March 26
March 26, 2008
Howard Edward Green
March 28, 2008
Even though interest rates are falling and stocks are down around 10 percent to 15 percent from the highest levels they attained in 2007, bank officers in Terrebonne and Lafourche parishes are insisting residents should save their money.
“It’s still a good time to save for consumers,” said Mickey Thomas, chief financial officer of the Houma-based South Louisiana Bank. “It’s important to save regardless of the cycle.”
Thomas said, traditionally, consumers have not done well at saving their money.
“It’s important to save because consumers have not done so,” he said. “It’s an individual decision: Do you enter the stock market or mutual funds or in a bank?”
He said consumers should weigh the impact of their decision because of the Federal Reserve cutting interest rates and the volatility of the stock market.
Consumers should keep in mind low inflation is countering the low interest rates, Thomas said.
Frank Bourgeois, president and CEO of Vacherie-based First American Bank and Trust in Thibodaux, emphasized that consumers can place their money in less risky certificates of deposit (CDs) and mutual funds to avoid the fluctuations of the stock market.
“We should save more and spend less,” he said.
Mike Riche with Community Bank in Raceland also warned about the current volatility of the stock market and that consumers should be cautious until a change in the economy occurs.
Mostly because of the high price of crude oil, Louisiana’s economy is relatively strong. The state has benefited as well from the influx of federal dollars following the hurricanes of 2005.
The economy in much of the rest of the country is struggling, however. Many economists believe the U.S. economy is bordering on a recession if the country is not already in one.
Nationally, employers eliminated 63,000 jobs in February.
But Thomas feels the high price of crude oil is the principal cause of the strong economy locally, even though Terrebonne Parish is overly dependent on oil.
“Extraction is our economy,” he said. “We think we’re diversified because we have a medical industry (and) Houma is a regional retail sales center.”
“But we’re naive to think we’re diversified if the oilfield goes bust,” he said. “Hamburger (restaurants) would not have sales because people would have no disposable income.”
“Our economy is a reflection of the pipelines, oil and gas and all the industries that support it,” Thomas added. “So we are countercyclical with the rest of the country. The rest of the country struggles with the high price of fuel but we’re booming over it.”
The Associated Press contributed to this article.
