Dear rss free blog,


L’shana tova. Frida
Ghitis writes from Israel:

Israel’s economy is not growing at a break-neck pace, anyone who
thinks the world is int near-depression should take a stroll down Tel
Aviv’s trendy Dizengoff Road, or visit any of the always-busy
markets here. In an hour the entire country will grow quiet with
everyone heading home to celebrate Rosh Hashana, the Jewish New
Year. The hush at sundown will break the bustle that shows Israel’s
emergence from recession. But there’s catch.

of Israel governor Stanley Fischer, a former IMF chief economist,
raised the key interest rate to 0.75% in late August, the first
central banker to do so after the start of the credit crisis. He
noted that the economy had started recovering so inflation is
becoming a concern, exceeding BOI targets. A risk is that boosting
rates also boosts the Shekel, and a strong currency could end the
nascent recovery. If the Shekel is too strong, some Israeli holdings
in the Global Investing portfolios could take a hit.

is playing a tricky game. While he raises rates, he is also buying
dollars to cool the Shekel, whose exchange rate has grown absurdly.
Prices in Israel are high for everything, a sign that the currency is
over-valued. An overpriced Shekel could trip up two of Israel’s
most important foreign currency earners: exports and tourism.

which had been growing steadily until last year, are expected to drop
more than 10 % in 2009. And tourist arrivals, which reached an
all-time high in 2008, are also down, despite some H2 improvement.

Israeli economy is starting 5770 in promising shape
but, as always in Jewish perspective, there are concerns. Apart from the rantings of Mahmoud Ahmedinedjad,
rockets from Lebanon (last week), and a bad neighborhood, Israel
needs the rest of the world to recover to sell Israeli products and
visits. Moreover, Israel has to figure out what to do
with the hundreds of millions of newly-purchased dollars worth less every day. Maybe it’s time to buy Euros. But that’s
for another day. For now, it’s time for the traditional honey and

in Indexland note: today’s Financial Times reports that the
FTSE index has dropped Icelandic shares because the currency has
fallen so far that its market does not meet capitalization
requirements for inclusion. Of course, that will push Icelandic
shares down even further. I happen to own one, deCode.

FT also says that the risk of flowback means that Kraft will
have to keep Cadbury listed
in sterling and pay dividends in pounds to stop a selloff in KFT
shares used to buy the British chocolatemaker. In a flat world, indexes
are national and index-tracking investors, including funds, buy and
sell to match the benchmark they are tracking.

a fund flows tracker, yesterday reported that investors withdrew from
money market funds and allocated proceeds to developed market equity
and bond funds last week. The Cambridge MA
says that there was a lot of catch-up going on in the week to Sept.
17 into neglected areas like g
and emerging market bond funds, real estate funds, and global equity
funds focused on developed countries.

emerging markets also took in more money for the 9
straight week, the big news is that Japan and Europe equities funds,
which had failed to get that much new money after the market crash,
are now also luring money in.

is coming to an end. As EPFR’s Brad Durham wrote: “Overall,
investors pulled $47.2 bn out of money market funds during the week,
the second biggest weekly outflow this year.” This, he adds,
“brings total year to date outflows to a staggering $331.9 bn, or a
little more than 10% of their assets.”

thinks there has been “a re-rating of Europe” favoring both
financial firms and exporters thanks to signs of a US recovery. As a
result, “Europe equity funds absorbed another $1.2 bn during the

there were two weeks earlier this year when this fund group posted
bigger inflows, in both cases those flows were driven by tactical –
and quickly reversed – moves into ETFs focused on Germany,” added
EPFR’s Global Senior Analyst Cameron Brandt. “This week’s flows are
broader based and represent a much more real vote of confidence.”

freshwater reader, Chicago broker RL, sent me a message really
intended for Paul Krugman:

very simple; lower taxes on risk takers and watch government revenues
go through the roof just like they did for Bush when he took over the
recession that Clinton left him. This way the liberals will have the
revenues to give to their pet organizations (i.e. Acorn) so they can
advise prostitutes on how to get mortgages. Maybe students aren’t
getting exposed to Keynesian ideas because they don’t work.

has even been dropped by the liberal fraternity after its staffers’
brothel advice. As for RL’s recipe based on Bush II being better than
Keynes or saying the recession was left by Clinton, no comment.

later cooled down and expressed gratitude for my stock-picker team. So even if he does pack a pistol he probably won’t
aim at me.

he is from Chicago, I want to remind you that I worked on Capitol
Hill for the Minority (Republican) side of the Senate Foreign
Relations Committee. My boss was Clifford P. Case of NJ, a saltwater
liberal Republican. Another person I reported to was Sen. Chuck
Percy of Illinois, as freshwater as RL, but a liberal.

was reproached by a subscriber because GE
was not added to the Model Portfolio in Mar. Of course not: GE
is not an ADR. I told you all when I bought it because I thought it
was a good idea. When I took some
profits I also told readers; this was when I was “day-trading.”

Teva Pharma executive attacked Congressional bills that would tax the
generics industry and keep cheap drugs from the market, Dow-Jones
reported. “I think it is a problem to be taxing the very people
who are giving the savings,” said Bill Marth, CEO of Teva North

proposal to overhaul the health-care system released by a Senate
committee Wed. would boost the rebates generic drug companies have to
pay to the government to help cut health-care costs.

increased use of generic drugs and biologic medicines could save
Americans billions of dollars, there are obstacles. At the Washington
Generic Pharmaceutical Association (GPA) annual meeting yesterday,
HHS Sec Kathleen Sebelius and Deputy FDA Commissioner Joshua
Sharfstein reiterated Adminstration support for the use of generic

this, the Senate Finance Committee’s proposal would force the
industry to pay 2% more in rebates to the government for the pills
subsidized under Medicaid. Drug companies would also have to pay
rebates on generic medicines given through managed-care
organizations. This would cost the industry about $46 mn annually,
said Kathleen Jaeger, chief executive of the GPA lobby.

said the govt should focus on increasing the use of generics because
a 2% nationwide increase in the use of the medicines would save about
$1 bn a year.

Teva’s CEO, also opposed bills that would essentially bar
brand-name drug companies and generic firms from doing  deals to
delay generics from reaching the market. “So we’re assumed
guilty until proven innocent?” he said of ‘pay-for-delay’ settlements. “I think that is
equally absurd.”

House bill would ban the deals altogether, while a Senate version
would allow them only if the companies can prove they foster
competitiveness. The FTC assumes all deals are anticompetitive
because they delay cheap generics from reaching consumers and it
reviews them all. Marth called on the FTC to challenge deals it
thinks are anticompetitive rather than slapping on a total ban. “Call out
the bad actors,” he said. The FTC “have the tools to do that

sold half positions of RBS P at $11.55; RBS F at $15.12; and NatWest
C at 14.92 yesterday. More news for paid subscribers follows.

Happy New Year!