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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: DCzzzz who wrote (1751)	10/2/2008 6:18:17 AM
From: mek42	Read Replies (1) \| Respond to of 34328

I sent out the below as an email to my representative today - thank you for the idea! Since it seems that the shrinking credit market is mostly due to the lack of a market for mortgage backed securities, why not use the size and power of the US Government to wrap all of these mortgage backed securities into one single REIT type of investment vehicle? Each investor (individual or institutional) that currently holds any of the original mortgage backed securities could be issued shares proportional to the par value of the original securities. The US Government could then retain a number of shares to dilute the actual value of shares downward from their initial par value as a fair assessment of risk. Perhaps a floor value of these shares could be guaranteed by the government. The shares could then be sold on one or more of the main stock exchanges. This solution has the benefit of normalizing the risk of these mortgages across all investors and allowing the free market to work. Since the shares will have a discrete value, banks should be able to stabilize their balance sheets, allowing the credit market to quickly return to business as it once was. Lastly, such a plan would show the voters and taxpayers that the government is listens to them and is capable and willing to come up with solutions to problems in a more creative and effective fashion than merely throwing money at the problem.