Tom Cahill at Bloomberg wrote a solid story this morning titled "Hedge Funds May Post Worst Month In 5 Years." From what I am hearing from contacts in the industry, he doesn't look like he'll be far off in that prediction.
In his article he cites the Hedge Fund Research (HFR) Index "of more than 55 funds slid 3.2 percent through July 24, heading for the biggest monthly drop since the measure started in 2003."
Clearly the "meme machine" trades of shorting the Financials and buying everything Commodities caused some problems in July - suffice to say, these "Trades", as some “hedgies” like to call them, were a tad crowded, in retrospect.
The meltdown in the hedge fund industry remains one of the most misunderstood market risks. Many of these funds are managed as compensation structures, not real businesses. You won’t hear about the major blowups, until it’s too late. Stay hedged.