Archives for January, 2008

interest rate

The Fed Cut

The US Federal Reserve Bank dropped its core lending rate by 0.75% yesterday, from 4.25% to 3.5%. There is even talk of a further 0.5% reduction. What does this mean to you? Let’s take a look at historic interest rates for the past ten years in the US, Israel and the exchange rate: The magenta line is the Israeli interest rate. The blue line is the US rate. For the past year, the Israeli rate has been higher than its US counterpart. This contributed to those attractive mortgages that we saw last summer. However, if you look at the long-term trend, it’s hard to see the blue line higher than the magenta line. I can’t promise anyone that our rates will go down tomorrow,...
Continue Reading »

אושרה ייצוגית בסך 7 מיליארד שקל נגד שלושת הבנקים הגדולים בגין תיאום ריביות ועמלות

Wow! Just yesterday I was telling you about how Igud is being sued. Now they’re going after the “big three” as the article in The Marker refers to Leumi, Poalim and Discount. One of the complaints is that the banks use the same rate for the Prime, exactly 1.5% more than the Bank of Israel rate. I don’t know much about commercial banking, but right now there is killer competition between the banks for each and every mortgage, and we are getting our clients sweet deals. For the mortgages, the prime rate isn’t important, but the difference between prime and what the homeowner gets is. Would these lawyers prefer that we be unable to compare what the banks offer us? For me, it will...
Continue Reading »
banks

תביעה: אגוד גבה עמלות יתר על פירעון מוקדם של הלוואה

אגוד גבה עמלות יתר על פירעון מוקדם של הלוואות Does Igud (Union Bank) owe you money? If you refinanced or paid off a mortgage from there, they probably do. Take a look at this article in Ynet. With our clients buying properties, this wouldn’t happen. We get our clients mortgages with built-in flexibility and low barriers to mortgage recycling. Every case is different. There is no mortgage that is right for every borrower. You need to consult with an Israeli Mortgage Expertif you are buying a home or considering refinancing a mortgage....
Continue Reading »
forecasts

Housing market (UK) closest to slump for 15 years

This just in from the world’s leading anti-Zionist quality daily: Housing market (UK) closest to slump for 15 years Real estate prices fell in the US. They are now falling in the UK. In Israel, we saw a big slump about 8 years ago. When will the next slowdown occur? It will happen again in Israel. Right now we are experiencing good times for real estate investors. Values are increasing, and new housing is scarce. This can’t last forever. This is one of the reasons why we always encourage our buyers to stay within reasonable financing limits. We understand that there are market cycles. We can’t time the market perfectly, but we know that we are close to a plateau. Over the next few...
Continue Reading »

US inflation rate at 17 year high

האינפלציה בארה”ב בשיא של 17 שנים – 4.1% – Inflation in the US is the highest it’s been for 17 years. In Israel inflation was reported at 0.6% for the month of December and 3.4% for the year 2007. We should probably see more inflation reported throughout the Eurozone. During inflation, interest rates usually go up. However, in the USA, the central bank has said that they are willing to suffer inflation in order to stimulate the economy. They are ready to lower interest rate despite inflation. This will probably force the Bank of Israel to keep rates stable. With competition increasing for fewer customers, expect better deals.  ...
Continue Reading »
economic news

0.5% inflation seen for December

0.5% inflation seen for December Key quote from Globes: ” Despite the high expected December CPI, the Bank of Israel is expected to keep the interest rate for February unchanged at 4.25%. Governor of the Bank of Israel Prof. Stanley Fischer will make the interest rate decision in two weeks, one week ahead of Federal Reserve Board Chairman Ben S. Bernanke, who is expected to cut the Fed rate by 25 or even 50 basis points.” By the way, if you read American financial sources, they say 50 to 75 basis points. I don’t know which of these sources understands what’s about to happen to American interest rates. One thing that I am sure of is that Israel can’t allow for American interest rates...
Continue Reading »
banks

תחרות הבנקים על משקי הבית עולה מדרגה: הפועלים

תחרות הבנקים על משקי הבית עולה מדרגה: הפועלים Those of us who are in banks daily know that Poalim has been very quietly waiting. While other banks have been busy battling each other for new customers, Poalim has concentrated on improving its customer retention.  The giant has woken and will respond to the Lilliputian attacks on their hegemony. As is usually the case with competition, the consumer will be the winner in this battle. Expect generous. We’ve seen this battle brewing for some time now. This is one of the reasons why we have been advising our clients to take flexible programs. Who knows what kind of crazy schemes they will make up next month? Just in case something fantastic comes up, a mortgage...
Continue Reading »
banks

UBS gives a "buy" rating to the Israeli Banks?????

ב-UBS מתלהבים ממגזר הבנקאות בישראל: מעניקים המלצת קניה Not long ago, I postulated that Israeli banks were exaggerating their exposure to the “sub-prime” crisis that is wreaking havoc in the US credit market. My reasoning was that they were using these drummed-up worries to deflate the stock prices, allowing the owners and managers to make a killing later on. Based solely upon their business performance, the bank stock prices should have been higher. To be fair, the Bank of Israel demanded that they disclose their exposure. They exaggerated. Amazingly, here is a Reuters piece about Bank HaPoalim taking another $100M loss. Key quote from the article :“Hapoalim took a charge of $30 million on its high risk SIV holdings in the third quarter and...
Continue Reading »