Treasury Secretary Timothy Geithner did his best at filling in the blanks on the Obama administration’s plan for cleaning up the so-called “toxic assets” clogging the balance sheets of banks.

Investors have been clamoring for more details ever since Geithner announced the broad outlines of his Financial Stability Plan last month. Having detailed some other components of his plan, including consumer finance, housing, and small business loans, in recent weeks, Geithner tried to put the focus this week on those hard-to-value bank assets.

His plan for a Public-Private Partnership Investment Program involves anywhere from $500 billion to $1 trillion worth of enticements from the federal government. The hard part is yet to come, though, and it’s too soon to say if private investors are ready to take the bait. One promising sign is that the Dow closed up nearly 500 points when the plan was announced Monday.

The plan at least sounds as if it has some sensible components, including the creation of a price discovery mechanism that is supposed to largely rely on the private sector. The federal government has already been stung by findings from the special inspector general of its Troubled Asset Relief Program that it overpaid for the preferred shares it bought from the banks as part of the $700 billion bailout program. To avoid overpaying for the illiquid loans and securities it now plans to relieve from the banks’ books, Geithner and his colleagues at the Federal Reserve say they’re going to let private investors set the price, as they would do in normal free markets.

Unfortunately now is anything but a normal time in the economic cycle. Banks and investors alike have little or no confidence in what assets like mortgage-backed securities, collateralized debt obligations, credit default swaps, would be worth in a skeptical market environment.

With the Financial Accounting Standards Board under the gun now to revise mark-to-market and fair value accounting standards to accommodate the banks, and an overzealous Congress intent on showing their anger in front of the TV cameras, in hearings that at times sound uncomfortably like something out of the McCarthy era, there is little reason to believe that Geithner’s price discovery mechanism won’t be subject to manipulation by banks, investors, short-sellers, hedge funds, private equity firms and fraudsters.

But it’s a plan at least, and maybe this time there are enough details to mollify Wall Street for a while.

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