The insider trading charges against hedge fund firm Galleon Group have forced it to start winding down all its hedge funds.

The growing scandal has grabbed public attention and thus taken the spotlight off a bigger trend: Hedge fund assets grew for a fifth month in a row on the back of strong stock markets and renewed investor confidence, reports Bloomberg.

These secretive and private pools of capital seem to have survived the gut-wrenching fall in global equities at the end of 2008 and early 2009.

New funds are also being planned. John Meriwether, a talented trader who was a prime mover of Long-Term Capital Management, which went belly up during the financial crisis of 1998 and almost pulled the global financial system down with it, is back on the road to raise money for a new hedge fund.

The return of hedge funds is part of a bigger story: the return of leverage and the carry trade. That’s natural, given rock-bottom interest rates and rising asset values. Are we headed for a new blowout down the line?