Magnetar Capital, CoreWeave, Inc. CRWV -6.03%↓ largest institutional backer, faced major controversy for its role in the 2008 financial crisis through a strategy dubbed the “Magnetar Trade.” The hedge fund allegedly helped create and finance risky Collateralized Debt Obligations (CDOs) while simultaneously betting that these same investments would collapse.

The Magnetar Trade generated significant backlash and media scrutiny, most notably through an investigative series by ProPublica. Critics accused Magnetar of intentionally encouraging investment banks to bundle the riskiest, lowest-quality subprime mortgages into CDOs. 

Because Magnetar had protected itself against losses by purchasing credit default swaps, it stood to make massive profits when the housing market inevitably crashed and the CDOs became worthless:

“ In late 2005, the booming U.S. housing market seemed to be slowing. The Federal Reserve had begun raising interest rates. Subprime mortgage company shares were falling. Investors began to balk at buying complex mortgage securities. The housing bubble, which had propelled a historic growth in home prices, seemed poised to deflate. And if it had, the great financial crisis of 2008, which produced the Great Recession of 2008-09, might have come sooner and been less severe.

At just that moment, a few savvy financial engineers at a suburban Chicago hedge fund helped revive the Wall Street money machine, spawning billions of dollars of securities ultimately backed by home mortgages.

When the crash came, nearly all of these securities became worthless, a loss of an estimated $40 billion paid by investors, the investment banks who helped bring them into the world, and, eventually, American taxpayers.

Yet the hedge fund, named Magnetar for the super-magnetic field created by the last moments of a dying star, earned outsized returns in the year the financial crisis began.

How Magnetar pulled this off is one of the untold stories of the meltdown. Only a small group of Wall Street insiders was privy to what became known as the Magnetar Trade.”

The Magnetar connection is a serious red flag that ought to be a major issue of concern for potential investors.

New and learning here. The AIS ETF dropped from 88 to 74 in less than two weeks. Is this is the AI bubble bursting everybody has been warning about? If not, what is it?

Thank you for your answers!

A few years ago, I started trading with a relatively small amount of money. I didn’t come from a finance background, and I made a lot of mistakes early on.

Over time, I got curious and decided to check the Dark Web to see if there was anything related to trading. There was. It was an ins. trading website, literally. There were people there who sold their information.

At first, I thought it was a scam. But I decided to give it a shot anyway. It seemed too good to be true. I paid $6,000 for the first piece of information, and it worked. I was shocked. 5x profit.

The rest is obvious. And NO, I won’t sell information.

I’m here to answer your questions.

Ask me anything.

Basically, I want to test out my entry and exit points, indicators and strike prices before I do it for real. I kmow I can use paper trading when the markets open but I want to train when the markets closed as well.

Rumors on Wall Street that the orange man liquidated all his MU today and that Micron is filing for bankruptcy. I just sold my 200 shares at $960. Cost basis $374. Pyramid scam. Will MU bottom out under $100 on Monday?

https://preview.redd.it/dosf96p8bvah1.png?width=1272&format=png&auto=webp&s=72c0e661cd1215984da6a09e7ab9f9a0d2618fd7

Software stocks will rise following the news of Meta launching its own "Meta Compute" cloud business because the move directly promises to lower the cost of AI computing power, making it far cheaper for software companies to build and run AI applications.

When Meta enters the market to sell its excess raw AI computing capacity, it creates a massive "supply shock."

1. Drastically Lower AI Operating Costs

Software companies have faced massive bills from big cloud providers to rent the GPUs needed to build, train, and run AI software. By entering the market with its massive, state-of-the-art infrastructure, Meta creates intense price competition. This forces general GPU renting prices down, allowing software developers to save millions on computing costs and immediately improve their profit margins.

2. Elimination of a Major "Tech Bottleneck"

Up until now, software companies faced hardware bottlenecks and long waitlists to get access to top-tier AI chips. Meta has spent an estimated $125 billion to $145 billion on AI infrastructure. Opening up this massive pool of computing power gives software creators immediate, flexible access to hardware, speeding up their software development cycles.

3. Relief from "AI is Eating Software" Fears

For the past year, Wall Street worried that massive tech giants (hyperscalers) were hoarding all the AI computing power and profits, leaving traditional software companies out in the cold. When Meta announced it would sell raw compute and "Model-as-a-Service" options, it leveled the playing field. Software companies can now leverage Meta's infrastructure to build their own advanced tools without having to build their own multi-billion-dollar data centers.

The Contrast: Who Lost?

While software companies and Meta Platforms (META) stock rallied, the entities that actually sell hardware or existing cloud space fell sharply.

• Neocloud providers like CoreWeave (CRWV) dropped 14% and Nebius Group (NBIS) dropped 17% because they suddenly faced a multi-trillion-dollar competitor.
• Hardware/Chip providers like Nvidia and Super Micro Computer took a hit over fears that Meta's commercial push meant the market was reaching peak infrastructure overbuild.

So as you can read from the Header that AI is now everybody's go to tool to get through 10-K and so every time I do this I always reverify the data and questions I asked because let's be honest AI is good but not perfect and it does hallucinates numbers pretty much once I started noticing it is quite obvious so I ask it to give me the citations and then the page number is incorrect or the paragraph is off or the AI just couldn't corelate data and don't get me started on the tables part. Drop down your frustrations and solutions

I keep hearing there is a new paradigm with chip stocks. Their yearly cyclicality has finally ended. Micron, Seagate, Western Digital, Sandisk are taking orders up the 'wazoo'. They cannot keep up with the momentum. Why then hasn't the sector noticed? These things should be trading like 'utilities' but are behaving erratically.