I don't understand the point of this piece. There is nothing breaking or remotely interesting which we didn't already know.

Mind you I don't particularly care about Aschenbrenner or his fund but it feels to me like typical journalists reporting on hindsight without any sort of skin in the game. "Hhm, how could you be so dumb so as to trust your money to a 22 year old".

Peter Thiel did the same with Zuck and like him or hate him he did pretty well.

If you want to show how smart you are hash your predictions, post them publicly with a commitment to reveal by a certain date and then show the world how this was so obvious in hindsight.

> don't understand the point of this piece

>> What, then, to make of Situational Awareness’s plunge? ...Mr Aschenbrenner was hardly alone in such bets; over 80% of fund managers responding to Bank of America’s latest monthly survey named “long global semiconductors” as the most crowded trade. The big worry is that this trade’s whiplash-inducing reversal will have set other investment firms teetering, too.

If Citadel hadn't stepped in, Situational Awareness may have had to fire sell tens of billions of dollars of assets. Assets others have leveraged positions in. That, in turn, could have triggered margin calls and a potential credit or even bank crisis.

Is this firm big enough to cause a financial crisis on its own? Has the leverage situation gotten so dire? Is this just postponing the inevitable at this point?

> I don't understand the point of this piece. There is nothing breaking or remotely interesting which we didn't already know.

The piece is published in a weekly magazine. It may include some interesting things that nobody knew one week ago.

> He reported returns of 439% for the first half of 2026

> which posted a loss of 67% in July

So it's still up 44% this year? The article notes this, but seems unnecessarily adversarial against an investor who is still wildly successful.

> it's still up 44% this year?

Devil is in the details of what Citadel paid for its positions, whether there are any performance tails/clawbacks, how and when the GP charges fees, et cetera.

Aschenbrenner is almost certainly up. I'd be surprised if his median LP is breaking even.

yeah, especially given that the bulk of that is supposedly Anthropic which is just paper gains that could evaporate when traded publicly. everyone's a genius in a bull market, my fund is up 145% ytd after the big 50% drawdown this June.

From everything I read it seems that they're only up on the Anthropic stock and that doesn't account for newer clients who invested later.

The same goes for all reporting on YouTube. Many publishers jumpers the gun without looking at context.

It's also interesting that Citadel is mentioned everywhere as the buyer, as if it's strange that a huge market maker firm would be involved in a large forced sale.

Seems the fund also has Anthropic shares, so it's not like their entire portfolio got margin called.

> By July this year he was said to be overseeing as much as $45bn

Does anyone know if this refers to AUM or the gross size of his positions after leverage?

AUM.

Oversee: to be in charge of how an amount of money is invested or spent.

> Oversee: to be in charge of how an amount of money is invested or spent

No. "Oversee" can refer to the gross or net position. If I raise $10bn and use that to buy $100bn in assets, I absolutely control and thus oversee the latter.

Whatever.

The discourse on this is way too clearly schadenfreude. He's still up significantly YTD.

I'm not sure what the outrage is. It's still up pretty good for the year, but if you brought at the top, like any stock, you'd lose your shorts.

> this failure wasn't all that special

>> people who will lose money investing in this fund are the type of people who have a full wardrobe

If Citadel hadn't bailed him out, Situational Awareness very likely could have triggered a cascade of fire sales. That would not only hurt ordinary investors' positions, it could have also triggered a credit or even banking crisis (depending on how the margin loans are held).

A big, leveraged, concentrated fund blowing up isn't novel. But it's the traditional way to start a recession.

It is just the most visible “close call”. Most of the time we don’t hear about these incidents until they blow up, that is if we hear at all.

But there was no "close call". His fund was not systemically important. It was mostly public equity investments in some of the largest names in the market that were highly leveraged.

This piece is smug, ageist, and clueless. It is building its bad argument upon the opposite of what the data show. I am surprised they printed it.

I don't like Aschenbrenner's type, personally. He was an arrogant little puke when he wrote the original mega-essay, and an arrogant little puke when he started this fund with the same presumptuous name. But he does his homework, and he has made his investors quite rich. The only sad investors would be anyone who just got into SALP this month, and they got what was coming to them for crowding into these trades so late in the game.

What's more, Aschenbrenner got himself out of this sticky spot in time to avoid total catastrophe. He gets credit for that, and so do his PBs for keeping a watchful eye and margin calling him in time. At least some of the adults here knew how to supervise.

In retrospect, it would have been good to have people inside the fund who knew more about market tactics, not just forecasting the AI tech tree, but he has now learned that lesson without too much damage.

And even if he had gone bust, it would have been a step forward, teaching his fellow EAs that it's possible to blow up a fund without doing crimes. Small steps!

Read the bio. Found it (emphasis mine):

> While at Columbia, he co-founded the university's effective altruism (EA) chapter.[5]

Just another smart, yet ethically challenged, individual. Nothing to see here.

why does involvement with EA imply being ethically challenged? i’m personally not involved, but on its face it seems better than not doing any kind of charitable work.

> why does involvement with EA imply being ethically challenged?

Because almost everyone prominent in the movement has had some combination of lack of judgment and morals. There various terms for rationally pursuing philanthropy; associating with effective altruism involves embracing its ideas, people and culture.

And yet they do more good than the moral critics do.

Moral critics save a lot of lives by not doing. Sometimes not doing is the best moral option ex. I will not kill or I will not exploit.

And it does not come cheap. Someone who says "I will not work for Facebook" is taking a stand at the expense of significant personal gain.

> yet they do more good than the moral critics do

Going to need a good source for that crowd having done more good than the frauds of even just their most-notorious members.

Masquerading as an altruist to justify massive management fees for running a fund of concentrated, leveraged positions is one of the oldest lipsticks on financial pigs.

1) What

How is he ethically challenged? This looks like an accusation that doesn't have merit

As per the article, he formed a trading company without any background in investing, and once his investments tanked, he sold the stocks for pennies on the dollar to a financial firm, leaving investors holding the bag while pocketing trading fees associated with a $45B USD portfolio.

How is effective altruism related? I skimmed their wiki page [1], but didn't find anything endorsing such actions.

[1] https://en.wikipedia.org/wiki/Effective_altruism

No, but to most people the only exposure they've had to the term "Effective Altruism" (if they've even heard of the it) is morality-washing personal greed that never quite seems to get past the "accumulation" or "self-serving boondoggle" stages.

As a brand it's tainted. You might argue unfairly, but that's never mattered in "public brand perception" before.

Sam Bankman-Fried is an effective altruist (or was anyways, not sure what he is after they denounced him). The list of effective altruists reads like a who's who of scummy people.

https://www.wired.com/story/deaths-of-effective-altruism/

Effective Altruism is one of those things that sounds smart on the surface, but in practice is a yellow flag. The fact that he started the club is a red flag.

In short, Effective Altruism says you don't engage in charity until you have sufficient means to actually make a difference. Basically, you leverage capitalism to accumulate enough wealth to actually be able to solve a big problem, then you go all in on solving that problem. Sounds great right?

In the real world these people never accumulate enough wealth to actually start solving problems. Even when they become billionaires. In practice it is a convenient excuse to act like the most depraved capitalist while still pretending to sit on the high horse and talk down to people who simply try to help with the means available to them.

I have a lot of problems with Aschenbrenner and the "Rationalist" community as a whole, but this is not a factually correct characterization of Effective Altruism.

"Giving What We Can" pledge is to give 10% of your income to charity.

can you support those claims?

It’s the “tractability” part of the ITN framework: https://forum.effectivealtruism.org/topics/itn-framework

In practice, it can be used as a fully-general counterargument to supporting most charities, since decisively and completely solving problems in this space is rare. It’s harder to split a problem into component parts than it is to throw up one’s hands and say, “well, this isn’t tractable.”

One has to only look at the actual participants to find ample examples:

https://www.youtube.com/watch?v=rQZWMmINqxo

https://www.youtube.com/watch?v=S54GrXDjokg

https://www.thephilosopher1923.org/post/a-mirror-for-tech-br...

https://www.persuasion.community/p/the-problem-with-effectiv...