Zócalo Public Square

Over the past few years, Americans have heaped blame for the financial crisis on hedge funds. These mysterious but powerful organizations have, in just a few decades, invented previously unheard-of financial instruments, created new markets, and rewritten the rules of capitalism. By studying everything from economics to physics, hedge fund managers also seemed to accomplish the impossible — beating the market, and surviving repeated financial panics, from the stock market slump of the early 1970s to the bond market downturn of the 1990s to the dot-com collapse in 2000. How will hedge funds — and the controversial, commanding men and women who run them — pull through the latest crisis, and how will they determine the future of finance? Sebastian Mallaby, Council on Foreign Relations senior fellow and author of More Money Than God: Hedge Funds and the Making of a New Elite, visited Zócalo to reveal the hidden history and workings of hedge funds, and the way they’ll shape the future booms and busts of our econom