ISR AEL 'DIGEST
Specially compiled by The Jerusalem Post
— $1 EQUALS 2.862 NIS (shekels) - Close Price 8/13/93 —
Israel On Par With West
Israel is a good place to
live, according to research
published last week by
Federation of Israeli
Chambers of Commerce
economists.
The economists looked
at social factors instead of
the usual focus on Gross
National Product, income
per capita, etc. They com-
pared life expectancy, fer-
tility, calorie consumption
per capita, child mortality
rates, illiteracy rates and
women's workforce partici-
pation rates to those of
other countries.
According to these mea-
sures, Israel compared
favorably with most coun-
tries, even with other
Western nations. Life
expectancy is exactly 76
years, as in the United
States, compared to the
average expectancy of 76.4
years an the seven indus-
trialized nations.
Israeli Economy Slows
World Wide founders: Howard Babcock, Robert Silverstein, Andrew Jacob and Jack Wolfe.
April," said Nancy Fried-
man, a First Equity loan
officer who holds an MBA
degree. "At the time, I had
been looking for work (in
other professions) for sever-
al months. It's nice this
industry is doing so well."
Still, while mortgage
lenders from Standard
Federal Bank in Troy to the
Rock Financial Corp. in
Bingham Farms have
enjoyed a steady, if not
explosive, flow of new busi-
ness in recent years, inter-
est rates won't stay low for-
ever.
The economy is expected
to pick up during 1994
and the Federal
Reserve will no doubt
raise rates in an effort
to limit any sizeable
growth in inflation.
Any uptick in rates
will stifle the refinanc-
ing market as savings
dry up — most lenders
report refinancing
makes up between 30
and 50 percent of their
overall business —
while discouraging the
new purchase market.
There is the chance,
though, that higher federal
taxes will limit the growth
of the economy and keep
rates at present levels.
"Every mortgage compa-
ny has enjoyed tremendous
growth over the last two
years, but if the rates go up
the refinancing market will
drop off," said Jim Golden,
loan officer for Shore
Mortgage in Birmingham.
"But there is the possibility
the economy will improve
without higher rates.
"An increase in (federal)
taxes could put a damper on
the economy. Under such a
scenario the Federal
Reserve will keep rates low
to offset tax increases.
For the rest of the year
rates will remain where
they are now and we'll just
have to wait and see what
transpires next year."
While a drop in rates will
cut into new business, mort-
gage companies say they are
prepared for the shift. Like
most firms facing a down-
turn, area mortgage lenders
will step up marketing and
advertising campaigns to
compensate.
For instance, in what
turned out to be a market-
ing coup, World Wide gam-
bled $10,000 in March 1991
ed into a lot of new business
and spring -boarded us into
what we are today. The
show also brought in new
clients through word-of-
mouth advertising."
By June of 1990, the four
partners, who each worked
100-hour weeks and fol-
lowed a business plan hand-
written on a yellow legal
pad, hired their first
employee. Today World
Wide has over 160 workers
and recently moved into a
25,000-square-foot office in
downtown Birmingham.
In addition to its
Birmingham headquarters,
the firm has offices in
Bloomfield Hills,
Brighton, Farmington
Hills and Troy. Future
expansion includes
branch sites in Grosse
Pointe, Grand Rapids,
St. Joseph and
Indiana.
Jack Wolfe, co-
founder and president
of World Wide, said the
firm closed more than
$400 million in resi-
dential loans during
the first half of the
year. In addition to
home mortgages, the firm
also provides commercial
lending and leasing ser-
vices. In the fall, the firm
will unveil a full financial
planning and consulting
division.
A strength of the compa-
ny is the close relationship
it has built up with area
real estate agents and bro-
kers. The firm provides
prospective buyers with a
free financial analysis while
supplying agents with four-
color fliers of individual list-
ings and numerous other
marketing tools unique to
the industry. ❑
While a drop in rates will
cut into new business,
mortgage companies say
they are prepared for the
shift. Area mortgage
lenders will step up
marketing and advertising
campaigns to compensate.
for a booth and promotional
items to hand out at the
spring Builders Flower and
Furniture Show at Cobo
Center in downtown
Detroit.
"After the first day of the
show we came home
exhausted," said Andy
Jacob, a founding partner
and senior vice president for
World Wide. "The interest
rates had just taken their
first dip and people were
crowding around our booth
for information.
"Everyone wanted to
know about refinancing and
the money they were going
to save. The show translat-
Economic activity slowed
down in the second quarter
of the year but is expected
to take off in the third
quarter, according to a
Treasury report published
last week.
According to the report,
the slowdown in the sec-
and quarter was expected,
although the closure of the
territories put an addition-
al damper on the economy.
The report notes exact
figures for the second
quarter were delayed due
to the civil servants' strike
last month and are still
unavailable.
The closure is expected
to improve employment
statistics, as Israelis
replace workers from the
territories. It is also
expected to reduce exports
to the territories, due to
the drop in the inhabi-
tants' incomes.
Exports Down, Business Chief Says
Israel's exports are suffer-
ing on international mar-
kets, Manufacturers
Association president Dan
Propper said last week.
Mr. Propper said exports
are hindered by lower
export orders, price compe-
tition — which led to a fall
in prices — and interna-
tional trade limitations.
The drop in overseas
export prices reflects com-
panies' difficulties and a
fall in export profitability,
he added. Mr. Propper
based his remarks on a
survey of 200 firms con-
ducted by the association's
economic division in July.
Trade Deficit Dips 53 Percent
The trade deficit dropped
53 percent to $268 million
last month, as imports fell
sharply due to the civil ser-
vants' strike. The strike,
which shut down customs
stations for two weeks, cut
imports 13 percent, the
Central
Bureau
of
Statistics reported.
Exports totaled $1.18
billion, while imports stood
at $1.45 billion.
According to seasonally
adjusted export figures,
excluding diamonds, goods
exports fell 1 percent in
June and July. Industrial
exports, which make up
two-thirds of exports,
dropped 2 percent during
the same period.
Investment Promo Body Needed
Recommendations to cut
red tape and expedite the
approval of capital invest-
went projects entitled to
government incentives
were presented last week
to Industry and Trade
Minister Micha Harish by
a public committee he
appointed.
The panel, headed by
Tel Aviv University eco-
nomics professor Haim
Ben-Shahar, recommended
creating an investment
promotion authority that
will centralize every aspect
related to establishing a
government-approved
enterprise.
The creation of an
investment promotion
authority is aimed at sim-
plifying the process and
reducing the time it takes
for the approval and estab-
lishment of a government-
approved
enterprise,
reducing the investors'
level of uncertainty at the
beginning of the process
and improving the service
provided to investors
throughout the process.