Monday, November 25, 2013

Israel's Bell Curve Spread: Between Populism and Elitism

If you follow the economic and lifestyle stories on Israel's main media outlets, you get a mix of split personality opinions. I say "opinions" because some media stories are not really objective reporting as much as opinion of one expert or another. Sometimes the media outlets are simply a propaganda channel to one politician or another. Which seems to be just fine in the eyes of most Israelis. Lately, besides Bibi's harping about the Americans not taking the Iranians seriously enough (with the supposedly "just around the corner nuclear bomb making drill") most politicians, from proper ministers all the way to Ron Huldai (Tel Aviv's mayor), is the wide economic gaps everywhere. It seems like the Israeli economy is one big Swiss cheese of a system. The mix of socially based and merit driven realities clash each other. Then there is the old school cronyism in friction with simple family centered oligarchy. Some going back a century (Teva pharmaceutical) some just a few decades (Tshuva family / oil and gas). Then there is the continuous scratching between organized labor and private management. This goes on in the private sector as well as in public service (physicians, nurses, school teachers).


Monday, September 30, 2013

Middle Class Consumerism: Strong and Steady

Doughnuts sold as the latest fad from the US at a local bakery

If you take a stroll through a mall or visit a new apartment construction sales office, Israel feels more like America in the 1970s or Spain in 2000. For that matter probably Moscow or Beijing or even Rio De Janeiro of the last decade: strong economic growth and growing consumer spending driven by new credit policies. In Israel, large mortgages were unheard of fifteen years ago. Today, a couple with steady income record can get 50% montage without too much trouble. The banks have flooded the market with so much cash, housing prices have been on the rise regardless of supply and lately regardless of geographic location inside Israel. Even apartments if remote towns are rising in prices while supply is plentiful. Builders simply "up-sell" by loading up large apartments with high end finishes. The same goes for consumer products. There are more luxury malls and luxury shops everywhere. Just recently the luxury Italian car companies Maserati and Ferrari hung up their brand symbols on a central Tel Aviv building (just across from the central train station). If you want Rolex, go down to the new luxury building on Ibn Gvirol, a street considered tired and rundown just five years ago. The push by the market is not limited to luxury items. In the middle areas, there are even more signs of strong growth and credit use.


Sunday, September 15, 2013

Remembering After the War: The Children of the Winter of 73

"We are the children of the winter of 73 ...

"You promised a dove, an olive branch, 

"You promised peace, at home, you promised spring, blooms  "

This controversial song is raising old memories and complaints about the balance between hope and reality. When the two clash, like during and after the Yom Kippur war, idealism about peace and promises to children, seem like something cruel or at least out of touch with reality. Then there are the voices who claim to never believe the naive view of "peace next year" propaganda songs (especially from IDF musical groups). Regardless of your views or beliefs, the wars in Israel, hard and painful, Israeli military bands perform incredibly nice, to the point of "too nice" (syrupy sweet some would describe them) for a band that suppose to motivate troops to the front. Here in Israel you will not find anything close to a Russian army chorus belting out propaganda songs a-la-World War II. You will also not find the European or American brass bands leading a long march of well heeded marching units. So what is this Israeli style army bands suppose to do?


Tuesday, September 10, 2013

40 Years To Yom Kippur War

Israeli newspapers and TV/radio stations are running stories about the Yom Kippur war (1973). A war that was not popular and to some became a slap in the face and the first real loss for the state. More frightening, the war that saw the IDF losing soldiers and territory. To the Israeli public, in all the years, neither the military nor the government ever explained and analyzed the war. Once the government in charge was voted out, everybody wanted to make the war go away and move forward to better times.


Thursday, September 5, 2013

Israel's People & Technology: PRISM in Israel

Graphical representation of Israel's electronic snooping story: People & Tech
Israel's technology site "People and Technology" reports on security expert's' opinion of Israeli's privacy in the electronic world as exposed as in the US. After the public exposure of the PRISM system in the US by Edward Snowden, technologists from around the world are wondering how much of their information is in their government's data banks. Or even more disturbing: how much information is in the NSA, CIA, or other American security agency's from "my own" e-mail and internal data? In Israel it goes without saying that the state and its security organizations snoop on potential security risk suspects. Israel is not only under physical attacks, virtual electronic attacks are also a daily part of life here.


Monday, September 2, 2013

Israel Aerospace Industries Launches Amos 4 Communication Satellite

Israel Aerospace Industries Amos 4 Communication Satellite - Sept. 2013
Today (Sept. 1, 2013) Israel Aerospace Industries launched Amos 4, the most advanced communication satellite deployed to date. The 4.2 ton satellite will give Israel a unique position as a communication supplier in Europe, Asia and Africa. Amos 4 will give Sapcecom, the operating company, capability to supply the Israeli government as well as private and governmental customers high bandwidth communication for TV, telecom and Internet services. In addition to traditional broadcast capability, traditional communication services into rual areas. Israel, is one of the leading service providers racing to give governments in Asia and Africa the ability to connect rural areas without the expense of large terrestrial wired and radio based networks.  

Friday, August 23, 2013

Should You Kill, Break Your Creed, or Start A War To Save A Life

Syrian gas attack reported by French newspaper Le Monde, August 22, 2013
Israelis are yacking and quacking about the killing all around us. In Syria the killing is beyond belief, yet there is very little action and even less criticism of other countries' silence. The Americans (in the form of president Obama) are criticized for not making good on their promise to act. Some countries are calling for support of rebels in the form of "No Fly Zone". This is what tipped the balance in Libya. Yet no real action from the Americans or the UN. In Israel the leadership is calling for careful and distant treatment of war activities in neighboring countries. Israel is still fearful of long term commitment like the eighteen years spent in Lebanon. Then the second Lebanon war which started out on basis of one cross border incursion. At this point in time, the Israeli street, especially here in Tel Aviv, does not have the appetite for another war.


Wednesday, August 21, 2013

The Politicization of Israeli Economy and Foreign Investment

Rosa Parks with Martin Luther King Jr. - unintended speaker of truth...
This topic would not have come up in my writing if not for a recent comment by UN secretary general in his visit to Israel (see: According to reports, Ban Ki-moon said to students in a speech a few days ago:
“Unfortunately, because of the Israeli-Palestinian conflict, Israel has been weighed down by criticism and suffered from bias and sometimes even discrimination,” UN Secretary General Ban Ki-moon admitted during his visit to Jerusalem, according to the European Jewish Press (EJP).
This admission is good news to Israelis which have been complaining about negative bias no only in the UN. What seems like a new revelation, is the secretary's explanation which amounted to something like “what do you expect, after such long and bitter Israeli-Palestinian conflict”. Israelis are accustomed to negative bias from foreign government (and government representatives). Israelis have experienced with bad treatment when visiting foreign countries. Even treatment at embassies representing foreign governments IN ISRAEL, have been known to treat Israelis badly. Is this a new step in honesty from UN officials? Will UN officials be able to limit discrimination from member states? At least in the UN?


Wednesday, August 7, 2013

High Price Apartment Solution: Higher Mortgage, Lower Interest, Easier Credit

Gindi, a leading real estate developer, market luxury in Tel Aviv (Israel)
As Israel's real estate prices soar, banks are not sitting by the sidelines. Banks are making home buying easier than ever before. Israelis are taking more debt, at a faster rate, worrying the central Israel bank regulators. Yet Israeli mortgage is not as leveraged as the US and European markets were when the real estate bubbles collapsed there. While Israeli regulators and policy makers (i.e. government agencies) are worried and taking steps to lower the market's exposure to collapsing prices, Israelis are still following the path buyers in the west went down before. Are Israelis not aware of the danger in taking high percentage mortgages? Are Israeli banks unaware of the risk in a collapsing housing market? What about the regulators and policy makers, are they not aware of the economic collapse due to real estate bubbles? Well, it is not the case of now knowing or misunderstanding. But it is a case of “this happens to others, not to me” (or to “us” here in Israel). We call it the “ostrich behavior”, stick your had in the sand when you are being chased. You don't have to be Australian to understand the ostrich analogy. Pretty much every western culture understand ignoring reality and hoping not to fall in the same situation as others. Just keep on ignoring things enough, and hopefully things will take care of themselves.  

Monday, August 5, 2013

Israel's Public Relation Battle With The Diaspora: A Loosing Proposition?

Taglit is great for the "Next Generation" / What about THIS ONE?
A unique organization called Taglit started thirteen years ago. The organization gave free trips to Israel to young Jewish people who were not in the Jewish community. This may sound a little strange, and initially it was. The idea was to expand the true knowledge of Israel among Jews who were not particularly interested in Israel. Focusing on the “next generation” was a tactic to sell the idea more easily and to implant a seed in the generation coming up no just in the Jewish community. The idea took a few years to take hold. Today, Taglit brings over 50,000 people a year to Israel. Also, initially mainly targeted at the US Jewish population, which has over 50% of Jews not associated with any Jewish community activity, the program is even more successful in the rest of the world. Particularly in small Jewish communities with a population who wants to be associated with a Jewish activity but simply does not have the means. In some Latin-American countries, up to 90% of the young Jewish population who qualify and want to make the Taglit trip, end up coming to Israel.  

Sunday, August 4, 2013

IDF “Kirya” Command Base to Become Israel's Highest Building

Main tower dubbed "Toblerone" is made up of triangle tubes like the chocolate
A plan to turn the “Kirya” IDF command base to high rise towers was released last week. A project plan with the tallest building in Israel, 80 stories high. With additional three buildings housing commercial, office, and residential space. The project is nicknamed Toblerone after the triangle chocolate. An eighty story building made up of Toblerone looking triangle long sections tied together. Three additional buildings, one for offices and two for residential apartments and commercial areas at the first floors are also planned. The project answers the question Tel Avivians asked for decades: “when will IDF move out of Tel Aviv?” At least when it comes to a corner of the base, the answer is a few years. We have not seen a statement from the IDF, but that may be just a matter of waiting a little. The construction project, due to it's location and large size, is managed by the Israeli land authority. This is a unique situation of a semi-government agency, which manages most of the land in the state, directly managing a construction project. Only time will tell if the land authority works as efficiently as private construction companies.  

Thursday, August 1, 2013

Gindi Tel Aviv Old Wholesale Market Project

Gindi's Givon / Old Wholesale Market project is one of Tel Aviv's biggest
In a central part of Tel Aviv, a large parcel of land from the old wholesale market is in the midst of construction. One of the last large pieces of land in the middle of the city is being turned into a luxury complex befitting the fast and furious 1990s and 2000s. Decades with flair and decadence not seen here for a long time. In an effort to make a large project safe for investors and worth the opportunity, Gindi and city planners are designing a whole luxury neighborhood. The complex includes parks, schools, retail spaces, all at a luxury level only seen one building at a time. The project was conceived at the peak of euphoria in Tel Aviv real estate luxury development era. It is still left to be seen if such a large number of luxury apartments can be sold all at once. Yet, the developers and investors seem not to worry, as construction is going full tilt.

Sunday, July 28, 2013

Tel Aviv Stock Exchange: Stagnant & Reeling

Tel Aviv 100 Stock Index: Stagnant? Or Irrelevant? What's Next?
All the top management of the Tel Aviv Stock Exchange has resigned. According to "Yediot Achronot" business section (Mamon), the top brass has been at odds with the government's top regulator. It seems like reality is a bit more complicated. The Israeli stock market has been experiencing a slow stagnation for the last three years. Not necessarily because of the underlying business condition, business has been good in Israel. Most of the blame goes to the commercial bond market. The last five years, Israeli companies preferred issuing bonds rather than stocks. Partly a consequence of heavy regulation on common stocks, reflecting a change in policy of encouraging more competitive (individual) stock ownership. Israel, with almost an oligarchy economy, ended up with a stock exchange dominated by a small number of "ownership groups". Another factor in the drop of trading volume on the Tel Aviv stock exchange is the steady drop of foreign investors. Foreign funds prefer larger exchanges with deeper trading. When things go sour, it's easier to get out.

Wednesday, July 24, 2013

Cleaning Up Financial Speculation Mess: Will It Affect Israel's Sound Business?

Nochi Dankner is today's financial shenanigan villain
If you follow the Israeli business papers, it seems like every week, some banker or fund manager is accused of some wrongdoing. There was a case of the “Israeli Madoff”, a broker who swindled about a hundred investors of millions. There is a case of Bank Leumi, Israel's oldest bank, announcing a write-down of a three billion shekel loan to Nochi Dankner's IDB companies. There are questions of sudden loss of value in the most conservative private retirement accounts in most Israel's biggest companies. In general, it seems like strange things are happening, yet regulators and senior executives are vague about what exactly happened. Israelis react in a wide range of responses. There are the angry and vindictive type, asking to prosecute finance executives as common criminals. Others are more philosophical, essentially accepting the losses as part of the risk of investing in any retirement fund involves in market speculation.

Monday, July 22, 2013

Netanyahu and Kerry: Do Israeli Leaders Lead? or Follow? Does Israeli Public Opinion Push Politics?

Israeli Cabinet 2013 / Are we following leaders? or LEADING them??
News of John Kerry's accomplishment in bringing Netanyahu and Abbas to negotiate again comes dry over the radio. Today it almost sounds like a war breaking out or another suicide attack. Somehow, certain political news sound all the same. You get the feeling, that this news clip will be used over and over again when we look back on today as history. It brings back the coffee house banter I hear on Tel Aviv streets on who is leading and who is following. Netanyahu's first term four years ago seems like a new chapter in Israeli politics. The right wing Netanyahu with Lieberman, the side kick, had the solution for the Palestinian problem: go tough, don't give in, make security the top issue. But the Palestinians didn't play along. They went under, attacked from Gaza, and got world opinion to swing in their direction. That didn't work out so well for Netanyahu. The last elections, Netanyahu did not promise easy solutions. He followed Lapid and Bennette with a different message. The idea is to listen to the people and have them determine what is important in politics. Now Netanyahu is offering a referendum to decide.

Saturday, July 20, 2013

Trouble With Fast Economic Growth: Growing Socioeconomic Gap

Iron Dome military system has implication well beyond a security system
The last two years, Israel's educated middle class started protesting a widening socioeconomic gap. This gap, seem to be widening every day, is more visible in the upper middle classes. Upper classes brought about by strong economic growth in a few small sectors. There are many more luxury apartments going up, more new luxury cars on the street (new Ferrari and Maserati dealerships), and many more shops with items not seen here before. But there are also difficulties to some which are also a new surprise to many. College educated and well trained professionals are no longer assured a well paying job and a comfortable middle class lifestyle. As the number of luxury high-rise apartments is going up at alarming rate, it seems like everybody is enjoying this great economic growth. But as you look more carefully, that's not the whole story. In market segments where the economic growth is concentrated, like construction, high-tech, finance, and luxury retail, the benefactors are not necessarily “yeled tov Yerushalayim” (a good boy from Jerusalem), well educated middle class professionals.

Thursday, July 18, 2013

Israeli Start-Ups Get an Edge With UI/UX Expertise

Last night, at The Hub, Barak Danin ( ), a UI/UX expert gave an introduction talk to a sold out crowd. Sometimes we forget how enthusiasm does not completely make up for experience. Israel has a desperate shortage of specialized skills expert. With a strong technology start-up field, UI/UX is a crucial specialty needed to produce successful product the first time out. Yet, as with many key specialties, not many technology entrepreneurs are familiar with UI/UX in product design. The good new comes from seeing Barak Danin spreads his message with ease which only comes with 17 years of experience.  

Wednesday, July 17, 2013

Hot Weather Kills Babies 3 Days In A Row

Cover page of dead overheated baby story - Israel Ha'yom - 16-July-2013
The last three days, three babies were found dead in their family car. They died from suffocation inside a closed car left in the sun. The number of incidents is so high, it is in the front pages. Is it hard to understand how a father can forget his one year daughter in the car? Then it's harder to understand how three fathers forget three days in a row. These kind of deaths are not new in Israel. It has happened in the past. Death of babies by parent negligence is jarring. Death by forgetting a baby in the car on the way to daycare is even more revolting. One is not sure if to blame the parent, and charge him with the child's death. Or to commiserate and feel a parent's anguish. The police does not recommend to prosecute a parent in these cases. The though is, a parent losing a child in this kind of event is punished enough.

Tuesday, July 16, 2013

Start-up Attraction: ScaleIO and Alvarion: Two Different Tech Exits

ScaleIO was sold recently for $200 million, giving it's founders, owners of 30%, $60 million. Not a bad exit for a new start up. On the opposite side, Alvarion, a publicly traded wireless equipment company is breathing it's last gasps: a bank is taking the company into receivership. Exits in tech start-ups are like watching a slow baseball game. Sometimes they turn exciting, the rest of the time the game is slow and sleepy. ScaleIO is a software only company. This is the kind of bet most Israeli entrepreneurs like to make. Most of the effort is in the code and the marketing. Building real hardware takes more time and usually much more money. Selling something that requires samples and stock is also more complicated. Software is easier to sell from Israel, especially if the target markets are Europe and the US. To contrast, Alvarion is almost completely a hardware company. They are also in a highly competitive networking sector. To add to this, Alvarion put their effort into Wi/MAX, a new format of wireless networking supposedly covering a wide area and solving some problems in WiFi we use today. I don't want to go as far as saying that software only start-ups have a better chance of success than hardware only. It is much more complicated than this.

Monday, July 15, 2013

Can Central Moderate Politics Save Israeli Frustration?

The current Israeli political coalition was elected on serving the “average Israeli”. A kind of answer to the extremist views of the right and left politics of Netanyahu's previous term. But with this central view, come mostly moderate politics. This seems to be the “modus operandi” of the current Lapid/Bennette coalition. The last few elections, Israelis were told to go extreme. Either right or left, the only solutions to the hard problems: Palestinians, economics, equality, and socialism versus capitalism was in strong single minded policies. So came the Netanyahu/Lieberman coalition. While they took extreme right wing policy direction, the really hard issues were not dealt with at all. Palestinian related issues were simply ignored (maybe that was the policy), the economy slowly spiraled downward (maybe the was the fault of international economic dependence), equality in many areas went out the window (an the trickle down theory with it), and the idea that capitalism can save the day no matter what, turned out not such a great idea (even the rich can lose their money and wisdom). So came Lapid and Bennette (together with Livni and Yechimovich) and offered the middle class what seemed to be the right things. The argument was, right wing politics takes care of the fringe population: the orthodox and the settlers. So the “new” middle ground will take care of the majority in the middle.

Sunday, July 14, 2013

High Cost Tel Aviv Properties: A Continuing Trend

NOT Tel Aviv, city of Mt. Maunganui, Not the expensive real estate of Tel Aviv (from
Tel Aviv is one of the most expensive city in the world to buy a property. This has been the story until 2008, when many of the world's economies collapsed and comparison costs stopped coming out. The economy here also slowed down, not exactly a collapse. What makes Israeli properties so valuable? One explanation is supply and demand. Tel Aviv central zone was built quickly in the 1920s and 1930s. Small apartment buildings, four stories high with two bedroom apartments was the standard. Then in the 1950s, the rest of Tel Aviv, to it's borders was filled in. Flash forward to the 1980s and 90s and demand (and available money) is pushing apartment prices up. This drives steady new luxury construction. Since Tel Aviv does not have readily available open land for construction, whatever land is available is expensive. An alternative to open land, replacing old buildings with new one. This technique is called “clearing / building” (pinui / binui): clearing existing property, building new one.

Thursday, July 11, 2013

Who Buys Apartments in Israel?

The Israeli real estate market is an attractive investment. It's been that way for at least a decade, some say even longer. Foreign individual investment is so prominent, it's been blamed for the shortage of rental apartments in Jerusalem, the high price of apartments in Natanya, and the shortage of low cost apartments all over Israel. Putting blame aside, let's look at who buys apartments in Israel and what it means to their owners. From a quick, unofficial (personal) survey, I see foreign apartments buyers in these categories:
  • High income individuals interested in Israel
  • Zionist and Jews (a few Christians) which travel often and support Israel
  • Jews in areas of stress interested in immigrating to Israel (French recently)
  • Individuals familiar with Israel and with international investment aptitude

Wednesday, July 10, 2013

The Noisy Israeli: Shouting and Screaming In Daily Life

If you just got to Israel, your first big surprise may be shouting and screaming on the street. Yet, Israelis seem to feel perfectly fine in carrying a conversation in excited high volume levels, and bordering on the violent. Sometimes you may see two perfectly normal adults screaming at each other as if they are ready to duke it out, just to turn completely calm minutes later. The ability to “take it” and “dish it out”, accept screaming and scream back, is something that most foreigners never gain. It is also something that separates some Israelis from others. This conduct is not for everyone. There are plenty of native Israelis who choose not to partake in this practice. Yet, there is still plenty to go around, so keep your ears (and eyes) open and be careful not to take it personally.

Tuesday, July 9, 2013

Soldiers' Stories: Exciting-Normal Life Revealed

One of Israel's unique life is the military service. Almost everyone serves in the military. Not many in elite front-line units. Military life is not at all what foreigners imagine. For the most part it breaks down to training in everything from shooting guns to fixing airplane electronics to painting tanks to training others how to obey orders, take responsibility and march in formation. One way to learn about Israeli life is to read diaries and blogs of soldiers. Even on Facebook and Twitter you can find daily updates of soldiers' life. It is interesting how “normal” these stories turn out to be. While learning how to be a sniper is not that normal in an eighteen year old's life, still, Sarah Drill (see: My Life in Israel ) blog reveals many of the hopes and dreams of an American girl doing military duty in Israel. Hint: she becomes a sniper and a sniper instructor (probably not what her mother imagined her life to be as a “good Jewish girl” from America).

Monday, July 8, 2013

Buying Luxury Apartments in A Group Project: Bavli Project Offer

To reduce the cost of luxury apartments, a scheme of building and financing with a group is an alternative to buying from a traditinal builder. A general contractor organizes a construction “project”. The organizer, finds land, hires an architect and selects a builder. Then they offer apartments for sale in the project. In the early stages, before many units are sold, the project organizer does not spend a great deal of money, until she is sure the project will actually be done. For the buyers, the apartments cost less, up to 20% less than equivalent units in the same area sold by traditional construction companies. In general, it has been claimed that building using contractor projects are slower to be finished and sometimes are not as luxurious as ones built by traditional builders. Usually, construction groups raise money for each unit gradually as the project progresses. This may help buyers pay or raise money for a more expensive unit. In Israel, this scheme is still not a large part of new construction,  yet it is a good laternative to some buyers.

Sunday, July 7, 2013

Israel's Arduous Socialism to Capitalism Saga: IAI Baharav leaves

Israel started out as a socialist state. Without going too much into history, Israel, as it was first settled by European Zionists, was organized around independent organizations. From buying land, organizing settlements, providing medical services, to the general organization of the labor in the community, all were based or influenced by the socialist movements of Europe. At the early years of the immigration, from 1880s to the 1920s, the socialist organization structure worked well. It was also appreciated by many of the immigrants, mostly because it seemed to succeed. The community was growing and quickly evolving into a cohesive culture. But the socialist dream was not everyone's. While settlements in the kibbutz movements were pure socialist manifestation, Tel Aviv and other small settlements were growing as well. These were traditional western structured settlements. Some were cities (Haifa, Jerusalem) while others were agricultural settlements (moshavim). Essentially early on, Israel was built on two economic structures: socialism and capitalism.

Saturday, July 6, 2013

Two Start-Ups, Different Fortunes (Money and Passion)

“The Globes” (Israel's Business Newspaper) ran a story about “Boxee”, a start-up purchase (see: Globes story ). In this case, Boxee has not returned any profit to it's investors or employees. It seems a little wasteful to work for six year (the company was founded in 2007) and in the end have value of the invested capital as the sale price. Yet in the world of high-technology start-ups, this is not the worst outcome. Actually, this is probably one of the good stories to be told. Since most start-ups do not produce more than one generation of product and close without selling their intellectual property or operations. Contrast this with the large, $1.1 Billion purchase of Waze to Google just a few weeks ago (see: Ha'aretz story or Time Story). Here, the $67 Million investment, returned 16 times to it's investors. These are the fortunes of Israeli start-ups. While the amount of ingenuity and industry ends up as unique and innovative products, their fortunes differ widely. Israeli entrepreneurs are well aware of the risk involved in starting a company and taking millions of dollars from investors, especially in the venture capital market.

Friday, July 5, 2013

Europeans and Americans in Israel (moving here)

One of Tel Aviv's hidden secrets is the number of foreigners living here. Despite the image of dangerous and racist spewed by international media channels, people somehow find the more moderate view of a vibrant and friendly city. Europeans and Americans are seen and heard on Tel Aviv streets, and are obviously here to stay and not cameras toting tourists. A few conversations with these foreigners reveals the reasons they come and live here. My quick unofficial survey revealed the following reasons to live in Tel Aviv:
  1. Love for Israel or Tel Aviv (with or without previous experience).
  2. Attracted by a family member, a romantic someone, or a close friend.
  3. Attracted by nationalism (Zionism), spirituality (Judaism, Christianity), or idealism.
  4. Attracted by a job, climate, or culture (multiple visits or a friend's recommendation).

Wednesday, July 3, 2013

Luxury High Up: High Rise Towers (in and around Tel Aviv)

Tel Aviv skyline is still pocked with tall construction cranes, even after two decades. Yet developers seem to find a few open lots to build large buildings. The latest large construction area, just north of the main train station (Sovidor / Central station), is at it's final phase of construction. An extension to one of Tel Aviv's old upscale neighborhood (Bavli.) Also, in other areas of Tel Aviv and surrounding towns (Givatay'im, Ramat Gan, Petach Tikva) high rise luxury apartments are being built at a steady pace. These buildings are typically 20 stories or more high (up to 39 stories.) In these new towers 2 to 3 bedroom apartments, on average, sell between 2 to 3 million shekel ($550 to $830 thousand.) Design is similar: finished in glass and white stone exterior. Interior is modern in an open floor plan unique to Israeli design.


Sunday, June 30, 2013

Israel's mobile market: catching up with price wars

Israelis are some of the chattiest mobile users. They are also a bit gadget crazy. But until a year ago, mobile service prices were about 2 to 3 times what they were in Europe. Nobody could explain this. There are three large mobile service providers: Pelephone, Cellcom, and Partner (Orange). So it wasn't the problem of competition. While prices for service and phones was high, Israelis still kept on blabbing and paying (average of 250 shekels a month, about $70). A year ago (May 2012) Golan Telecom started business by offering “all you can use” monthly packages for 99 shekels. This offer shook the mobile operator market and soon the main operators started offering even lower price monthly packages (down to 70 shekel, about $19). A year later, about half of the Israeli mobile phone users have switched to the low cost packages. This is to some concern to both operators and government regulators. Mostly because it means that half of the users have older packages and are probably paying much more (the old rates, before Golan came out.)  

Saturday, June 29, 2013

Luxury Homes in Green: Gardens and Parks (in the city)

The first impressions of Israel people remember is “the green”. It surprises Europeans and Americans, who come from wet climate, to see so much green foliage in a semi-arid environment. Israel's history explains the obsession with making the land green. So today, one of the luxuries in living is having a private garden or living close to a public garden. The ultimate luxury is a private garden, no matter how small. From a few large pots on a balcony to a piece of land enough for one large fruit tree. All the way to living at the edge of a public garden (similar to American obsession of building at the edge of a private golf course.)

Friday, June 28, 2013

Opportunity for Americans: Israeli Luxury Home Market: Turning Normal?

Israeli real estate market has been in an upmarket phase for over two decades. Luxury homes and apartments were the engine that drove building and architecture fields into a strong and growing market segment. Luxury construction has even become a vital export segment. Israeli architects and builders are exporting construction services due to their luxury construction experience. Finally, luxury construction has been a key Israeli success story, to the point, of attracting investors and individuals to buy homes in Israel, bringing in dollars and euros. With all that, it seems like the luxury propery party is over, or at least taking a rest. Luxury apartments in the Tel Aviv area are not selling in 2012 as fast as they did earlier. Also, high visibility projects with very high price units (above 100 million shekel per property, about $50 million) are also sitting without much interest. (where are Ellison, Brofman, and Adelman when you need them?) 

Thursday, June 27, 2013

100 Days to Lapid and Bennett Governing REVOLUTION!

Yesterday (Tuesday 25-June-13) was the 100th day anniversary of Yair Lapid's and Naftali Bennett's in office. Israeli media and government has taken a page from the American administration change: promise to make sweeping changes in the first 100 days in office. After all, if you have an agenda and you think you can change how government serves the citizens, you should be able to do something right away.

Tuesday, June 25, 2013

Economic Wows: Between A Social Contract and Adam Smith

Israel's economic state is in a constant state of change. Israel's economy took a turn for the worst in the last four years. There are two culprits for the change. The first is Netanyahu's government liberal spending both on infrastructure and on social benefits. The second is the global downturn, mostly the downturn in Europe. Contrary to general belief, Israel is not yet in the category of a developed country. While there are many similarities with European and developing countries (i.e. BRIC). As BRIC block countries are making  fast economic progress based on vast natural resources and progressive economic changes, Israel's economic progress is strictly based on high productivity and structural advantages. The difference between Israel's economic progress is clear to see over the last decade. While Israel's economy has grown by 4%,most BRIC growth rate ran an average of 8% with up to 12% in China some years (China 10%, India 9%, Brazil 4%, Russia  7%; average yearly GDP growth 2003 to 2013).


Thursday, April 4, 2013

Let There Be (Natural) Gas - Israel's First Gas Starts Flowing

You are not reading about a new interpretation of Genesis creation story. The title is a pun on news of gas starting to flow into Israel's electric company from Delek's Tamar gas field. It should be the biggest story on the news, but barely got a mention in the press. Did Israelis stop caring about energy cost? I don't think so. It's simply old news here. When natural gas was discovered two years ago it was big news. The media found all kind of commentators predicting the great Israeli energy empire (a few comparison to our Arab neighboring states were buzzing around.) Then came the two years of building terminals and pipeline. So now, this old news has turned into "it's about time".

Sunday, March 31, 2013

Obama Dazzles and Shakes

US President arriving in Israel, March 2013, courtesy Israel police web site

US president Barak Obama came for a visit. That's not really news any more. Yet, the visit, has brought a new understanding of the shift in Israeli public opinion. The elections just over a month ago indicated a shift from international focus to domestic issues. Also, a strong shift in opinion from Benjamin Netanyahu and Avigdor Lieberman's right wing issue to more domestic central stance. In general, that puts the Palestinian peace negotiations behind domestic economic concerns. To outsiders, like US president Barack Obama and secretary of state John Carey, there is some concern of missing an opportunity that will not be coming back for the next four years. But there is no denying how a shift in the Israeli public's opinion is completely missed outside the country.