These are terrific returns: Paulson & Co.'s Credit Opportunities fund has generated a gross return of nearly 700 percent this year. After fees, the gains are in the 550 percent range, according to Financial News Online. Another fund, the Credit Opportunities II fund, has put up comparable numbers, 400 percent gross and 330 percent net. Other funds posting sizable gains include Harbinger Capital and Balestra Capital. Does this answer the question: How did Goldman Sachs hedge the market in the 3Q? Well, the hedge funds reportedly made huge bets in the CDS market. Which is great. But the banks on the other size are liable for some huge cash losses. I doubt they were able to offset the bets fully. They may have some insurance. Stay tuned.  

For more:
- here's the Financial News Online article

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