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Is the roaring hedge fund industry ultimately good or bad for the stock market?

Hundred Dollar
Bill Haber
Hundred Dollar

"The hedge fund industry is very bad for the stock market. Hedge funds are doom for the small investor. They can often be detrimental for large investors who are out of the hedge-fund-loop. One large hedge fund, or a conspiracy of hedge funds, can sway the market -- usually lower -- if they decide to pull the plug.
-- John C., California

"Hedge Funds are great for the markets as their action increase market volatility. Ultimately increased trading activity drives stock prices higher. It's also important to leave hedge funds vastly unregulated…”
-- Dietmar S., Nevada

"Any industry that consists of individuals looking to make ridiculous fortunes and is essentially unregulated attracts more than its share of con artists who seek to profit not from their talent but from their ability to "manipulate" the system. This ultimately leads to fraud and failure. Although only a minority of hedge funds may suffer these failures, the consequences for the stock market and the financial community will be severe, prompting many in the industry to try to persuade the politicians they support with campaign contributions to have the public pay for a bailout."
-- Jeff F., Boston

"Being a investor for 15 yrs, my experience is these Hedge Funds manipulate and can control direction of securities I've invested in, for their personal gain. I can remember these fund Mgrs. downgrading one day and upgrading the next. The over all affect on an investor like myself can be devastating. I truly believe more Americans would be invested in our market today, making it a stronger Market. Instead due to the Volatility these hedge funds have caused, they have scared away and taken America’s small time investor’s money who are the backbone of this market place. Hedge funds can be good if they are regulated properly."
-- Randy W., California

"If not properly regulated Hedge Funds could create trouble within the marketplace down the road. Already there's talk of a financial bubble developing, and hedge funds could create problems within the markets they're part of."
-- Chuck H., Mississippi

"Hedge funds are dangerous to the market and are run by gangsters in suits. They play fast and loose with others money while seeking every opportunity they have to cheat and manipulate the underpinnings of our markets."
-- J.H.

More comments...

"I am very concerned that the hedge funds have grown to be such a powerful force on the overall markets. With their unlimited flexibility of trading vehicles and with vast leverage they spell a disaster waiting to happen. Everyone is playing in everyone else sand pile and their manipulation of the markets shows in the extreme volatility and the crazy days we have been having."
-- Chuck J., Georgia

"I believe that all but a few of the hedge funds are sleazy, poorly regulated, "cash rip-off" machines that can/will ultimately cause a large market debacle that will scald a lot of imprudent individual investors as well. Meanwhile the hedge fund principals will try to run with their ill-gotten gains."
-- B.P., Kansas

"Ultimately, Hedge Funds are good for stock markets -- they help to keep them efficient."
-- Mike

"This looks suspiciously like the junk bond scandal and the savings and loan scandal. It won't take long, the market will crash again and the one left holding the bag will be the American workers with their 401K's and IRA's taking a huge hit at the expense of these market manipulators running these hedge funds."
-- B.M.

"Hedge Funds restrict market activity by creating false impressions for investors by capping and pegging markets. Those guy's and gal's need to be regulated like everyone else. At some point they will implode causing an adverse effect on investors and the economy as a whole."
-- B.S.

"Bad, too many commoners rely on the market for their late life activity. An abrupt sell off could cause a negative chain of events."
-- John L., New York

"Ten years ago the big fad for all the "smart" investors was tech stocks. Five years ago it was real estate, and folks got wiped out in both cases because they didn't know what they were doing and didn't realize it wouldn't be so easy for the long-term. Hedge funds are just the latest fad (gimmick?) bandwagon that everyone is jumping on. After they crash, which they will, they'll revert to the mean. This fad will soon pass, in the mean time they're neither good nor bad for the market as a whole, but will be bad for a whole lot of self-proclaimed "smart" investors."
-- Ray M, Florida