CNNMoney.com – When the headhunter first called Richard Baker in late 2007 and asked him if he was interested in becoming president and CEO of the Managed Funds Association – the hedge fund trade group – Baker thought it was a joke. "My reaction was, ‘You want me to do what?’"

An 11-term Republican Congressman from Louisiana, Baker was about as likely a candidate to run the MFA as Bill Gates is to run an Apple in his home office.

Over the years, Baker had emerged as a fierce and independent critic of the financial services industry – pushing for tougher regulation of hedge funds after the 1998 collapse of Long Term Capital Management.

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Boston Globe - Hedge funds usually thrive when markets turn volatile. But even these fast-money investors are struggling to cope with the wild swings in the markets, raising concern that some may not survive.

Even before the Bush administration proposed its vast bailout for financial institutions, the hedge funds – those secretive, sometimes volatile investment vehicles for the rich – were on course for their worst year on record. The average fund is down nearly 5 percent so far this year.

One major hedge fund investor said he had started to buy Morgan Stanley at $23 on Wednesday, convinced the rumors of Morgan Stanley’s demise were unfounded. But as the stock began to plummet, he canceled his trade and watched with amazement as the stock sank to a low of $12 on Thursday.

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