Did Paulson Break the CMBX Indices?

Check out the spreads.

The spreads, for example, on CMBX-NA-BB4 went from 1,200 basis points to 4,200 basis points in one day.

This is clearly a reaction to Treasury Secretary Henry Paulson's decision to alter the TARP program by deciding not to purchase any toxic assets after all. As Bloomberg points out, this means the return of systemic risk.

Did Paulson exacerbate the problem by proposing and eventually getting TARP? Did the commercial real estate industry make a mistake in getting behind this?