AI is selling off huge, been consistently selling since the FT article on OpenAI's revenue being $50b, not $70b.

CPI came in very slightly hot yesterday, and money managers took it as an excuse for at least profit taking, if not dumping AI altogether.... we don't know which.

But we DO know that AI buildout spending is no longer coming out of free cash flow, and coming largely from debt issuance. Which puts lots of pressure on bond yields as they compete with other corporate and even gov't borrowers. But if desire to keep this shell game going dries up... so does that borrowing. Which eases the immense pressure on bond yields right now.

Which is good for every borrower that ISN'T balls-deep in AI. Including small caps... shorting which is my single biggest position at the moment.

Now if this is "The Big One", then getting out of the small cap short would be the smart play, because rates are going to continue dropping as AI enthusiasm (and need for AI companies to issue more debt) crashes , giving great relief to small caps via reduced interest expense.

But if it's just a temporary rotation, and short rates are going to keep rising, as constantly hot inflation reads say they should, shorting small caps is still perfectly valid.

I suspect it's the big one, but fuck do I know? So I'll even out, and re-evaluate in a couple days, see what shakes out.

So I'm switching my short allocation (roughly 20% of the portfolio) here from 80% IWM, 15% QQQ 5% EFA (EU zone) to 47/47/5.