exactly, there is no recession

They are "hedge" fund managers - if they are good ones, how will they not benefit under any given economic situation given the availability of capital? Of course, that may be their hurdle this year:

"However, making money has gotten more difficult as banks that were caught holding troubled subprime paper have reduced lending to hedge funds."

But don't feel bad for them - this just means they will make 10% - 20% less in 2008, so they will still have 10 digits in their payouts. Oh, the humanity!

@Laz: I think I agree with you. These people live on the edge, and can make billions, and lose it all the next day. The media hates them, I envy them

For every one of these guys that "bet" on the winning trading strategy, there's a hundred other hedge funds that went down in flames. You never hear about them until they fail spectacularly like Long Term Capital Management, because no one wants to admit they gambled and lost a tonne of money.

Give enough monkeys a billion dollars each and a couple will "bet" on the right thing.

What must be remembered is the fee structure these funds employ. At a bare minimum they are getting a 2/20 (2% of AUM and 20% of profits). However for funds of the Renn Tech, SAC, et al ilk, there are agreements up to 5/50. For a fund like SAC, with 6b AUM, that's $300mm in fees just for waking up in the morning.

Yep, the percentage of assets under management fee guarantees that they make money, no matter how poorly they or the economy performs.

YAY! now i know who the $5000 my 401(k) lost last quarter went to.

john paulson - hope you still have that in-law apartment in the west wing of your summer mansion - i'm gonna need it. & don't forget to leave the keys to the f1 on the counter this time!

They don't take your money...you give it to them.

Ya know, financial markets are strange and wonderful things wherein instruments exist that allow one to makes "monies" and "returns" even in a down market or economy. This seems to be a consistent source of surprise to the non-financial media, but trust me - it's true. Further, the people responsible for producing these "returns" or "profits" are often "paid" according to a previously agreed upon structure, as BillyMumphrey mentions above. And yes, sometimes that amount of "money" is "a lot".

@zibby: It's hard to imagine, i know. But money doesn't just disappear. If it leaves one area, it goes to another. It's like matter. Cannot be created or destroyed, just changed.

Yeah, it's easy to hate these people, and they're partly to blame for the mess, but it is their job to continue to make billions no matter what the economy is doing, so that's not surprising, nor is it an indication that the economy isn't in a recession .

The one dude made his money by simply NOT buying into the housing market. Pretty brilliant.

What's amazing is the guys who did run investment firms straight into the motherfarkin' ground by betting it all on the housing market ain't doing too bad themselves.