Don't worry—I won't make a political statement, but the terms of the $700 billion bailout are simply wrong. Here's why:

1. The bailout won't fix the core problem—housing deflation. It will make some more mortgage money available, which will keep people in their homes, which is great. The problem is that the values of those homes are underwater in the real-world marketplace—not on paper. Essentially, it will only prolong the downturn in housing prices.

2. The financial institutions of this country need capital to generate confidence and unlock the credit markets. It is outrageous that Congress approved a plan that does not reward taxpayers. Essentially, the bailout will reduce the capital base of the financial sector of the country. (See also: "How the Bailout Affects You & Your Money.")

3. The structural problems in the credit markets—the unregulated $62 trillion-plus derivatives market—aren't touched by this legislation. Ten years ago, equity markets drove credit markets; now it's the other way around. Until these trillions of dollars of credit-default swaps and other derivatives are made transparent, there will continue to be bear raids on companies and instability in core markets for commercial paper.

The underlying fundamentals, i.e., the numbers, the math, regardless of this bailout, the banks will not earn in the next five years anything near what they earned in the previous five before taking their write-offs.

Credit will still be tighter in the next five years than in the previous five, for business expansion and for consumers. The economy will contract and then stay sluggish—for the foreseeable future—and investors will run to recession stocks.

Recession Stocks—The Short-Side Way

But you don't have to follow the madding crowd. You can run the other way to the short side and make incredible profits from stocks that will continue to fall regardless of what the economy is doing.

It's a given that the financials are going to be a mess for a while, bailout and beyond. While my ChangeWave Shorts subscribers have made a lot of dough in this arena, including two money doublers in two days, let's just say it's been as easy as shooting fish in a barrel…