E Nothing Is Calm, Nothing Is Bright

In London, the day before Christmas is shopping heaven, so most people have to work. To make up for it the day after Christmas is a holiday mysteriously called Boxing Day, rumor has it because things are put back in the box to return them to the shops. It is also observed in former British colonies like Canada and Australia. 

We got into Gatwick Sunday morning without very much ado as the drone criminals were either arrested or not, but the winged horrors ceased stopping planes taking off or landing. We landed. Then we took a new link running exclusively from Gatwick to London Bridge where you can take the railroad, the underground, or the Jubilee Line. The much vaunted Crossrail, however, is not yet in place and will not be up and running as initially planned in 2019. As we went from one benighted ugly Essex neighborhood to the next on our railroad, it was clear why the locals may be rebelling against the airport or other sites set up in their area to serve richer people. The walls alongside the tracks were totally covered with graffiti, mostly just ugly lettering, with less wit than you get in the South Bronx. This is a protest against the railroad and I suspect the drones are a protest against the airport.

TASE Tasered

*Sunday saw a huge sell-off in Tel Aviv, a market which gathered more focus than normal as a harbinger of trouble on Wall Street, because Tokyo is shut for the Emperor's birthday for the last time on Dec. 24. (He is retiring Jan. 1 and the new Emperor has a different birthday than Jesus of Nazareth.)

Tel Aviv sold-off anything tainted by Wall Street, including an 8% drop in Teva, in part for technical reasons. The Israeli Central Bank, like the Swiss one, operates on the market to stop the currencies from becoming too strong, buying US dollars against shekels or Swiss Francs. The sums are then invested by the Central Banks in US stocks and bonds which account for ~20% of Israeli reserves.

The bank officials are not stock market experts and they are quick to panic when markets turn down and sell wildly. That happened yesterday in Tel Aviv because, besides all the usual confusion, a new governor of the CB arrived yesterday, Prof. Amir Yaron. By the time he was sworn in the damage was done. Israel lost about $2 bn in foreign currency reserves so far this year. Moreover, despite the strategy, the Israeli shekel gained against the Greenback Sunday.

Israel will hold parliamentary elections April 9. Netanyahu's majority is down to 1 vote and he can't govern. If he cannot get a majority in the Knesset he faces corruption cases after he steps down. This combines temptation and duty in the supporter parties. Sounds like the USA a bit.

On Monday the sell-off continued but at a more moderate pace, down about 2%. Teva lost another 0.44% Monday. It was the worst performer among our Israeli shares in part because it is the most liquid, but Compugen and Delek Group are also underwater in Tel Aviv over the past 2 days, by 8% and 4% resp. The latter lost over oil price moves. Whether Wall Street will follow the TASE trend is unclear but the opening was downward.

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William K. 4 months ago Member's comment

Interesting indeed. Interesting interpretations as well.

Mark Borkowski 4 months ago Contributor's comment

Vivian Lewis provides some good information on selected companies and stocks. She profiles a few winners and most of the notable loosers. A summary of some political events and more. The message that comes through in a non descript way is that the military goods market is good and healthy and that "peace on earth is not in view". Pity.

Danny Straus 4 months ago Member's comment

Always impressed by your knowledge of the Israel market, and #Teva in particular. $TEVA