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[Tim Oppenheim <timopp AT mac.com>]

Gene,

Your downstream trickle-down analogy is very apt. It's like the  
mighty Colorado river, that now doesn't even reach the sea.

Tim
On Nov 9, 2005, at 9:38 AM, Gene GeRue wrote:

> > 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.
>
>
>
>
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