Hedgies lose their magic touch

When the housing market started to crater in 2007, a small coterie of hedge-fund managers who had bet the bubble would burst cashed in their chips.  According to the NY Post They’d made big wagers that the crazy lending could not last, and they were right. The returns were staggering — anywhere between 100 percent and 500 percent.

Four years later, hubris, poor timing, bad judgment and the law of diminishing returns have pummeled the high rollers. Most of them now manage less money than they did four years ago when the big winnings bolstered their coffers.

Led by John Paulson, whose subprime short is the stuff of legend, these men became the new rock stars of the investment world. Other subprime winners included Phil Falcone of Harbinger Capital Management, John Burbank of Passport Capital, Steve Eisman, then of FrontPoint Partners (now Emrys Partners) and Kyle Bass of Hayman Capital Management...

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Find out more at http://www.nypost.com/p/news/business/subprime_karma_sZ8Ytgmo4UKVn165LqtFZN