"After a Magnitude-7 Earthquake, Aftershocks Are Certain"? Hedge Funds Hit Again Wednesday After July's AI Losses

Goldman Sachs data shows systematic long-short funds fell 1.4% in a single day on Wednesday, while Morgan Stanley's "Pure Momentum" index posted its first daily drop of over 4% in five years. The triggers were the U.S. Treasury's expanded bond purchases and a surge in Moderna's stock. Industry insiders liken the current predicament to "a magnitude-7 earthquake inevitably followed by aftershocks," as all parties deleverage simultaneously, reducing risk exposure and amplifying market volatility, creating a negative feedback loop.