Take two, for Timothy Geithner. The Treasury Secretary announced today the plan for buying up “toxic assets.” And his performance by all accounts was much better the second time around, than when he debuted the plan in February. The markets went up, up, up. The Dow gained slightly more than 4% in value climbing 313 points by the end of the morning trading. S&P 500 and NASDAQ both gained over 4% in value, as well. The banking stocks did particularly well, since the plan announced this morning provides a way for them to unload their non-performing assets and unclog their balance sheets. The Treasury presented plan is essentially a public-private partnership, devised to share the risk in the financial system. The bad loans (referred to as Legacy Loans) will be pooled and auctioned off. The federal government will put up half of the capital to purchase them and private investors, such as pension funds, will provide the rest. The Federal Deposit Insurance Corporation (FDIC) will provide the guarantees. Here’s an example of how the program would work: a pool of bad residential mortgage loans with a face value of, say, $100 is auctioned by the F.D.I.C. Private investors would submit bids. In the example, the top bidder, an investor offering $84, would win and purchase the pool. The F.D.I.C. would guarantee loans for $72 of that purchase price. The Treasury would then invest in half the $12 equity, with funds coming from the $700 billion bailout program; the private investor would contribute the remaining $6. The second part of the program is the mechanism to trade non-performing mortgage-backed securities (again, referred to opaquely as Legacy Securities). The government will hire five asset fund managers whose objective would be to raise private capital to purchase these at some price, yet to be determined, and will receive matching government funds for the purchases. The plan is meant to give a jolt to the flow of credit in the system and also put breaks on the talk of nationalizing the banks (Geithner said, “We are not Sweden,” during his speech, to make sure all those who hoped we were--Paul Krugman--got the message). Another cause for celebration for the markets today was February home sales data, which was better than expected. Existing home sales were expected to be slightly lower last month, but they increased 5.1% instead. And predictably, foreign firms are angling for a portion of the $787 billion stimulus. Even for foreign companies that have operations in the U.S., as much 40% of the stimulus funds that they receive could go overseas.