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Last update - 00:45 16/09/2008
Experts: Israel heading for economic crisis in 2009
By Dafna Maor and Rotem Sella, TheMarker, and Reuters
Tags: TASE, Israel, Stocks 

Former Finance Ministry Director General David Brodet said on Monday that Israel's economy will continue to weaken into 2009.

"Israel hasn't yet experienced the peak of the crisis," said Brodet.
"It seems that 2009 is expected to be a cold and maybe even unpleasant year."
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Brodet's comments were echoed by Former World Bank official, MK Avishai Braverman, who said on Monday that Israel "will export less and therefore factories will start to close. Some workers will be fired, consumption will decrease,the quality of life will decrease."

The Tel Aviv Stock Exchange opened with sharp losses earlier on Monday amid the mounting financial crisis in the United States.

The TA-25 and the broader TA-100 dropped some two percent as it emerged that U.S. investment bank Lehman Brothers had failed to find a rescuer and was filing for bankruptcy protection.

On Sunday, the TASE also registered losses , although with none of the major indices falling beyond the one percent mark.

Worries worldwide about the financial crisis deepened after attempts on Sunday to find a rescuer for Lehman failed and troubled insurer American International Group asked the Fed for a lifeline, according to news reports.

The U.S. Federal Reserve also said for the first time it would accept stocks in exchange for cash loans and 10 of the world's top banks agreed to set up a $70 billion emergency fund, with any one of them able to tap up to a third of that.

But Bank of America agreed to buy Merrill Lynch in an all-stock deal worth e50 billion, seeking a bargain as the world's largest retail brokerage sought refuge from fears it could be the next victim.

"Lehman was one of the biggest names in banking, it's been around over 150 years. It survived the Wall Street crash, it survived the Great Depression but it hasn't survived the credit crunch," said Henk Potts, investment manager at Barclays Stockbrokers.

He added: "It's clearly serious but it's not systemic and it's not as much of a shock as some said it would be, so markets are down, but it's not meltdown."



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