It seems like everyday we get another headline about the ever increasing short European equity bet from the world’s largest hedge fund. I can’t figure out why Ray Dalio’s Bridgewater needs to disclose their massive European equity position, but there can be no denying that they are all-in.

[Post publication edit: a couple much more knowledgeable readers have been kind enough to inform me that in Europe, short sales need to be reported much like long positions do in the US through 13F reports- link – thanks for the info!]

From Bloomberg:

The world’s biggest hedge fund isn’t done betting against European equities.

Bridgewater Associates LP now has wagers valued at more than $14 billion that stocks will decline in the region after it disclosed a $1 billion short bet against Munich-based engineering firm Siemens AG. The value of the firm’s short bets in Europe has more than quadrupled this month and also includes a wager against the German sportswear manufacturer Adidas AG.

Bridgewater has been building positions against Italian companies including Intesa Sanpaolo SpA, Enel SpA and Eni SpA ahead of national elections in March. That vote is unlikely to produce a clear winner, hindering the country’s ability to produce economic reforms. The firm is also betting against energy, manufacturing and construction firms in Europe.

Now that’s a big position – even for Bridgewater. So what’s going on?

We will probably never know, but I think it’s an interesting exercise to speculate on the reasons for the massive bet.

There can be no doubt that it’s most likely a hedge against an existing position. That might be an equity long position from another country or maybe it’s against their European credit book. But either way, you don’t slap on a short position of this size unless you believe there is a good chance that European equities will decline.

But why does Bridgewater feel so strongly? Well, in no particular order, here are my best guesses.