Written by: Aaron Katsman | February 26, 2009
We all know the common economic indicators: payrolls, GDP, retail sales..the list goes on and on. But perhaps the most ‘real’ way of judging how an economy is performing, is based on amount of withdrawals fro ATM machines. This way you can get a ground level look at the economy is functioning.
According to Ynet: “In December 2008, an 18% drop was noted in the public’s cash withdrawal from automated teller machines, compared to December 2007. The average sum of money withdrawn in December was NIS 500 ($120), compared to NIS 600 ($145) last year and NIS 550 ($133) in July and August of 2008. The total value of checks used in payments in 2008 also declined, and amounted to some NIS 80 billion (about $19 billion) down from NIS 88 billion ($21 billion) in 2007. A particularly sharp drop of about 23% was noted in November and December. An 18% rise in the number of dishonored checks was noted in November and December of 2008 compared to the same period last year. An average 183,000 checks were bounced each month compared to an average of 155,000 each month for the same period in 2007.”
The numbers are not pretty, and point to an Israeli economy in much worse shape than the data indicates.
Written by: Aaron Katsman | June 5, 2008
Aaron Katsman
IsraelNewsletter.com
I posted yesterday about how a strengthening US Dollar could potentially benefit Israeli stocks that trade in the US. I was asked by some readers how come I think that the USD is poised for a rally? The answer…FIFO. FIFO is an accounting term that stands for ‘first in first out.’ With the global economy on the skids, the US was the first country to start having problems and with a vigilant Fed at the wheel, I think the US will return to normal growth in the next 6 months. After all, no recession occurred. The US has had no negative GDP growth quarters, and actually had a surprisingly good 0.9% GDP for Q1. Europe on the other hand, is just starting to show signs of a slowdown. I have heard analysts predicting a potential contraction of over 2% in European growth. That certainly will be bullish for the greenback.
I really think investors need to keep an eye on what’s happening in South East Asia. Asian stock markets like Vietnam rocked and rolled during 2006-07, unfortunately, steep market drops and a worsening economic situation may be a precursor to another Asian financial crisis like we had 11 years ago. Keep in mind that the Vietnam market has lost more than 55% during ‘08, and with inflation jumping, the currency has dropped. This isn’t just an issue in Vietnam. Countries like India, China, Philipines and Hong Kong are all in the midst of spiking inflation, and in the case of the Philipines and Thailand for example, sinking currencies. (Continue »)
