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TABANK Beats Bloomberg Analyst’s Estimates and Unemployment Rates Sink

The three biggest Israeli banks surprised analysts’ estimates for second-quarter profit, by sending the banking index to its highest close in a month.

The Tel Aviv Banking Index (TABANK), which includes the five biggest lenders, gained 1.2 percent to 1,107.58, set for the highest close it has had since Aug. 8. The index dropped 15 percent in the last six months, and the benchmark TA-25 fell 12 percent during the exact same period.

Bank Hapoalim Ltd., the second-biggest bank, led the gains rising 3 percent to 14.91 shekels at about 1:46 p.m. Israel Discount Bank Ltd. (DSCT) was sent up 2.9 percent to 6.13 shekels, and the American Bank Leumi Le-Israel Ltd. fell 0.6 percent to 13.17 shekels.

Bank Hapoalim’s net income rose 43 percent from last year to 712 million shekels, 11 percent more than the 643 million- shekel mean estimate by five analysts. Leumi, Israel’s largest bank by assets, said net income rose 10.7 percent to 563 million shekels or $158 million, beating the mean estimate of 535 million shekels by leading analysts. Second-quarter profit at Discount Bank climbed 48 percent to 231 million shekels, above the mean estimate of 192 million shekels by other leading analysts.

Stanley Fischer is keeping the benchmark interest rate unchanged at 3.25 percent for a third month as the economy expands and inflation slows down.
The two-year breakeven rate reflecting the rate of inflation which traders generally expected dropped to 206.9 on Aug. 22nd. This is the lowest it has dropped in at least 14 months. The rate spiked two basis points to 2.24 percent last week.

In other news, the unemployment rate fell to its all time low of 5.5% of the population labor force in the second quarter of 2011. Participation in the labor force jumped to 57.5% in the second quarter from 57.4% in the first. The number of employees was 3.2 million in the second quarter, a figure which includes 3.03 million employed by 175,000 private sector businesses.

58.9% of men over the age of 15 participated in the labor force in the second quarter, up from 58.3% in the preceding quarter, and the participation of women rose to 50% from 49.9%. The rate of men employed aged 25-64 rose to 72% from 71.7%, and the participation of women aged 25-64 shot up to 66.6% from 66.5%.

The number of men employees spiked to 1.6 million in the second quarter from 1.58 million in the preceding quarter, and the number of female employees rose to 1.43 million from 1.42 million.
The unemployment rate among people aged 25-64 fell to 4.6% in the second quarter from 5.2% in the quarter before that one. The unemployment rate among men in the age group fell to 4.6% from 5.5% and the unemployment rate for women fell to 4.5% down from 5%.

Africa Israel Can’t Pay its Debts

A second Israeli giant is on his way down. After Arkadi Gaydamak, the Russian billionaire, unceremoniously fled the country with his tail between his legs and renounced his Israel citizenship after a miserable failure of an attempt to run for mayor of Jerusalem by courting the Arab vote, Lev Leviev, another Russian billionaire and owner of Africa Israel, is suffering. The company lost over 1.3 billion shekels in the last quarter, and stock in his company has plummeted. He recently announced that the company will not be able to repay their debts starting in 2011. His biggest mistake? Investing in the US.

Leviev2009 debts are about 600 million, with 2010 being about one billion shekels, which they will be able to meet. After that, it all depends on where the global economy stands.

In big trouble from this crisis is Bank HaPoalim, which has significant investments in Leviev’s company, and if Africa Israel indeed can’t repay what they owe the bank, then the Israeli banking system could take quite a hit, as HaPoalim is the lead domino in what could be a continuous fall. Commission paid to banks in Israel is high as it is already, and HaPoalim has lost a lot of money in recent years. Just wait until Leviev’s drop comes around and then see what happens to bank fees. It’s not going to be pretty.

The encouraging news is that Israel is one of the first countries to officially exit the global recession, with economic growth small, but measured in the last quarter. Hopefully, it will be enough to offset this, and perhaps the giant can recover in time for the upswing. Until such is determined, it will be an interesting next few years. Is it ever not?

I wonder who the next Russian billionaire to get some stress will be. Leviev has admitted to flowing a billion shekels of his own money into the company to keep it afloat, and tells of working 20 hour days recently in a frantic frenzy to keep above water.

Shari Arison: It’s time people knew who I really am

The wealthiest woman in Israel tries to change her image. She is coming out with a new book, and, in its honor, breaks from her usual solitude and agrees to an interview. On her divorce from Ofer Glazer: “I love him but we’ve closed the circle”. On Dankner: “They’ve hung a man in the village square without a trial”. And on her yacht and the rosy future she predicts for herself, after she predicted the economic crisis. (Mako, Emanuel Rosen)

Shari ArisonAt 51, Shari Arison appears to have it all. She has a bank, she has billions. She is the wealthiest woman in Israel and she works nonstop, contributing, active, and still, Arison feels she’s missing out on something. She doesn’t have our love. She wants us to know her as she really is, and not the image created of an estranged, yet glowing, satiated woman. Perhaps the new book she has written, Birth, will accomplish this for her.

“I think I simply felt the time has come for me to be heard, who I really am”, she explains her decision to publish the book. “My book speaks in my voice and people will get to know me.”

Arison writes in her book that she has wanted people to admire her all her life, and it hasn’t happened. She feels exploited, a victim who gives but does not receive. “I am a person who gives a lot of herself”, she says, “and at some point, when you give and give and give and don’t get any back, or the opposite – get back only cynicism and ill will – then you feel empty and used and unappreciated”.

She wishes to free herself from her famous yacht, perhaps the symbol of her wealth. “It’s not for me,” she tries to explain. “For a while I enjoyed it and then I went through a period of torment. I realized I didn’t enjoy all the fuss surrounding it”. The economic crisis created an opportune excuse for her to look for a buyer. The problem is that there aren’t any buyers right now.
Bank of Israel’s insistence on dismissing its Chairman of the Board (Bank HaPoalim), Dani Dankner, she still doesn’t understand. “I think Dani was a wonderful Chairman”, she says. “I didn’t see a justification for what they are doing to him, but besides that, I think the global economic crisis occurred largely due to a loss of values. I don’t think one can hang a person in the village square without a trial or without any reasons I can see”.

Arison tries to explain why she changed her custom of keeping herself far from the camera’s eye in this story. “I am a person and first and foremost I am true to myself,” she says. “I sat quietly while everyone had their say in the newspapers and on TV, whether it was truth or lies and I said: “That’s it, I have something to say and I’m going to come out and say it'”.

The wealthiest woman in Israel claims she foresaw the global economic crisis. “I’ve been receiving messages, call them spiritual communications, for many years”, she tries to explain. “I see things, many things, before they happen. Apparently I’ve been granted this gift, to see the future, not in order to run and buy and sell and make a lot of money, but in order to bring the world to another place”.

She receives these messages, she claims, in images or words, sometimes during sleep. “I received a message that there would be a global economic crisis, that people would begin to go crazy, and we have seen that”, she says. “More and more people are going crazy, it’s amazing”.

These messages also bring hope. “Things will be good afterwards,” she predicts. “I think we are nearing salvation. Right now, it seems like we are in the dark, but light will follow”.

She is also now willing to speak about her father, Ted Arison. “At first, my father didn’t want to leave his businesses to me”, she admits. “Today I understand that it was out of concern. My father’s view towards his daughter was very subjective; he felt that I should stay home with the children. I thought he thought I wasn’t good enough, that I wasn’t deserving enough, but I now understand that this wasn’t true”.

Along with these stormy times, Arison has also had to face the scandal of her divorce from Ofer Glazer a few weeks ago. It was the last stop in a stormy relationship that fueled the press, particularly embarrassing stories – the height of them – her husband’s conviction in two acts of indecent assault and his going to prison.

“We got along well together from the very first moment”, she testifies. “I loved him very much. I love him very much, it was great fun and I learned a lot. I learned to laugh with all my heart, to enjoy, to do major things that are against my nature.”

She describes Glazer as a great hedonist, who loves to travel and have fun. “He likes everything in extravagance”, she says and points out the difference that perhaps brought about the crisis. “I’m very modest, very shy, very introverted. It was good for me”.

So how did it end? “I went through a very important period with Ofer, but we eventually closed the circle”, she says. “I guess I got what I was meant to have, and he got what he was meant to have, and now both of us have to move on”.

She stands behind him regarding the sexual charges he was convicted of. “He was done an injustice”, she says. “I was at home, I was a witness. Nothing happened”.

So who is Shari Arison, besides the woman and her wealth? “I have a lot to offer, and it isn’t money”, she says. “Shari Arison is a business woman, Shari Arison is a philanthropist, Shari Arison has a generous heart. I have a lot to offer”.

OUCH! Bibi does it Again!

In what many people are considering to be a shocker, the Netanyahu government’s Finance Ministry announced their proposed economic plan on Thursday. The Finance Minister, Yuval Steinitz (or is it really Bibi with Steinitz only filling the position as a “stooge” for Netanyahu), presented the new budget, which includes some changes that are reminiscent of Netanyahu’s previous stint as finance minister during Ariel Sharon’s term in 2005. Some of the new budget changes include:

1. A sharp 10% reduction in child allowances with an aim to “equalize” the amount a family receives for each child from National Insurance. This will severely hurt religious families, and has enraged Shas Party members, who agreed to join the Netanyahu government in the first place when he agreed to their demands, including those involving child allowance.

2. Reducing the Defense Ministry’s budget by NS 2.5 million and forcing the IDF to raise its retirement age for career soldiers as well as the amount of pensions received (sorry guys and gals, no more “golden parachutes” at age 45).

3. More restrictions on persons filing for unemployment: persons up to age 35 will only receive benefits for 45 days; 35-45 for 60 days; and over 45 for 90 days. When asked what people will do with so few jobs available, the answer was: Well, there’s gas stations, supermarkets, and “yesh neshek?” (the “do you have a gun?” question security guards ask people going into shopping malls, etc.).

4. Benefits for pensions and disability payments will be “frozen” until the end of 2010 with no cost of living raises, etc.

5. And, something that everyone who has to spend time in a hospital will feel: 50 NIS ($12) daily surcharge for each day spent in hospital (people won’t be so keen to stay there long, especially elderly people on limited incomes). And this sum is in addition to all other “out of pocket” amounts due.

All of this couldn’t have come at a worst time for most people with more than a quarter million Israelis “officially” unemployed and everyone feeling the sharp sting of this current recession (especially Bank Hapoalim’s head Shari Arison, who in addition to all her other problems is now planning to divorce her current husband, Ofer Glazer – yeah, that guy who spent some time in jail for “bothering” a female employee on Arison’s yacht. Shari may have to sell that too, to raise some badly needed cash).

All in all, it doesn’t bode well for us simple folk who are just trying to keep from drowning in very deep financial waters.

Bank Hapoalim Where Art Though?

In the last 2 days Bank Hapoalim has been basically off the air. It started with a temporary glitch and quickly turned into a full blown “Holy Crap!” type situation (would not want to be the head of IT right now!!!).

Anyway today the error message on the website was more personal and included a personal letter from the CEO, Zvi Ziv, where basically he explained that the brand spanking new IBM machine had a rare failure in its operating system. According to today’s message the error was found and they are reloading the whole system back up during the day today…..

OUCH!!!

I am hoping the update will add at least 3 zeros to my balance total. In any case the customers are getting no fees for transactions made yesterday and today.

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