George Hahn connects the dots across the week’s biggest stories: how leverage brought down one of the hottest AI hedge funds, why South Korea’s market crash offers a warning for American investors, and what Sam Harris teaches us about attention, anxiety, and the pursuit of happiness.
00:48 - The Golden Age of Fraud
01:33 - The CapEx Accounting Mismatch Behind Soaring S&P Profits
02:52 - AI Jesus's Overnight Collapse
04:04 - South Korea's Leverage Crisis and Its Human Cost
06:32 - Ad Break
09:15 - Loneliness, Leverage, and Financial Nihilism
10:31 - The Death of Boredom
12:04 - You Can't Beco...
What George Hahn said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
George Hahn reported on the collapse of 24-year-old Leopold Aschenbrenner's fund Situational Awareness, which was up 439% for the first half of the year at roughly $45 billion before a fire sale of most of its public stock portfolio to Ken Griffin's Citadel, leaving about $10 billion. Hahn highlighted Jim Chanos's view that the accounting mismatch in capex booms inflates S&P profits. He covered South Korea's stock market falling 44% from June highs, $2 trillion lost, driven by single-stock leveraged ETFs launched in May, with Scott Galloway noting 92% retail participation and 3.4% of adults receiving margin calls. Hahn connected this to financial nihilism among young people, citing Ed's points on declining marriage rates and fertility. He concluded with Sam Harris's argument that happiness is found in the present, not via future gains.
Key takeaways
Situational Awareness's $45 billion fund collapsed after a margin call forced liquidation of its public stock portfolio to Citadel.
South Korea's market fell 44% from June highs, erasing $2 trillion, due to single-stock leveraged ETFs.
92% of South Korean leveraged ETF investors were retail, and 3.4% of adults got margin calls.
Chanos said capex booms involve a mismatch where spending companies capitalize costs while suppliers book immediate profits.
Sam Harris argued that boredom is an illusion and happiness can only be achieved in the present.
3:36And literally overnight, the whole thing has collapsed. And what is it?
11:32Why are all these young people flinging their money into these leveraged ETFs and then praying that the stock goes to the moon and then being upset when it crashes to the ground?
13:04I mean, I'm not advocating boredom in principle as a good experience, but what it used to allow many of us to discover is that there's something on the other side of boredom, right?
15:03It's actually developing a capacity to be more and more present so that you kind of equalize your moments, where it's like even if you're just stuck in traffic, you can locate a depth of well-being that makes that not a problem, right?
Welcome to The Week from PropG Media, where we break down what mattered and what it all means. I'm George Hahn, and it's Friday, August 7th. Today, a hedge fund blew up, South Korea's stock market plunged 44%, and the AI trade found its floor. Then, why a generation locked out of financial security is taking bigger risks to get ahead. And finally, Sam Harris on what's actually worth your attention. Let's get into it.
Last week, the debt that was propping up the AI boom finally came into view. This week, we found out what it does to people. On Friday's PropG Markets, Scott and Ed sat down with Jim Chanos, the short seller who called Enron and who now teaches a course on the history of financial fraud.
The fraud cycle follows the financial cycle with a lag. And the longer the financial cycle goes on, the more fraud is ultimately uncovered on the down cycle. So I've already dubbed this the golden age of fraud. And I suspect that when we're on the down part of this cycle, the bodies will float to the surface as they always do. But remember, the corollary to that is the harshest prosecutor and the staunchest defense attorney of a company is its stock price. Nobody goes after frauds at all-time highs. They only go after them after investors have lost money, because these kinds of things are political.
And that's a big question because, like the dot-com boom, we have an accounting identity problem that follows these capex booms. Namely, that the companies that are spending the money do not expense immediately most of that money that's being spent. It's capitalized and depreciated over five to ten years. The companies receiving a lot of that money — the Nvidias of the world, the Caterpillar tractors of the world, the utilities — they're receiving it in terms of revenues and profits immediately. So the same dollar is basically contributing to profits in a far greater extent than it does in a more normalized economy, where it would be recognized as revenue by one company and expense by another. And that's what we're seeing. And that's why S&P profits have taken off in the last two years. It's because of this mismatch.
That was the theory. This week, we saw it play out. Leopold Aschenbrenner is 24. His fund, Situational Awareness, was up 439% for the first half of the year, swelling to roughly $45 billion. He told investors the sell-off had created an unusually attractive opportunity. Six days later, after mounting losses and margin calls, the fund sold most of its public stock portfolio to Ken Griffin's Citadel in a fire sale. Situational was left managing roughly $10 billion.
Last week we learned a truth bomb, which is that it turns out he was 5x levered up. He was then margin called, and then he decided — well, not decided, he was forced to liquidate his entire public equity portfolio, and supposedly he's also selling his stake in Anthropic too. And it is remarkable because if you've been online, if you've been on Twitter and you're kind of plugged into the investing community, this guy was considered AI Jesus. He was like the savant of our time. He could predict the future. He knew everything that was going to happen. And literally overnight, the whole thing has collapsed. And what is it? It's a story of leverage once again. He was levering up into the hottest stocks, into the hottest momentum trades in the world. Looked really smart until suddenly he didn't.
That was the institutional version. The retail version happened on the other side of the world. South Korea's market fell 44% from its June highs. $2 trillion in value gone. The cause was a product launched in May: single-stock leveraged ETFs tracking Samsung and SK Hynix, multiplying daily returns by two, three, even five times. Here's both Scott and Ed on Monday's PropG Markets.
Leverage on the way up is a ton of fun. It's ugly on the way down. And my understanding is — talk about a gambling economy — 92% of investors in these products were retail. And so there were two brokerage accounts for every citizen in South Korea. So it was never institutional risk, it was household risk. And Goldman estimates that 3.4% of South Korea's adult population has received a margin call. I mean, that's insane when you think about it. So the human cost here is so real that South Korea has rolled out a debt counseling hotline as part of its suicide prevention plan. That's a sentence that should give us all pause. And so the lesson here isn't new. It's just very expensive for every generation to relearn this, and that is: leverage doesn't create risk. It removes your margin for being wrong.
You mentioned the craziest stat, I think, which is that more than 3% of the adult population has now received a margin call in South Korea. But I think probably most astounding is some of the imagery that we're seeing coming out of South Korea. If you go to the National Assembly building in Seoul, South Korea right now, and you go on the sidewalk, you will find a pile of funeral wreaths on the street with a sign that says, 'Abolish the single-stock leveraged ETF.' Because suddenly everyone is realizing that this stuff is extremely dangerous. There are literally thousands of people who have lost their life savings because they convinced themselves that this was the way to do it. This is how they were going to get rich. I mean, if you look at the amount of people in South Korea that are in the red on those two names, on SK Hynix and on Samsung, it comes out to around 70%. That is according to the Korean stock market regulators. The response from regulation, from the people in charge of South Korea's version of the SEC, is they're going to just stop allowing these new listings of the single-stock leveraged ETF.
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Hahn, G. (2026, August 7). The Week: The $45 Billion AI Fund That Imploded [Interview transcript]. The Prof G Pod – Scott Galloway. CEOInterviews.AI. https://ceointerviews.ai/interview/3006089/
MLA
George Hahn. "The Week: The $45 Billion AI Fund That Imploded." The Prof G Pod – Scott Galloway, 7 Aug. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/3006089/.
BibTeX
@misc{hahn2026_3006089,
author = {George Hahn},
title = {The Week: The $45 Billion AI Fund That Imploded},
howpublished = {Interview transcript, The Prof G Pod – Scott Galloway. CEOInterviews.AI},
year = {2026},
month = {aug},
url = {https://ceointerviews.ai/interview/3006089/},
note = {Speaker-attributed transcript with timestamps}
}
