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April 26, 2015 / 7 Iyar, 5775
At a Glance

Posts Tagged ‘economy’

Moody’s Finance: Netanyahu Coalition to Be Stable and Good for Economy

Monday, March 23rd, 2015

The expected right-wing government headed by Prime Minister Binyamin Netanyahu “would likely be inherently more stable than a coalition led by the centre-left Zionist Union, which would struggle to put together a majority,” Moody’s Investors Service analyst Kristin Lindow wrote Monday.

The world-wide credit rating service said the victory by the right-ring in the elections last week is good for Israel’s credit rating because of expected  “economic policy cohesion.”

“We expect the government’s fiscal rules to contain spending growth and keep credit metrics for Israel on their well-established improving trend, a credit positive,” Lindow and co-author Pamela Reyes Herrera  wrote.

He added that the coalition that Netanyahu is putting together will last longer than the previous and ill-conceived government.

The new administration “would likely be inherently more stable than a coalition led by the centre-left Zionist Union, which would struggle to put together a majority,” Lindow said.

The Moody’s report added, “The economy’s recovery from last year’s Gaza conflict should lead to rapid consensus over the budget allocations.”

A government source told “the Globes business newspaper that the announcement by Moody’s “is a positive announcement. It can almost be called a ‘God speed’ for Netanyahu.”

This is bad news for the “anyone but Prime Minister Binyamin Netanyahu” campaigners, whose spokesmen, such as The New York Times and the Obama administration, have drowned out the right-wing victory with twisted analyses to soothe their wounds while babbling that Israel now will be worse off than ever.

The irony of Israel’s Labor party, which now calls itself the “Zionist Union” following the merger with Tzipi Livni’s faction, is that unlike its counterparts in the rest of the world, Labor is anything but socialist.

Israel’s Labor party always has been run by the old-guard elitists, except for a short interval when Amir Peretz, long-time leader of the Histadrut national labor party, carried the ball and fumbled it forever.

Israel’s tycoons, which control most of the manufacturing capacity in the country, always have been behind Labor and against reforms to create a free market.

Bolshevik-Like Israel Media Hide Good Economic News

Monday, March 16th, 2015

The Consumer Price Index (CPI) sank 0.7 percent in February, following a 0.9 percent drop in January, but Israel’s media front against Prime Minister Binyamin Netanyahu has buried the report lest people realize the truth.

Netanyahu cannot take any credit for the drop in prices, but reporting good news for the consumers would destroy the myth propagated by the Israeli media establishment that the consumer is worse off than ever under Netanyahu.

The CPI has fallen 1.5 % in the past 12 months and 1.6% for the first two months of this year.

The drop in the price of crude oil was sharper than the rise in the shekel-dollar rate, accounting for a reduction in the price at the pump.

But Internet and telecom services also dropped 2.7 percent last month, another result of the revolution called “free competition” initiated in the Netanyahu administration under the aegis of then-Communications Minister Moshe Kachlon.

Netanyahu on Sunday publicly offered the Finance Ministry post to Kachlon, who left the Likud government and now heads his Kulanu party.

The name “Kulanu” is scary to tycoons.

Immediately after publication of Netanyahu’s offer to Kachlon, the banking index in on the Tel Aviv  Stock exchange dropped by 1.5%. The tycoons are afraid that Kachlon as Finance Minister will cut ridiculously high fees that banks charge customers for everything but breathing.

The Globes business newspaper reported:

Kachlon is promising substantial reforms in the Israeli banking system, especially the opening of the sector to competition, as he did in the cellular market. The stock exchange is listening to him, and in view of the likelihood that he will be appointed Minister of Finance, investors are sending the banks shares…southward.

If anyone thinks he is destroying the ability for companies to profit., take a look at the Cellcom mobile phone company.

Kachlon said several years ago there is no reason that the oligarchy of mobile phone companies should earn billions of shekels a year. Cellcom’s stock was selling at more than $32, and Its shareholders enjoyed a steady 10 percent rise in the price of the stock every year along with a fat dividend of more than 12%.

That was before Kachlon acted, opened the market to free enterprise, which was followed by a 90 percent drop in cell phone rates.

Cellcom’s shares eventually sank to approximately $5, but is the company losing money?

The company reported today its earnings for 2014, and don’t shed any tears for the shareholders.

Net income increased 2.9% compared with 2013.

Netanyahu Exploits Elections to Raise Minimum Wage

Sunday, December 21st, 2014

Prime Minister Binyamin Netanyahu told the Cabinet meeting Sunday the minimum wage for approximately 700,000 Israel will rise by 15 percent to $1275 a month.

“This morning, I met with Histadrut [labor federation] Chairman Avi Nissenkorn and Manufacturers Association of Israel President Tzvi Oren,” the Prime Minister said.

“I informed them that I have instructed the Finance Ministry to enable the Cabinet to raise the minimum wage to NIS 5,000. This is in continuation of our raising the minimum wage from NIS 3,800 to NIS 4,300, which we did in 2011, and now we are raising it from NIS 4,300 a month to NIS 5,000 a month,” he added.

Netanyahu issued the order two weeks after he fired Yesh Atid leader and coalition nemesis Yair Lapid as Finance Minister.

Raising the wage by 15 percent all at once will  have an inflationary effect, but no one will notice it so quickly.

Aren’t elections a great way  for getting things done?

Actually it is a terrible way but it seems to be the only way that works.

 

 

Haredi Israelis Get the Most Benefits and Are the Deepest in Debt

Wednesday, December 17th, 2014

A new study shows that Haredi Israelis are behind the financial eight ball more than other sector even though their monthly benefits form the government are 60 percent more than others

The Taub Center for Social Policy’s 2014 State of the Nation report, blamed high housing costs as the main reason households cannot make ends meet.

Haredi families, which on average have far more children than secular families, spent nearly $00 (3209 shekels) more than their income, compared with approximately $214 (864 shekels) for non-observant families.

The gap among Muslims was nearly $500 (1919 shekels).

Monthly benefits, other than earned income, for Haredim was slightly more than $800 (3256) shekels a month.

The report cited housing costs as the biggest problem for Israeli families to end the month without an overdraft.

Even families with both spouses working have a hard time being able to afford a $250,000 mortgage to buy a home, and the amount could be double that much in the Tel Aviv or Jerusalem.

However, a large number of husbands in Haredi families learn in yeshiva and rely on a stipend and their wives’ income.

The Bank of Israel, both under the guidance of Stanley Fischer and now his successor Karnit Flug have urged the government to encourage Haredim to enter the work force and be more self-reliant.

Israel, Mexico, Sign Research & Development Pact

Tuesday, December 9th, 2014

Israel and Mexico have signed a deal to cooperate on industrial research and development, Israel’s Ministry of Economy announced Monday.

The two nations are set to fund joint projects aimed at advancing industrial development between both.

Leading fields for cooperation with Mexico will focus primarily on water management, desert agriculture, pharmacology and medical devices, electronics and communication.

“Mexico is one of the world’s largest manufacturers in a variety of fields, comprising an essential part of the country’s economy,” said Rona Kotler Ben Aroya, trade attache to Mexico from the Israeli Ministry of Economy.

“The signing of the industrial R&D agreement between Israel and Mexico will help Israeli companies integrate products and advanced technologies with local manufacturers and realize the potential of [the North American] market.”

Bennett Signs Up UST Global to Bring 10,000 Jobs to Israel

Monday, December 8th, 2014

The giant California-based UST Global will build a cyber-defense center in Israel and will employ up to 10,000 people, including Haredim, Minister of Economy and Jewish Home chairman Naftali Bennett announced from Washington.

In a video (below) that Bennett posted on his Facebook page, UST CEO Sajan Pillai, sounding like Bennett’s election campaign manager, said that one of the reasons his company chose Israel to build the center is “the ability of the government leadership to act quickly.”

UST also is acting quickly. Pillai said he hopes to start working on the new center by the end of March, which just happens to be 17 days after Israelis vote for a new Knesset.

UST Global is a multinational provider of IT services and solutions and specializes in healthcare, retail and consumer goods, banking and financial services, media, entertainment, insurance, transportation and manufacturing.

Bennett and Pillai did not disclose where the center will be built except to see it will be in the “outlying” areas, meaning not in metropolitan Tel Aviv. Bennett said  that the company’s training program for workers will include Haredim.

The Be’er Sheva area is a good guess for the location because several international companies already are establishing high-tech centers in a new industrial park being established in cooperation with Ben Gurion University.

“Today, more companies in the world look at cyber-defense as one of their top problems,” said Pillai, who said the first reason UST is locating in Israel is that it has “the best brand for intelligence and cyber defense, bar none.”

He added, “Number two, 40 percent of all cyber defense companies today are located in Israel.”

The accomplishment of bringing 10,000 news jobs to Israel and to relatively underdeveloped areas will be a big plus for Bennett in the election campaign, in which the economy is a major issue.

The favorable polls for a new party headed by former Communications Minister Moshe Kahlon, who broke the cartel of mobile phone companies and brought down mobile call prices by 90 percent, is a strong indication that voters want action and not talk.

Yair Lapid, who was Finance Minister until Prime Minister Binyamin Netanyahu fired him last week and called for new elections, has been championing a program of zero Value Added Tax on the purchase of new homes, but he failed to bring the bill into law. His proposal earned headlines and was applauded until it became clear that there were so many limitations in the bill that it would help only a few thousand people.

Shekel-Dollar Rate Soars to 3.96 on Election Talk

Tuesday, December 2nd, 2014

The shekel-dollar rate soared to more than 3.96 on Tuesday for the first time in two years as investors dumped shekels and bought dollars due to the almost certain break-up of the government coalition and the need for new elections that will leave the country without a bona fide budget.

The rate rose by one more than 1 percent. An increase of that size has been very rare since nearly a decade ago when the only question was not whether the shekel would weaken but by how much.

The 2015 budget has not been passed, and new elections are exactly what the economy does not need, except for the media that will profit from advertising and the printing presses that will be running day and night to trash the country with party propaganda.

The big winner of the cheap dollar is exporters. A strong currency makes people feel proud, but a cheap currency always boosts exports since the incoming dollars are converted to shekels. The more shekels the dollar is worth, the more profits a company makes.

The downside is that consumers have to pay more shekels for imports.

Globes quoted FXCM as saying, “If we do have elections before the budget is approved, this will be disastrous for the Israeli economy and will severely damage market confidence, both locally and globally, in the Israeli leadership.”

 

 

Printed from: http://www.jewishpress.com/news/breaking-news/shekel-dollar-rate-soars-to-3-96-on-election-talk/2014/12/02/

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