This is what makes me laugh when everyone says “the hedgies are going to get killed” There is a winner and loser in every trade, and these days there are probably more hedge funds winning bets against housing than there are hedge funds that are losing in housing. Yes, some will go down in flames, but plenty are getting richer than ever.
If anything kills the big hedge fund industry we have today, it would be if banks stopped lending them tons of money to make their bets. If hedge funds can’t leverage their bets 5x or 10x, their returns may start looking much more average, and their huge management fees would not be worth it.
