Buying distressed assets is not the best way to use the TARP funds, Secretary Paulson says, acknowledging what has been realized by the market for some time. A second capital purchase program for non-bank firms is being considered, he said.

Heavy selling of EUR/JPY has hit the market, continuing the trend underway before Paulson took to the mike.

US equities are down more than 3% and emerging markets are even harder hit.

EUR/JPY is below its 61.8% retracement, accleerating losses and breaking 120.00. 118.20 is next support for the cross. 117.75 is the 76.4% retracement of the 113.61/131.16 rally.