Jimmy Nyström

The largest de-grossing event in a decade, and we watched it happen live. Morgan Stanley’s prime data puts October’s long/short gross-flow drawdown at -7.8% from peak, the biggest since the series began in 2016. Bigger than 2021. Bigger than Covid. At Nowcast IQ we did not need the data to tell us. We work with many of the largest hedge funds globally, and we saw it in the chats: team after team going quiet as drawdown limits tripped, more than a hundred macro PMs out in a single month. A de-grossing sells what it owns regardless of what it is worth. That is what October was. Here is the part I am proud of. Through all of it, the data held. The growth nowcast bottomed at 19% in late September and turned before the market did. It is 34% today. The inflation breadth measure fell while the headline rose, which is why we said the hiking cycle would be benign before Warsh and the ECB said it themselves. The liquidity indicators flagged the plumbing tightening in August, two months before the repo market priced it. And the AI data, Korea’s exports, the rent on a GPU, the Anthropic numbers, pointed up the whole way down. Positioning was wrong. The data was not. If you want the same dashboard the funds use, we are running a campaign at Nowcast IQ this month: 30% off the first year for new subscribers, with the full regime model, the daily growth, inflation and liquidity probabilities for the US, Euro zone, UK, China and India, and the weekly positioning read. The next de-grossing will come. Better to see it on the way in.