President Obama clearly blamed hedge funds for the collapse of the Chrysler deal, which ultimately forced the company into bankruptcy Thursday. Hedge funds hold about $1 billion of the automaker's debt, which they bought at deep discounts from other investors who wanted out.

In his speech Thursday, Obama said, "In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other lenders were getting. I don't stand with them."

As DailyFinance's Peter Cohan wrote yesterday, "Perhaps they bought General Motors (GM) and Chrysler debt in the open market at 15 cents on the dollar and are now holding out for, say, an extra billion -- letting them triple their investment instead of merely doubling it."

In defense of the hedge funds, one of their attorneys, Ron Geffner, told the Washington Post, "I stand with the fact that we live in a capitalist society where companies who don't modify their business plans and stay current die and go by the wayside."

That may be true, but if Chrysler dies, the hedge funds get nothing for their investment. So where's the logic in this statement? Does he mean the hedge funds will stand on principal and let Chrysler die, rather than get at least something for their investment?

Some hedge funds tried for a softer approach at defending their position. A group of firms that would not identify themselves put out a statement that said the government "unfairly asked our fund shareholders to make financial sacrifices greater than those being made by" other creditors. They are holding back, hoping that the bankruptcy court will award them more as it discharges the debt.

Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, summed it up well for the Post, "It seems rather short-sighted to risk having the auto sector collapse so that they can get a few more cents on the dollar for their investors."

While hedge funds try to make those few extra cents on the dollar, thousands of workers face the prospect of additional layoffs and the car industry moves just one step closer to collapse. Where do you stand on this one?

Lita Epstein has written more than 25 books including Working After Retirement for Dummies.