Hedge funds

I've always had a problem understanding hedge funds. Not that it's important to me as I don't invest in stocks, but I like to follow the general direction of the markets as it usually gives an indication of my work or lack there of. Here's a layman's guide to understanding this complex imvestment.
Hedge funds
The reason these are very important at this time is because much of the bad debt is neatly hidden in the deep levels of these funds and shortly they will be revealed for what they are "bad debt". Overheard a customer at the bread store mentioned to be aware of the economy in the next three months and now I know why. A company holding such bad paper hides it in an account called Level 3. They are legally required to report on this account after the first of the year. So hold on to your hats folks cause some of this Level 3 amounts to more than what a company is worth. Go read and decide for yourself if we aren't headed for hard times ahead.