Paulson: We changed our minds, we're not gonna use bailout money to buy troubled assets (even though we said we would)

[w¡n9Nµ7 §£@¥€r 123]

WASHINGTON – Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.

...

He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.

Paulson said that 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.

"This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said.

The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was "not the most effective way" to use the $700 billion bailout package, he said.

The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill.

http://news.yahoo.com/s/ap/20081112/ap_on_...ancial_meltdown

[mawilson 2,133]

Good move. Do we really need billions of dollars of toxic assets sitting on our balance sheet?

[SMOKE 1,426]

Good move. Do we really need billions of dollars of toxic assets sitting on our balance sheet?

what does this move mean? & how does it affect the average joe? in laymen terms please.

[w¡n9Nµ7 §£@¥€r 123]

More:

Paulson's remarks are an acknowledgement that the pitch he made to Congress for the bailout hasn't delivered what was promised. Paulson sold the rescue plan as a way to rid bank balance sheets of illiquid mortgage assets.

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Lawmakers will "put his feet to the fire,'' said Kevin Petrasic, a former official at the Office of Thrift Supervision, now an attorney with the Paul, Hastings, Janofsky & Walker law firm in Washington. "I'm not sure how you get around dealing with what is clearly the congressional intent.''

Paulson said he has no regrets for the revised plan.

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Buying "illiquid'' mortgage-related assets -- the reason the Troubled Asset Relief Program was established a month ago -- is no longer being considered, he said.

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Paulson said that the Bush administration ``has taken the necessary steps to prevent a broad systemic event.''

[I'm Gone 60]

He doesn't have a freaking clue to what he's doing. Him and Bernake had been telling Congress everything was fine until all this stuff hit the fan. Need to follow Jim Rogers advice and let business go under and foreclosures happen and let the market adjust.

[NickD 203]

Maybe Paulsen is saying that to keep himself out of jail.

[mawilson 2,133]

Good move. Do we really need billions of dollars of toxic assets sitting on our balance sheet?

what does this move mean? & how does it affect the average joe? in laymen terms please.

Depends on what they're going to do with the money.

The move could trigger another sell-off - the banks and investors have been holding

back from selling these "toxic assets" hoping to get a better price from the government.