Subscribe to Print Edition | Fri., October 10, 2008 Tishrei 11, 5769 | | Israel Time: 01:41 (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 / Will Israel's economic leaders forge rescue plan or not? By Sami Peretz Tags: Financial Crisis  Will Israel's economic leaders forge a rescue plan or not? Will the government intervene in the capital market, spreading a safety net under the provident and pension funds? Will it inject liquidity into the banking system, or support a floundering financial institution? Who knows. Let's hope we don't reach such straits. Meanwhile, it seems that the Bank of Israel's governor, Stanley Fischer, may avert any such need, thanks to the rate cut yesterday and the promise to inject liquidity into the banks if needed. He also promised to step up purchases of foreign currency to shore up Israeli exports, if necessary. But there's an alternative rescue program already in action. The insurance companies are rescuing the tycoons by providing the liquidity they so badly need, through loans or by buying their assets. Advertisement Migdal is leading the trend. This week it bought the Cellcom House in Netanya from Eliezer Fishman for NIS 356 million. Two weeks ago it bought three assets (including Migdal House) from Yitzhak Tshuva's Delek Real Estate for NIS 275 million. Delek Real Estate needs liquidity badly, being leveraged up to its neck. Tshuva is also helped by the fact that he owns the Phoenix insurance company. A few weeks ago Phoenix lent NIS 75 million to Delek Real Estate. Eli Elezra, who also owns an insurance company and real estate firm, took advantage of the synergy to do an insider transaction, in which ILD Insurance lent NIS 30 million to Afridar. Harel Investments and Ashtrom Properties, two veteran strategic partners, until recently shared a real estate company called Har-Esh. Last week Har-Esh itself bought out Ashtrom for NIS 66 million, making Harel the sole owner. In all the above cases, insurance companies are providing the liquidity to cash-hungry real estate firms, under pressure from the banks. The banks have been sweating blood as share prices plunge, decimating the value of shares backing loans. They have demanded that the real estate companies, from Lev Leviev's to Shari Arison's, provide more collateral. Yesterday's rate cut should soothe the shattered nerves not only of the bankers but of the borrowers, too. Right now the insurance companies are the main source of long-term credit in Israel. They can roughly match the average duration of liabilities to customers (through insurance savings programs or pension schemes) and loans and investments to the real estate sector. They say about the banks that they give you an umbrella on a sunny day and take it away as the downpour begins. Right now it's the insurance companies doing the covering; the only question is whether the companies are doing deals that will ultimately benefit their clients, too. But we won't know that until the storm ends. Bookmark to del.icio.us   A man of peace Vatican defends wartime pope Pius XII against charge he turned blind eye to Holocaust. Feminine features An Iranian motor company unveils plans to design cars specifically tailored to women.   1.   We are only at the beginning of the economic meltdown 09:21  |  Clickfool 08/10/08   2.   #1 Clickfool - "Black swan" event - a fine term from Swan Lake! 11:39  |  S 08/10/08   3.   A Classic Panic 16:25  |  Mark Lincoln 08/10/08

Read & React Bradley Burston: For the journalist, on Yom Kippur Responses: 123 Edgar Bronfman: Judaism must recognize mixed marriages for Israel's sake Responses: 136 Arab lawyer detained after refusing to remove pants during airport check Responses: 185 Nadav Shragai: Settlers have become punching bag of the media and the left Responses: 65 Acre sees worst violence in years as Jews and Arabs resume clashes Responses: 171 More Headlines 00:10 Acre sees worst violence in years as Jews and Arabs resume clashes 22:25 Israeli Arab lawmaker: Acre violence is Jewish pogrom against Arabs 00:02 Russia hints it won't sell advanced missiles to Iran 18:03 Fatah says Hamas stalling on Palestinian unity plan 01:14 Israel on standby as global financial rescue takes shape 22:51 Syria releases two U.S. journalists who entered state illegally 23:46 New Nazi parody aims to smash German Third Reich comedy taboo 22:36 N.Y. rabbi: Animal rights backers threatened me over Yom Kippur chicken slaughter ritual 14:22 Germany launches nationwide crackdown on neo-Nazi youth group 23:57 Lebanese union to sue Israel for 'claiming ownership' of falafel 18:30 Nasrallah: We have not abandoned plan to avenge Mughniyeh 20:15 Vatican defends wartime pope against charge he turned blind eye to Holocaust 16:06 Delegation of Israeli doctors to Gaza denied entry 17:01 Left-wing terrorist turned neo-Nazi tried for Holocaust denial Previous Editions Select Day 09 oct 08 oct 07 oct 06 oct 05 oct 03 oct 02 oct 01 oct 30 sep 29 sep 28 sep 26 sep

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