In the end, all the bailing out and giveaways were un necessary and won’t solve the crisis. Making these groups of financial pirates disclose their holdings and holders will.
Hedge funds serve no useful purpose. They only move capital for the sake of manipulating an issue. The second they have pumped an issue up or down to a satisfactory extent, their money disappears and the issue experiences massive price reversals. They then sell the issue, or more likely, buy to cover. Subsequently, they proceed to profit from the chaos they create.
When more of the money in the market is speculative than actual long term capital investment, the market ceases to serve its proper function of reflecting the relative value of underlying instruments. That is what has happened. You see daily 5% moves in the stock market because no one can figure out what anything is worth.
Hedge funds have consciously created this chaos for their own profit at the expense of most others. A pension fund is regulated and must show holdings. An individual investor is regulated and must show holdings. A hedge fund is a country-less, border-less, law-less entity that answers to no one.
Hedge funds maintain money velocity. That’s a necessity ( in some people minds) in our fast paced economy these days.