Archives for December, 2007

financial news

Happy guessing season!

Traditionally the weeks following the winter solstice are marked by sparse economic activity. In the Christian nations, people are on vacation having already made all of their purchases for the year. Retailers are preparing to count their inventory. Accountants are getting ready for the busy January rush. Journalists have nothing to write about, so they re-hack the previous year. “Economists” don’t want to miss out on the fun, so they sit around making guesses about what might happen in 2008. You can see the guesses of Mizrahi–Tefahot here: ניחושי בנק מזרחי-טפחות They think we will have interest of 5% (today it is 4.25%) and annual inflation of 3-4% (my dog made the same guess). Here is the opinion of another genius , reported in...
Continue Reading »
banks

Globes: More mortage borrowers in arrears in Israel than in Europe

More mortage borrowers in arrears in Israel than in Europe Don’t panic. I haven’t forgotten how to spell. I am quoting Globes’ misspelling of the word mortgage. A curse on your house, evil Globes empire, for not using spell checker. Maybe I should have written the headline down More Mort(g)age etc. Linguistics experts please advise what the proper syntax is. You also don’t need to panic about foreclosures or a sub-prime fiasco in Israel. There is no looming mortgage crisis in Israel.I haven’t seen the actual research. Not to doubt any one’s professionalism, but with more than a little professional statistics work under my belt, I can promise you that those numbers stink of inaccuracy. If you click on this lovely picture, you will...
Continue Reading »
foreign currency

The whole world is reporting inflation

האינפלציה בגוש האירו בשיא של שש שנים – And we thought the 0.4% hit to the madad (consumer price index) was bad with us. In the USA they had 0.8% inflation and in the Eurozone they had a walloping 3.1%. That is for November only, not for the whole year. As I have said before, I consider the value of the Euro to be over-inflated, and expect that it will fall against both the dollar and the shekel. For us, this inflation is only half the story, as the strong shekel has kept inflation in check. The dollar has risen above 4 NIS again (also from YNET). In the meantime the mortgage banks are empty. They are bending over backwards trying to bring in...
Continue Reading »
financial news

ריבית על המשכנתה ייחשב כהוצאה מוכרת למס

ריבית על המשכנתה ייחשב כהוצאה מוכרת למס Though this new law won’t affect most of our clients, it looks more thought out than most of our laws.Many have been pushing for these laws for years, amongst them new building contractors and some of the banks. In the USA a similar law has had a strange effect. The underlying premise of the law is that by recognizing the amount of interest paid on a mortgage as tax write-off, home ownership is aided. The expected result is that middle and lower class families will be able to more easily purchase homes. The actual result is that most of the mortgages in the States are actually held by upper class families who buy additional investment homes, partly...
Continue Reading »
interest rate

ריבית הליבור על ליש”ט זינקה

ריבית הליבור על הליש”ט זינקה בשיעור הגבוה זה 13 שנה – My partner Oded Krantz alerted me about this today. The ramifications of this are amazing.The LIBOR rate is the anchor for foreign currency loans in Israel. Typically, a loan indexed to a foreign currency is linked to the coin and pays an interest of LIBOR+1.8 or something similar. With the LIBOR now at 6.72, this could mean that there are Israelis paying interest rates close to 9%! If for some reason you still have a US$ indexed loan, there was never a better time to refinance. The Euro and other currencies will probably all lose ground to the mighty shekel in the next few months. If you have a foreign currency indexed loan, it...
Continue Reading »