Subscribe to Print Edition | Wed., September 17, 2008 Elul 17, 5768 | | Israel Time: 02:16 (EST+7) web haaretz.com   Back to Homepage Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate Easy Start Travel Week's End Anglo File

ANALYSIS / How will the U.S. economic crisis affect Israelis? By TheMarker Staff Tags: Economy, U.S., Israel How will the Wall Street meltdown affect the Israeli man in the street? It is too early to say, according to Tel Aviv-based brokerage I.B.I.: It all depends on how it affects the U.S. economy and the American consumer. The immediate question is how the enormous changes on Wall Street will affect risk premiums. If, as expected, borrowing costs go even higher, the credit crunch could become even worse. As the ripples spread, the next variable is how the meltdown will impact on other markets - mainly the giant emerging markets of China and India, but also eastern Europe. Advertisement America is a huge target market for Israeli exporters; thus another question is the extent to which Israeli investments and exports can shift to other markets, I.B.I.'s analysts pointed out. In the short term, said I.B.I., the main effect on Israelis will be losses by the provident and mutual funds in which they have invested. But in the long run, if the Israeli economy is indeed affected, we are liable to see a recession. The depth and length of such a recession are impossible to predict, the brokerage added. Of course, there is an upside, I.B.I. noted: The equity market is very cheap. Thus for long-term investors - emphasis on the long - this could be an opportune time to enter the market. Related articles: Israeli economy assesses its damages from Lehman collapse 'It's the end of the Wall Street era' America starts to come to its senses Bookmark to del.icio.us   Saddam in Tel Aviv Israel's Igal Naor 'never wanted to play Hamlet, only Saddam.' The preacher Archbishop Tutu to UN: Israel may have committed war crime.   1.   We will servive 09:16  |  Zoe 16/09/08   2.   Easy answers 09:30  |  Clickfool 16/09/08

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