Bizportal (in Hebrew) publishes a very long article by Prof. Grosfeld, saying that there is no economic crisis in Israel and that world economy is going to push ahead in no time. He says that high unemployment is excellent for the American economy, that low prices of raw materials are superb for the industry, and that there is nothing to fear. Israeli interest rates are higher than other places, and the Israeli Electric Corporation sold bonds paying almost 10% in the middle of worldwide crisis (what IS he suggesting?). His advice: "If you believe that the stock exchange reflect the real economy out there, buy!" My problem is that (1) the note speaks in code and I dont get his meaning, and (2) I am not sure what real economy does to stock prices, maybe speculation or sentiment are more important.
4 comments:
I don't get why Israeli interest rates would be higher than the rest of the world. As far as I can tell IEC should be at least as creditworthy as SRP. If you go to the SRP annual report for 2008 (PDF) on page 25 it states that SRP is using a composite rate of 4.6% for calculating its internal cost of funds, and on page 30 SRP gives each class of debt with the associated interest rate range.
Considering that Israel has recently been reclassified as a developed country, is politically stable, and is well managed financially I think you are being overcharged.
An Iranian risk premium? A risk premium for the possibility that Israel becomes the target of international boycotts, by those who consider it "an Apartheid state"?
We survived the 20 year long Arab boycott, we shall survive British and Norwegian boycotts too. We try to integrate into the Far East group, people who eats dogs and cares little for animal rights, excessive use of force in war, and so on.
The Arab boycott is only relevant because of their oil, otherwise the Arabs have about as much global significance as Ecuador or Bolivia.
Even with their oil, the West could be free of these camel riding parasites if we weren't following the advice of the Ecopagans. Right now the US has 26% of the world's coal reserves, abundant reserves of shale oil, and we have large stretches of coastline (such as off southern California) that really should have oil.
In addition to all of that we have Alaska.
The Ecopagans and liberals together are singlehandedly responsible for the West being beholden to these illiterate Arabs, and for these Arabs being able to use their oil money to colonize Europe and southeast Michigan. If the US were mining its solid hydrocarbons (coal & shale oil) we would be exporting energy to Europe, balancing our trade deficit.
And since exporting energy would benefit the conservative state of Texas, America would be farther right politically.
Thinking about the matter, Augusto Pinochet handled his leftists in a way I admire.
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