CHESSNOID

OK, first of all the bad news that Paulson said he has changed his mind and thinks buying junk mortgages for full value is bad and decided against it is good news.  It never made sense to buy worthless paper at full value.  That actually is good news.  It appears bad because Paulson touted in the historic plea he gave Congress and America a month ago that this was the solution and no one should question it and time was of the essence, he has now admitted he was wrong and really didn’t know what he was doing.  The market reacted accordingly and so we had a bad day in the markets and shed about 5% off the indexes.

Paulson did a 180 and basically criticized his own idea as not being dynamic enough.

CNN.Money:

Bailout shift: Wednesday’s selloff gained momentum after Treasury Secretary Henry Paulson said late Wednesday morning that the government will no longer use the $700 billion bailout fund to buy illiquid assets from banks, which was its original intent. (Full story)

“Indecision is the worst thing for the market,” said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

Paulson said the Troubled Asset Relief Program would have taken too long to implement and that direct investments in financial institutions are a better way to restore confidence and ease credit conditions.

The program will also be broadened to include support for non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.

The modifications come amid reports that American Express (AXP, Fortune 500) has requested an estimated $3.5 billion in aid under the bailout plan.

In a way, he is saying he asked for too much money because he wouldn’t be able to spend it fast enough and his original idea was stupid.  No sense in being politcally correct here. It is what it is.  I personally think this bailout is a big con, fraud, hoax, and just ridiculous.  A month ago we had the the 3 stooges Bush, Bernanke, and Paulson saying the sky was falling and if we didn’t give them a trillion dollars we would be in a severe recession.  Well, Congress in its ignorance and against the will of the majority of American taxpayers, approved the Fraud Bill.  The money isn’t even all spent yet, the basic principles have changed completely, all the while the recession is growing deeper by daily layoffs.  These very well educated and highly experienced men are showing their true colors.  The numbers don’t lie and the economy doesn’t care which political party you represent and will punish poor decisions indiscriminately.   We are now in the midst of going from the Great Recession of 2008 to possibly the Great Depression of 2009: The legacy of Bush.