LABJ FORUM – Prescription for Malaise?

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LABJ FORUM – Prescription for Malaise?

With nearly 300,000 jobs shed since January, the economy just can’t seem to come to life, stuck in a lull that dates back to the Internet woes and exacerbated by war and terrorism jitters. The best economic news has consistently been interest rates, which have driven home sales and refinancings. So the Business Journal asks:

Will last week’s interest rate cut make a difference to you?

Ron Pierce

Director of Design Strategy

Stuart Karten Design

We are a capital-intensive business. Once our clients start investing in (industrial) design it is a beginning of a series of expenses that start to escalate. So, we are very much impacted by the cost of money. Personally, we are in the process of refinancing our mortgage, and as a result will continue to shop to make sure we are getting the best deal. The other thing is that it’s time to start negotiating with credit card companies to lower interest rates. That’s something I plan to do.

Dan Graff

Chief Financial Officer

Pacific City Bank

It won’t make any difference. The rates are so low now that 25 basis points does not do anything. I have refinanced my mortgage down to where I don’t think it is going to go any further. The credit card rates are pretty much down there. And banks are hesitant to bring down their prime rate because deposits are so low they can’t reduce their rate any further.

Barbara F. Hecht

President

John Tracy Clinic

The stock market affects our investment fund, and the market went down when the news was announced. Our major concern is the impact rates will have on the stock market. I think it’s going to get better. The lower interest rates will allow us to do a little bit of work on our house. We have been thinking about doing a little upgrade on our kitchen. We might take a second mortgage out.

Bruce Hamer

Director, Fiber Optic Enterprise

Los Angeles Department of Water & Power

It is a way for the Bush administration to try and stimulate the economy. More directly, I am hopeful it will drive mortgage rates down that much more so I can refinance yet again. My thought is to take the reduction I can get in monthly premiums and apply that saving to accelerate the pay down on the loan.

Greg Catlett

Vice President

Video Symphony Entertainment Inc.

Interest rate cuts are good and bad. It’s good that you can pay less interest. On the other hand, it cuts your tax break down when you refinance. Overall, I don’t think it’s going to really aid in the economy. It might help to sell more houses.

Chris Hansen

Senior Vice President

Los Angeles County Museum of Art

Low mortgage rates have been something I enjoyed. I took the chance of doing a variable mortgage, and am enjoying the fact it is continuing to go down. I hope the public will feel freer to spend money, and people will attend the museum at higher rates and consider membership at higher rates then they did last year and the year before.

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