Mr. Paulson, the money manager who made billions during the financial downturn betting against the subprime mortgage market, admitted in his quarterly conference call that he had made a bad bet on a recovery in the domestic economy, the linchpin of the firm’s investment thesis this year. Now, Mr. Paulson is moving to cut leverage in one troubled portfolio, the Advantage Plus fund, which is down 47 percent this year. He also plans to reduce the firm’s exposure to the stock market more broadly, according to several people who listened to the roughly hourlong call. [Dealbook]