Here are six chart-driven ideas to think about this weekend:
- New data shows AI has made hedge funds the most crowded in history
- Less-educated young men are stagnating worldwide, just as AI comes after them
- The insurance market is getting smashed by climate risk, which AI is accelerating
- If AI tokens are so cheap, why are compute prices so high
- Iran spirals into 70%+ inflation and its cyber consequences
- The dead Internet theory was optimistic
1. Hedge funds are one big & crowded AI trade
- What it says:
- Goldman Sachs' hedge-fund VIP basket is almost perfectly correlated with AI, semiconductors, and memory.
- Optical, power, cooling, and grid stocks are close behind.
- Goldman's latest crowding index is at a record 3.8%, the highest in its 20-year history
- Why it matters:
- Apparent portfolio diversification is mostly the same capex cycle in differently colored wrappers.
- When AI infrastructure turns, crowding will make clear that chips, power equipment, memory and cooling were one position all along.
- We got a taste of this with the Situational Awareness mess
2. The collapse of less-educated young men
- What it says:
- The earnings rank of young men without higher education has fallen sharply across the US, UK, Belgium and Germany.
- It is the only demographic group whose economic position is both low and still deteriorating.
- Why it matters:
- This is a developed-world labor-market failure, not an American cultural curiosity.
- Persistent loss of income, employment, and status among young men is combustible political material.
- Telling them the aggregate economy is healthy only makes the politics worse.
- And now AI is coming for trucking, the largest employer in this declining cohort.
3. Climate risk reaches the insurance market
- What it says:
- Home insurance non-renewals rose across much of California, Florida, the Gulf Coast, and other high-risk areas between 2018 and 2023.
- The pattern is uneven, but the retreat is national.
- Why it matters: