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14 March 2023

Why? More Backstory — Israel Protects Israel !

 
Israel Supporting Hi-Techs that Pulled Out Billions to Destroy Its Economy in Judicial Reform Protest

Eynat Guez, CEO and Co-Founder of a billion-dollar Israeli software company called Papaya Global, in late January announced that Papaya Global was withdrawing all its funds from Israeli banks in response to the reform, explaining: “This is a painful but necessary business step.”

Guez tweeted on Thursday: “Following Prime Minister Netanyahu’s statements that he is determined to pass reforms that will harm democracy and the economy, we made a business decision at Papaya Global to withdraw all of the company’s funds from Israel.” 

In early February, Guez reportedly said: “If all of us, the heads of high-tech companies, take out in one day just 20% of the money we keep in the [Israeli] banks – they will collapse… that is my right and even my duty.” 

Guez and many other Israeli hi-techs all took this painful but necessary business step, creating a self-fulfilling prophecy loop whereby they issued warnings about how the judicial reform would ruin the economy and they, then, went about trying the ruin the economy.
 One should be very careful going into the business of prophecy, there can be dire consequences. For Guez and her warrior hi-tech moguls on the left, Karma knocked on the door on March 10, when Silicon Valley Bank (SVB), where an estimated 500 Israeli companies kept their money, failed. The bank, which was riding high, offering fantastic loans when the Fed was maintaining a zero interest rates policy (with 85% of its deposits uninsured), suddenly was facing an existential problem when those companies were late paying back, to the point where SVB tried to raise $1.8 billion to beef up its holdings and started a bank run on those deposits. The state regulatory agency revoked SVB’s charter and transferred the business into receivership in the second-largest bank failure in US history.

Prime Minister Benjamin Netanyahu issued a calming statement from Rome, where he was on a state visit, saying that he closely monitored the fall of SVB, saying: “I held talks with Israeli hi-tech seniors. When I return to Israel, I will discuss with the ministers of finance and the economy, and the governor of the Bank of Israel the extent of the crisis. If necessary, out of responsibility for hi-tech companies and employees, we will take steps to help the Israeli companies.”

So, what happened to Eynat Guez? On Saturday, she tweeted: “Discount Bank and Bank Hapoalim are taking amazing steps in supporting Israeli companies – immediate loans to companies alongside bridging loans to employees whose wages will be delayed by companies due to the collapse of SVB. This is what real leadership looks like. Thank you for the example and the lead!”
 

Yes, nice banks, the same banks Guez was bravely predicting “they will collapse” because it was “my right and even my duty” to ruin them and Israel’s economy.

Tal Rimmer, a risk manager at an Israeli public company, noted on Saturday that 
Gadi Moshe, co-manager of the SVB branch in Israel, was one of the driving forces behind the hi-tech protests. Rimmer tweeted: “I have no compassion in my heart for those who tried to collapse the Israeli economy in a fictitious manner, and not even for the news on channels 11, 12, and 13 that echoed and amplified their message. I understand they are now hiring the best attorneys to save what little is left of their money in SVB.

“My recommendation is not to them but to their investors: sue them, they acted negligently contrary to the interests of their shareholders.” According to Rimmer, Gadi Moshe, who prides himself on being the chief democracy officer for the hi-tech protest, posted and retweeted dozens of additional posts calling on investors to withdraw their money from Israel. He even praises Riskified CEO Ido Gal who announced he was moving half a billion dollars out of Israel just two days before the SVB collapse. Incidentally, Riskified’s value on Wall Street has dropped from $5 billion to less than $1 billion.

But that was small potatoes compared to the catastrophe that was ushered in by Verbit Software CEO Tom Livne, whose company kept $100 million in SBV. Globes reported that when the avalanche began, company executives urged to CEO to withdraw the money and return it to the company’s Israeli bank account, but Livne refused.

Sources close to the company told Globes that “Livne refused to withdraw the money when the collapse started and when it was still possible, out of trust in the bank and out of solidarity with its situation and against the background of the opposition to the legal revolution in Israel.”

Those same sources insisted: “A leader needs to have courage, determination, and patience. We have $100 million there, but we have raised $600 million. From our point of view, this is a light bump on the wing, when the bank has already made it clear that it has a repayment capacity of at least 87%.”

Then they told Globes:
 “Even if we lose $15 million, it is a price worth paying for the solidarity.” Good to know. Especially since the bank is now and receivership. According to reports, by the time the bank was closed by the FDIC on Friday, $42 billion had been withdrawn from it. By the end of that trading day, the bank’s cash balance was short $958 million, and it failed to obtain collateral from outside sources.

But it was worth losing $100 million to prove that Simcha Rothman and Yariv Levin will ruin the economy…
 Bank Leumi and Bank Ha’Poalim established headquarters that worked around the clock to help companies extract their funds from SVB to their branches in the US, but the damage remains huge, in double-digit billions. Hundreds of Israeli companies have been exposed to the bank’s collapse.

It remains to be seen whether those companies will show gratitude to their country that gave them their start and now forgives their betrayal and offers them a new lease on life – for the sake of their employees.

Finance Minister Bezalel Smotrich, one of the right-wing leaders most demonized by the anti-reform protesters, put together a team, led by the Finance Ministry’s Director-General Shlomi Heizler, with representatives of the Finance Ministry, the Bank of Israel, the Securities Authority and the Innovation Authority. The team will be in contact with the local hi-tech industry, funds, and financial institutions in Israel and the US, to analyze the SVB collapse’s impact on the Israeli economy and formulate a response to Israeli companies’ urgent needs.

It should be noted that Smotrich flew to the US last night to talk at the Israel Bonds conference this week, where he will probably point out that investing in Israel is truly the safest investment.
Article By 
David Israel 

1 comment:

Anonymous said...

Those who believe money/power are their god will all find out their foolishness and will have to learn there is only One G-D, the Only One, and will have to do much teshuvah, if they can.