Subscribe to Print Edition | Thu., July 02, 2009 Tamuz 10, 5769 | | Israel Time: 02:42 (EST+7)
Haaretz israel news English
web haaretz.com
Haaretz Toolbar
Diplomacy
Defense Jewish World Opinion National
Print Edition
Car Rental
Books Haaretz Magazine Business Real Estate Focus U.S.A. Travel Week's End Anglo File
Share |
The bungee jump isn't over yet
By Hagai Amit

Anyone who has gone bungee jumping knows that the panic grows as you plunge downward and only eases as the rope stretches to its limit - and pulls you back up. Only after hitting bottom do you spring back more than half the distance you fell. But the rebound renews your panic, because next comes another free fall. And then you jerk up and down until you finally come to a stop.

Economists are now at this point of the rebound. Even after double-digit percentage gains since the beginning of the year, and even if another serious crisis isn't on the horizon, there is still too much uncertainty to guarantee a continuous rise in the markets over the next few months. Even those who accurately forecast events during the economic crises of the 1980s and '90s are still shocked by how quickly things have swung this time.
Advertisement

A 35% plunge in the markets within two months at the end of last year, and even worse, the collapse of so many major international banks like dominoes, led governments to initiate emergency policies.

Central banks lowered interest rates to zero and flooded the banks and industry with funds to keep them afloat. This time, as opposed to the 1930s, governments are abandoning free-market principles to keep the markets from falling apart.

The gains of the last six months result from all these steps - and because the collapse of last October and November was excessive and not based on the true economic situation. But just as the collapse was unfounded, so is the current recovery. The problems are still with us; unemployment and economic growth still point to a recession. Credit is still inadequate and too many companies have to pay off their debts. The effects of the government bailout plans are still unknown.

There is still too much uncertainty - and the markets know it.
PROMOTION: Mamilla Hotel
Bookmark to del.icio.us  
 
Photoshop republic
Blogger posts photo of pro-regime rally which appears to have been doctored.
Dead Sea, candidate
PA backtracks and supports Dead Sea in '7 natural wonders' contest.
Special Offers
Advertisement
hotel Jerusalem
David Citadel Hotel, come stay at the finest of Jerusalem hotels.
ISRAEL ARMY SURPLUS STORE
IDF insignia,Uniforms, Paladium Boots Watches, Israel Army T-shirts & Collectibles
Dead Sea Skin Care
Quality cosmetics from the Dead Sea. Coupon code HAARETZ for 12% off!
Eldan Rent a Car
Israel's leading car rental company offers you a 20% discount on online reservations
Junkyard
Junk a car - get free towing nationwide and a tax-deductible receipt
More Headlines
23:51 Netanyahu: Obama was right, U.S.-Israel bond unbreakable
18:11 Iran opposition: Election result 'unacceptable'
20:40 Naomi Klein: Oppose the state, not the people
23:58 IDF opens major West Bank checkpoint to Palestinian foot traffic
00:17 Rome gives honorary citizenship to Gilad Shalit
19:55 Thousands support Israeli doctor accused of complicity in torture
17:00 Palestinians backtrack, support Dead Sea for '7 wonders'
20:58 WATCH: Daily news round-up from Israel
23:55 Court: IDF must toughen charges for shooting of bound Palestinian
22:30 New task force rounds up over 300 foreign workers in Tel Aviv raid
18:43 Residents of northern Israel evacuate homes in the path of brush fires
23:56 Peres to Saudi King: Meet me in Jerusalem, or in Riyadh
19:11 Did Ahmadinejad fail again at doctoring photos?
Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Site rules |
| Israel 2009 election results | Makom: Engaging on Israel
| Search engine marketing
Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.
© Copyright  Haaretz. All rights reserved