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Situational Awareness's collapse is revealing record levels of stock market leverage

Hedge funds had borrowed nearly $3.7 trillion from banks as of midyear, the highest amount in more than a decade, according to the Treasury Department

Credit: Leopold Aschenbrenner / LinkedIn

Situational Awareness, the AI-focused hedge fund that nearly collapsed this summer, is drawing fresh scrutiny to record levels of borrowed money in stock markets, according to The New York Times. By midyear, hedge fund borrowing from banks had reached nearly $3.7 trillion — a figure the Treasury Department says is the largest in over a decade and roughly three times the level recorded when the pandemic began in 2020.

According to The New York Times, Leopold Aschenbrenner — who had never worked at an investment firm before founding the........

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