The lowering of medium and long term yields should: 1. Flatten the "yield curve" which in turn will affect, (reduce) the earnings of mREITS and; 2. Encourage refinancing which will also negatively affect mREITS. However, as I see things... 1) The yield curve has been flattening for a couple of months now and the results have been predictable...reduced earning and reduced dividends. When "Operation Twist" was done in the 60's the result was a 12-20 basis point reduction in longer term rates. Given the extremely low rates currently for mid and long term money, I don't think that the effect will be much greater than what the markets have already experienced; and 2) Current refinancing programs may be expanded but the problems facing those who's homes are "under water" are still the same and so I really don't see a great wave of refinancing occurring. In short, IMHO, neither "Operation Twist" nor expanding current refinancing programs are likely to have an impact much beyond what current conditions are and which I believe have mostly if not fully been priced into current share values and are being reflected in the recently reduced dividends. This in turn, for me, makes current valuations/yield very attractive. GL2U
A flattening of the yield curve is bad for mREIT's. Not only for mREIT's, but for banks too. This is the most important way that banks make money. A flat or even inverse yield curve is usually a predecessor to recession. Thi is why I seriously doubt the Fed will to this twist. They are not that stupid (I hope). They would be injuring the very firms they are in bed with. Makes no sense.