In this issue:

Will Major Israeli Bank Collapse?

Profile of Hunger in the West Bank/Gaza Strip

Japan's 'Megabanks Desperate To Escape Nationalization'


From Volume 1, Issue Number 43 of Electronic Intelligence Weekly, Published Dec. 30, 2002

WORLD ECONOMIC NEWS

Will Major Israeli Bank Collapse?

Bank of Israel Governor David Klein told Israel's Ma'ariv in an interview that "it is not beyond the realm of belief that a major bank will collapse." This, added to the environment where the shekel has been collapsing against the dollar, has caused another loss of 0.55% as of Dec. 27. Later, Klein qualified that he was not identifying a specific bank, but was making a generic warning.

Profile of Hunger in the West Bank/Gaza Strip

After the Israeli Defense Forces demolished 537 metric tons of food used by the World Food Program to feed 500,000 Palestinians back in early December, the WFP put out this geographic profile of hunger in the West Bank/Gaza Strip area.

Town # of Inhabitants # of people who lost jobs since Dec. 2000 # people in need of food aid
Hebron
457,781
50,000
100,000
Bethlehem
153,954
47,000
30,000
Jerusalem
367,000
50,000
7,000
Ramallah
243,432
19,400
30,000
Nablus
331,688
13,000
50,000
Qalauilia
81,900
16,000
16,000
Tulkaram
149,188
15,000 +
24,000
Salfit
54,600
n/a
11,000
Jenin
225,700
20,000 +
45,000
Jericho
37,066
n/a
7,000
Gaza Strip
1,196,000
44,000 +
300,000

Many of these cities are 50-90% dependent upon either trade with Israel and/or day wages of people who used to work there. For example, in Jenin, almost 70% of its economy depends on commerce and daily jobs in Israel, but as of November, 90% of that trade had ceased, because of closures and curfews. In the Gaza Strip, according to the WFP profile, 68% of Palestinians have fallen under the poverty line. The 300,000 people in need of food there are non-refugee Palestinians.

Japan's 'Megabanks Desperate To Escape Nationalization'

Japan "Megabanks Desperate To Escape Nationalization" was the headline in Nikkei on Dec. 23, describing arcane plans in which Japan's $1-trillion banks are moving their management shells around, without having any idea how to actually escape going under.

Mizuho Group is making its current top holding company, Mizuho Holdings, into an intermediate holding company by establishing another holding company above it. They are doing this because it may allow them a legal loophole to avoid using "impaired asset accounting," under which they would have to write off several trillion yen worth of assets at the current top holding company.

This in turn would mean they could not pay huge dividends to the government for the bailouts which the group's component banks, such as Dai-Ichi Kangyo Bank, received from the government in the big 1998 bailout—and failure to pay would mean immediate nationalization.

Sumitomo Mitsui also has a new scheme to acquire Aozora Bank, formerly Nippon Credit Bank, aimed at securing funds to pay similar government dividends so the government can't take them over. "These moves will likely enable the megabanks to avoid being placed under state control, but will not fundamentally help them resolve their crucial problem—the cleanup of bad loans," notes Nikkei. This is why their stock prices continue to collapse.

All rights reserved © 2002 EIRNS