Aaron Katsman
IsraelNewsletter.com

As the Israeli cabinet gears up to approve a controversial prisoner exchange with both Hizbullah and Hamas, I have been asked by some investors as to what I think the impact of the deal with be on the local Israeli financial markets. The answer is that while we may see a very short lived jump, as investors view this as precursor to future peace deals, I doubt that this will be a catalyst for a market rally. In fact over the long run this deal has the potential to cause serious damage to the security of Israel, obviously a negative for the stock market.

In a must read column, Globes editor Moti Golan blasts the deal. He believes that this deal will lead to more kidnappings of Israeli soldiers.

In the eyes of the terrorists, this deal makes Israel look very soft. Israel talks a lot but when push comes to shove, the leaders will cave in. For two years Foreign Minister and potential future PM Tzipi Livni, has been racking up frequent flier miles urging anyone who will listen to isolate Hamas. No money. No talking. No nothing. Then what does Israel do? Apparently, Israel negotiates with Hamas and cuts a deal that doesn’t even include captured soldier Gilad Shalit, which was a negotiating red-line just last week. I guess this is what happens when you start negotiating with terrorists. Obama, are you listening? (Continue »)

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