkets Ignore most anything that lends itself as inside information right when someone is selling something related to said insider information

@thebillyboone 🦔That's already happening. DDR5 prices are up 15-18% quarter over quarter and HBM is the reason.

@HedgieMarkets enjoy paying more for your next laptop so AI can have the memory instead.

@poptrot 🦔If you can hold through a 40% drawdown without panic selling, 100% equities at 56 is fine. Most people find out they can't the hard way, which is why I include the bond allocation.

@HedgieMarkets I agree with everything here except the stock/bond mix. There is no way a 45 year old should be 35% bonds. That’s leaving way too much returns on the table. I’m 56 and my 401 is still 100% equities

@edandersen 🦔The S&P 500 has returned about 7% real over every 30-year window going back to 1926, including windows that started in 1929 and 2000.

@HedgieMarkets 7% for 30 years is not going to happen

@ReiteConMig0 🦔Appreciate the visual!

@HedgieMarkets Apple vs OpenAI: A Courtroom Battle

🦔Apple is suing OpenAI for systematic trade secret theft weeks before the IPO. The complaint alleges a former Apple engineer exploited a bug to access Apple's cloud storage while employed at OpenAI and laughed about it in a text message. Tang Tan, now OpenAI's chief hardware officer, allegedly used Apple codenames in interviews to extract confidential information from current employees and circulated an internal Apple offboarding doc to teach new hires how to dodge exit security. Over 400 former Apple employees now work at OpenAI. My Take If even half of this complaint holds up, OpenAI's hardware plans are finished. You can't ship a device when a court has ruled your team and supply chain were built on stolen IP. Apple has more cash than most countries and a legal team that treats intellectual property enforcement like a religion. This is about the worst opponent OpenAI could have drawn right before asking public markets for money. The bigger problem is what this says about the company. Apple isn't describing one rogue employee. They're describing a senior hire who allegedly coached recruits on bypassing exit security and an engineer who treated accessing his former employer's files like a joke. If you're sending proprietary data through OpenAI's API, this filing should be on your reading list. Hedgie🤗

@FearAndMadnUS 🦔Yeah, that's the part of the complaint that should worry OpenAI the most. This wasn't one engineer sneaking files. The allegation is that a senior hire built a system around it, down to circulating offboarding docs so new recruits knew how to avoid getting caught.

@HedgieMarkets This says a lot about OpenAI senior management. Top software companies have been detecting and stopping IP theft or NDA violations by new employees for decades.

@poeticinformed @SpuriousSpelunk 🦔Tough to argue with that. Filing a trade secret suit right before the IPO is about as much pressure as Apple can apply without saying a word publicly.

@HedgieMarkets @SpuriousSpelunk This bad news couldn't happen to a more deserving company. In fact, they probably deserve worse.

@hidflect 🦔At some point the pattern stops being bad luck and starts being the business model.

@HedgieMarkets Scam Altman leaves an endless trail of furious colleagues and investors in his wake...

@eyekwasi 🦔I think that's where this ends up landing for a lot of companies. The complaint doesn't describe a one-time lapse. It describes a culture. If that's how they handled Apple's IP, the question every API customer should be asking is how they handle yours.

@HedgieMarkets This is going to be a bitter lesson for the industry. I don't think any company having proprietary data should be using OpenAI or Anthropic API. Trust the AI labs at your own peril.

@psychprofits 🦔Apple doesn't need to bankrupt them directly. They just need discovery to go wide enough that every potential investor starts asking what else was taken from other companies.

@HedgieMarkets May this hasten Open AI’s bankruptcy! 🤞 Godspeed Apple 👏

@jaycansea 🦔Haha, I wouldn't hold my breath on both at once. Meta prints money from ads regardless of what happens with AI. OpenAI is the one running on fumes and fundraising.

@HedgieMarkets The world would heal a bit if both meta and OpenAI went under around the same time.