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[Gene GeRue <genegerue AT ruralize.com>]

> One thing I read recently coupled rising interest rates, reduction of house
> price increases, and stagnant incomes.  This implies that homeowners are
> not so able to pull equity out of the homes.  This in turn leads to layoffs
> in the mortgage and home construction fields.

The interaction of local, state, regional, national and international 
economies have become more obvious. I think of the water analogy, that we 
all live downstream. So, too, it is with prices and wages. We often decry 
federal programs that give large businesses a lift. But sometimes I think 
that those big businesses are at the top and we are at the bottom. I guess 
that's where the phrase "trickle-down" came from. Perhaps it works that way 
sometimes but not always. Seems that most of the largesse stays at or near 
the top.

You will note that the Fed has been very conservative about interest rates, 
moving them down over a long period and now moving them back up, only a 
quarter percent at a time, then waiting to see how the economy reacts. 
Their prime focus is on controlling inflation. Mortgage interest rates are 
not directly tied to the Fed rates but instead are more a reaction to bond 
rates. Investors choose bonds or mortgage securities depending on return 
and also security.