First of all, the idea behind investing in distressed equities is the idea of buying a company that otherwise has a lot of underlying value, but for whatever reasons like bad or corrupt management, poor marketing, bad luck etc., is in danger of, or is going bankrupt and is very undervalued. By then restructuring the company, changing the management, injecting a little capital into the capital, the fund can revive the company and turn around and sell it off at a higher price. In essence, its like "corporate makeover extreme" or renovating and flipping foreclosed houses or seized automobiles.

Why would these hedge funds "root for a recession"? Yeah sure, there would be many more companies going into distress, but how are these hedge funds supposed to sell their shares after turning these distressed companies around if NOBODY has any money to invest? Its completely illogical.

Second of all, these hedge funds are not completely beholden to just investing in distressed securities. They may specialize in it, but most hedge funds I know will invest in many different financial instruments including stocks, commodities, options and derivatives, real estate, private companies, art, etc... In fact, the name "hedge fund" implies that the fund "hedges" its bets in order to minimize its risk, and ideally lock into a guaranteed rate of return -- at least any hedge fund worth its paper. Hedge funds that DON'T hedge deserve to fail. So it doesn't matter if the economy is booming or going into a recession, a hedge fund will find different ways to make money by adjusting the allocation of its portfolio. But make no mistake: except for a few stock-shorting bear funds, almost ALL investment funds do well in a roaring economic boom than a recession. There is just simply much more money moving around and many more opportunities.

Third of all, there is nothing wrong with Chelsea Clinton working for a hedge fund. You know, economics and finance is a very important aspect in business of governmental management. I worked in a hedge fund specializing in merger & acquisition arbitrage when I was in college and let me tell you : no other place will you get more of an in depth knowledge of economics, accounting and financial/money markets both domestic and global. I was literally living and breathing finance every single day. Every little economic indicator or detail was poured over and studied. No aspect was left uncovered: if there was an opportunity to make money, be it in stocks, bonds or thoroughbred horses, we took a look at it. And if I was involved in a deal within a particular industry, for example prison management, I was expected to learn about that industry until I knew it inside and out like the back of my hand. If Chelsea ever decided to enter politics, that experience would be an invaluable one.

Besides, I was immersed in the cut-throat financial industry for the better part of my youth and here I am voting for Obama and his populist, liberal ideals. So what does that tell you?