Subject: File No. 4-573
From: Steve Reid

March 5, 2009

Honorable Mary Schapiro.

The American people have lost over $10 TRILLION in stock market value since October 2007. The programs designed to stabilize the Banking system have cost hundreds of Billions so far, with no end in sight.

I have a suggestion which does not involve the expenditure of taxpayer money, but rather involves a change in governmental tactic. It has been reported that the head accountant of the SEC has recently stepped down, and that he was against any change in the so-called "Mark-to-market rule". The SEC will be appearing before the House Financial Services committee next week, and hopefully will feel free to make changes in this rule. I believe modifying this rule would have a very positive short AND long term effect on the Financial sector and on the overall market.

This is the change I propose: Go back five years and get the yearly values of the bank assets to be valued. This would include the current "market" value which is artificially low due to the "negative feedback cycle" which overemphasizes the fear factor. When added together and divided by 5, a new value would be established. Each year the new market value would be added on and the oldest value would be dropped off the equation. This "Blending" would level out the change in values, and add stability and predictability (within a range) to the equation. I really think with the power of our computers that this blending could be calculated monthly to give even more stability and lack of volatility.

Once this new method is set-up the next step would be to create a clearinghouse to trade these troubled assets. By making this change the banks would regain confidence, and even more important they would gain net worth, which would make it possible for them to make more loans--without needing Billions more TARP money. The reaction of investors, with over $9 Trillion in money markets sitting on the sidelines, would be very positive. It may even have the effect of saving some of the $300 million unallocated TARP money.

Restoring the $10 Trillion lost by investors over the last year and a half would do more toward getting us out of this recession than anything I can think of. While there may be objections to this strategy for any number of reasons, what is the cost if it doesn't work? Surely it is far, far less than all the other strategies that have been tried, many with lackluster success. President Obama has mentioned that there will be fits and starts along the way, and we shouldn't expect perfection. If we need to modify this strategy along the way, so be it. LETS AT LEAST GIVE IT A TRY.

Steve Reid