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If their investment strategies are secret, then how do we know that hedge funds haven't been bailed out by governments - at least indirectly? The secrecy makes it more difficult to evaluate if public policy could have been steered by politically connected hedge funds.

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We know they've been bailed out indirectly. Among other mechanisms: as counterparties to bailed out banks, as money market investors, and as holders of corporate and GSE debt.

1. There is no relationship whatsoever between the secrecy of their strategies and the likelihood of a government bailout. Most companies have some sort of proprietary secrets, after all.

2. They are no more secretive than the average private company. In fact, this is largely a myth, as is the belief that hedge funds are "lightly regulated". You can in fact find a lot of information about a fund by spending five minutes on the SEC website.

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