Is Nouriel Roubini OK with Geithner TALF plan? Ehh …

Josh Marshall at TPM marked him down for a cautious yes; let’s take a look at what Roubini says.

From where I sit, I would make that a very cautious, and very caveated, yes.

First, the OK:

With this plan, it will still be a hard swim, but, at least, there is a path to shore.

Next, the caveats:

The deal is structured so that firms will be responsible only for losses on their initial investment. The hope is that by giving this big "freebie," the government will induce investors to participate, and that competition among them will lead to higher offer prices for the loans and securities, thus encouraging banks to sell them.

A lot of ifs …

But let's not have any illusions. The government bears the risk if and when the investors take a bath on the taxpayer-provided loans. If the economy gets worse, it could get very ugly, very quickly. The administration should be transparent in making clear that there is still a wealth transfer taking place here - from taxpayers to investors and banks.

Italics mine, and very needed.

That last is the biggest caveat from where I sit.

It would be one thing to call for that level of transparency from “Abstract Treasury Secretary X.” it’s another thing entirely to expect it from real-world Treasury Secretary Tim Geithner.

Meanwhile, on the same NY Daily News online op-ed pages, Luigi Zingales zings the plan harshly. REALLY harshly:

The irony of the plan is that it seems to replicate the same excesses that brought the crisis - carrying enormous economic and political risk. …

If you think that the revelation of AIG lavish bonuses has shown all the rage of the American people, think again. When former subprime lenders will become the new billionaires, we run the risk of a populist revolution.

Only thing is, as Zingales knows, the idea of a “revolution” here in America? Chuck Norris’ third fist and half brain aside, not so much.