Sunday, August 05, 2007
Hysteria on Tel Aviv Stock Exchange
Nasdaq lost 2.5% on Friday and all, without exception, all the world's stock exchanges fell 1 - 2%. Saturday there is no activity anywhere but on Sunday Tel Aviv is open (also small Muslim stock exchanges like Bahrein, Saudi Arabia, Kuweit are open on Sunday). Now TASE is trading for almost five hours and the indices are all about 3.5% lower. Most of all, the real estate index is losing 20%. Now, why should real estate lose its worth so rapidly and so drastically? Apparently it is due to our analysts, our media talking heads (most mindless aged female barracudas), having heard something that in the United States there is crisis in the real estate sector, and not understanding anything, they are parroting "avoid real estate shares and anything linked to real estate, mortgages, and mortgage insurance". Now, there is no link at all all between American mortgage industry and the local (totally State controlled and subsidized) mortgage banks, and there is no mortgage insurance industry at all, which is done by the Government, and there is even less link with Israeli TASE real estate firms, which have grown out Israel and are active mostly in Russia and eastern Europe. The situation reminds me to the sudden and unexplained doubling of Willi-Food shares that took place on the TASE two months ago. The rise was due to a stupid mistake of the mass of bovine investors, who heard that the billionaire oligarch Gaydamek bought Williger Food Industries and mistook one for the other. In the end, serenity and reason will overcome. Maybe.