Archives for January, 2010


Why do I keep talking about energy?

Isn’t this supposed to be a blog about mortgages? How come I keep on writing about energy? One of my subscribers told me that he found the blog of some impostor pretending to understand something about Israeli finance, and the only thing he ever wrote about was mortgage rates. If you just happened by my blog and aren’t a subscriber, you probably aren’t familiar with my basic premise: rates are irrelevant. Banks make a big deal over them to blind borrowers from the really important facets of mortgages. These other factors are buried deep within the 6 pt. font megilah that everyone signs 3 times when they take out a loan. These things have everything to do with the national energy market. The news...
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economic news

The economic news keeps on getting better

The rumors have been around for a while. Now we know: Israel has marketable quantities of oil reserves. A few weeks ago we learned about great potential near Rosh Haayin. We should get the final word on the viability of those sources soon. Today we learned that known resources off the shore of Ashdod will start pumping oil soon. Image copyright NASA The next time you fly into Israel, you might see these out of the windows on the right side of the plane. The importance of this news, coupled with our recent gas production, can not be overstated. This means higher revenues to the country, lower taxes and more jobs. What does it mean for your mortgage? Every case is different, and you...
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Quick updates

News from the last week: The Ministry of Housing is trying to figure out how to lower the costs of new housing. There is a slight change in the taxation of house purchases that should lower the tax for most people. There was no inflation in December 2009. The dollar is at a 13-month low against the mighty shekel. The economy is doing much better than expected. Israel will be offically admitted to the OECD later this year. This is a great time not to panic. First of all, the ministry of housing isn’t going to lower the cost of real estate by allowing another thousand small apartments to be built in Bet Shemesh. In general, the government typically causes the opposite effect of...
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The experts are reading my blog

I’m so flattered that the experts who run the country are now following my musings.I noted that the Bank of Israel was still purporting 2.5% expected economic growth for 2010, when it now looks safe to assume that it will be a full percentage point more. Since then, the experts have come in line with my forecasts. You can read about it here. I also said that the dollar would weaken. This has happened. See the evidence. Even more good news, our budget deficit will be much smaller than expected. I had a client call me this morning. He is taking a hefty mortgage, and we have built a mix for him that will let him reduce his debt without exceptionally high payments. [There...
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bank of israel

Israel’s economy and your mortgage

Stanley Fisher, the Governor of the Bank of Israel, thinks that the dollar will be weaker against the shekel. This is because of the continued strength of the Israeli economy.Merril Lynch has raised their growth forecast for Israel from 2.9 to 3.5% for fy 2010. The BoI’s official estimate is still 2.5. You can see it here: Source: Bank of Israel Our so-called “slowdown” was all in the first two quarters of this year. (A recession is defined as two straight quarters of negative growth.) I’m sure had they not reported this in the news, we wouldn’t have had even that. Quite importantly, this shows that Israel is not necessarily attuned to the western economies. Right now, the situation is Israel is excellent, much...
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