"Too many are focused on the falling cost of tokens"

1. Interest rate expectations. "The Fed's hawkish tone has cut through to households - the U. Mich survey shows the proportion expecting interest rates to rise over the next 12 months jumped to 53% in August—the highest since November 2023—from 44% in July."

2. Hedge funds vs. bonds. "Hedge funds have been loading up on long-term treasuries. More often than not, they lived to regret it."

3. Risk-on vs. risk-off. "Using @Google Search Trends, investor interest in 'risk-on' terms has significantly outpaced 'risk-off' terms".

4. SPX vs. SVIX. "We expect SVIX to generally move in the same direction as SPX (stocks up and vol down = gain for short vol) ... the past few weeks has been off-script more than we would expect ... Let's assume that this variation from the norm is statistically significant. My conclusion would be that this market can't be trusted and we should be extra vigilant for more serious misbehavior."

5. Frontier vs. open source cost. "Too many are focused on the falling cost of tokens and assume OS models are 'cheaper' than the frontier. But, many open source models use tokens inefficiently. The better way to judge model economics is cost per task. On that basis, we see K3 as ~25% more expensive vs frontier".

ICYMI