Originally Posted by Relentless

The idea of a hedge fund is to hedge your bets.... Properly run hedge funds find nearly opposite positions and bet on both so they can't lose much no matter what happens and they can make a huge profit in the 'middle' if if both sides of the proposition pay off.

The modern distortion of a 'hedge fund' is billions of dollars being gambled with the idea that if it doesn't work out, the government will print more money and bail out the large funds that lost their bets.

It's why banking regulation is so important and why a lack of banking regulation is more dangerous than terrorism, the European economy, or pretty much anything else from a financial standpoint.