As submitted by I’m Right…You’re Wrong

So all the analysts are in great moods as Israel joined the rest of the world in bailing out troubled companies.

According to the JPOST.com: “A further NIS 5b. will be used to set up a number of investment funds in partnership with the pension institutions (provident funds, pension funds and managers’ insurance providers) for the provision of non-bank credit and to deal with the refinancing of bonds. The establishment of the private investment funds will be on the basis of tenders. Out of the NIS 5b., NIS 3b. will be allocated with immediate effect and NIS 2b. in five months time. “The move is designed to support holders of corporate bonds when the bonds mature and to help assure

Trading halts were triggered in Tel-Aviv as the TASE dropped more than 11.2%. After curbs were lifted the market jumped to close down about 5%. It appears that one institutional investor dumped a ton of stock at the market price triggering the sell-off.

Keep in mind that much like in the US, where bailouts and stimulus have done nothing to stem market drops the same things appears to be happening in Israel as well. I’m Right..You’re Wrong has a great post about the Israeli treasury’s economic recovery plan. Clearly the market hasn’t taken well to the proposal to spend over 21 billion Shekel on government works projects.

The TASE major indexes are off about 50% YTD, and keep in mind that the general public is just waking up to this fact. Many have just started to cash out their pension plans and put them into government bonds. If this trend continues,

Stanley Fischer, Governor of the Bank of Israel, spoke yesterday on the stability of the Israeli banking system. Fischer, along with many other public figures has gone out of his way to keep telling the public that the local banking system is sound. While scaring the public about bank failures is irresponsible, don’t Israelis deserve to be told the truth about what is going on? How about a little honesty from our leaders.

If everything is so rosy, then why does the BOI have a plan to stream money to the local banks in the event of a credit freeze? Is this prudent planning, or cause for worry?

As reported in Globes, Fischer spoke about how disciplined the local Israeli banks have been. “In addition, Israel’s banks had no sub-prime exposure. “Israel’s banks said ‘No’ to this paper,” said Fischer.”

Really? That’s not how I remember it. Bank in March Bank Hapoalim

Following a pattern seen in markets all over the world, Israeli mutual fund investors are running for the doors.  Skittish Israeli investors are expected to have withdrawn over 5 billion NIS from Israeli mutual fund companies just in the month of October.  Investors have withdrawn $6.47 billion in the U.S. just this past week alone.

I’m having trouble locating the overall size of the Israeli mutual fund industry from an assets under management (AUM) perspective, but given its relative size, I have a feeling that this a relatively big number.  The same Globes article linked to above said that withdrawals were even higher in January of this year, probably after clients received their yearly statements for 2007.

Israeli investors are finicky and like many investors globally, tend to follow the hot money.  There is less of a buy-and-hold culture here in a

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While one rock star, Barack Obama, gets ready to accept his party’s nomination for president in front of 75,000 screaming fans at a football stadium in Denver, a real rock star, Paul McCartney, has a greed to a performance in Tel Aviv. McCartney will make a pretty penny for the gig. According to a report in Globes:  “The cost of bringing ex-Beatle McCartney to Israel will reach NIS 30 million (about $8.5 million), half of which will go to McCartney and his promoters, while the other half will cover production costs. At a price of NIS 1,500 ($425) for a front row ticket and NIS 500 ($142) for a place on the park itself, the promoters will have to sell 50,000 tickets only to cover the cost.”

They are expecting over 70,000 people to show up. Of course this is without taking into account any sponsorship money.

McCartney will pull in