My main man Hank Paulson, head of the HPHF, has changed his mind about spending some of the $700 billion that he hopes to soon access. As of today, Paulson has roughly $60 billion left of the initial $350 billion which has been spent buying preferred shares of banks and insurer AIG.

Remember the Troubled Asset Relief Program (TARP)? The initial plan was to buy illiquid/mis-priced mortgage securities in order to get them off the balance sheets of huge companies in order to stabilize the market/economic system. The Treasury is the only entity that could afford to hold them for a couple years in hopes that the housing market would level out and the price of these securities could return to normal/par. Well, that is not going to happen.

Hank announced today that he wants to go in a different direction. Read all about it. My favorite part of this Bloomberg article is as follows,

"Paulson's remarks are an acknowledgment that the centerpiece of the $700 billion bailout request to lawmakers was ill-conceived."

Anyway, Hammerin' Hank now plans to throw money at consumer lenders so that Joe Q. Public can get a car loan, credit card, or student loan more easily. How will that happen? There is plenty of ill-liquidity in the consumer lending sector, and adding billions of dollars to that sector will ease pressures. Well, maybe.

So much for helping the housing market. Unfortunately, Paulson essentially has carte blanche regarding how he wishes to spend TARP money, and is not even required to announce plans for spending tax dollars.

The motto of this bailout and associated plan(s) of action? Ready, Fire, Aim...