Elon Musk: "This Is the Most Destructive Force in History"

Elon Musk claims a terrifying new economic force will put millions of Americans out of work. The ripple effects could nudge the US economy into a catastrophic tailspin. If this happens, you need to be prepared. That's why a former Trump advisor is sharing his contingency plan with the public. What is Musk talking about?

Israel's economy is struggling. Economists say ending the war would help

JULIA FRANKEL
August 26, 2024

JERUSALEM (AP) -- In Jerusalem's Old City, nearly all souvenir shops are closed. In Haifa's flea market, forlorn merchants polish their wares on empty streets. Airlines are canceling flights, businesses are failing and luxury hotels are half empty.

Nearly 11 months into the war with Hamas, Israel's economy is struggling as the country's leaders grind ahead with an offensive in Gaza that shows no signs of ending and threatens to escalate into a wider conflict.

Prime Minister Benjamin Netanyahu has tried to allay concerns by saying the economic damage is only temporary. But the bloodiest, most destructive war ever between Israel and Hamas has hurt thousands of small businesses and compromised international trust in an economy once thought of as an entrepreneurial dynamo. Some leading economists say a cease-fire is the best way to stop the damage.

"The economy right now is under huge uncertainty, and it's related to the security situation -- how long the war will go on, what the intensity will be and the question of whether there will be further escalation," said Karnit Flug, Israel's former central bank chief who is now the vice president of research at the Israel Democracy Institute, a Jerusalem think tank.

The war has inflicted a far heavier toll on Gaza's already broken economy, displacing 90% of the population and leaving the vast majority of the workforce unemployed. All banks in the territory have shut. The fighting has killed more than 40,000 people, according to Palestinian health officials in the Hamas-run territory. Their count does not distinguish between civilians and combatants.

The fighting in Gaza and daily attacks from Hezbollah militants in Lebanon have also driven tens of thousands of people from their homes along Israel's northern and southern borders and caused large-scale damage.

The Israeli economy has recovered from previous shocks, including shorter wars with Hamas. But this longer conflict has created a bigger strain, including the cost of rebuilding, compensating families of victims and reserve soldiers, and vast military spending.

The drawn-out nature of the fighting and the threat of further escalation with Iran and its Lebanese proxy, Hezbollah, have an especially harsh impact on tourism. Though tourism is not a major driver of the economy, the damage has hurt thousands of workers and small businesses.

"The hardest thing is that we don't know when the war will end," said Israeli tour guide Daniel Jacob, whose family is living off savings. "We need to finish the war before this year's end. If it's another half a year, I don't know how long we're going to make it."

Jacob, 45, returned in April from six months of duty as a reserve soldier to find out that business had dried up. He was forced to shutter the tourism company he spent two decades developing. His only income is aid from the government, which pays him half his prewar salary every few months.

Meir Sabag, a Haifa antiques dealer whose shop sat empty, said business is worse now than during the COVID-19 pandemic.

On a recent weekday, the formerly bustling port of Haifa, a major hub of Israeli import-export where massive container ships would often stop, was still.

With Yemen's Houthi rebel group endangering ships passing through Egypt's Suez Canal, many long-haul ships have stopped using Israeli ports as hubs, said a port official who spoke on the condition of anonymity because he was sharing internal information.

He said Israeli ports saw a 16% percent drop in shipping in the first half of the year, compared with the same period in 2023.

The war began on Oct. 7, when Hamas militants killed some 1,200 people and took 250 people hostage.

Renewed U.S.-led cease-fire efforts appear to be sputtering, and Iran and Hezbollah have threatened to avenge the recent assassinations of top militant leaders, raising the threat of a wider regional war. These fears have prompted major airlines, including Delta, United and Lufthansa, to suspend flights in and out of Israel.

Jacob Sheinin, an Israeli economist with decades of experience advising Israeli premiers and government ministries, said the total cost of the war could amount to $120 billion, or 20% of the country's gross domestic product, a broad measure of economic activity.

Of all 38 member countries in the Organization for Economic Cooperation and Development, Israel's economy underwent the biggest slowdown from April to June, the organization reported Thursday. The Israeli GDP was projected to grow 3% in 2024. The Bank of Israel now predicts a growth rate of 1.5% -- and that's if the war ends this year.

Fitch downgraded Israel's rating from A-plus to A earlier this month, following similar downgrades by S&P and Moody's. The downgrading could raise the government's borrowing costs.

"In our view, the conflict in Gaza could last well into 2025," Fitch warned in its rating note, which cited the possibility of "significant additional military spending, destruction of infrastructure and more sustained damage to economic activity and investment."

In another worrying sign, the Finance Ministry this month said the country's deficit over the last 12 months has risen to over 8% of GDP, far exceeding the 6.6% deficit-to-GDP ratio the ministry projected for 2024. In 2023, Israel 's budget deficit was roughly 4% of its GDP.

The downgrade and the deficit have increased pressure on the Israeli government to end the war and reduce the deficit -- something that would require unpopular decisions such as raising taxes or cutting spending.

But Netanyahu needs to keep his coalition afloat, and his hard-line finance minister, Bezalel Smotrich, wants the war to continue until Hamas is decimated.

Flug, the former central bank chief, said the situation is unsustainable and that the coalition will have to cut back on spending, such as unpopular subsidies to ultra-Orthodox schools that are perceived by the broader public as wasteful.

"The public will have hard time accepting it if the government does not show that the severity of the situation forces them to give up some of the things that are dear to them," Flug said.

Smotrich said Israel's economy "is strong" and vowed to pass a "responsible budget that will continue to support all the needs of the war, while maintaining fiscal frameworks and promoting growth engines."

The unemployment rate has dipped below pre-war levels, Sheinin said, to 3.4% in July compared with 3.6% in July of last year. But when taking into account Israelis forced out of the labor market, the figure rises to 4.8%, a figure that would still be considered low in most countries.

Meanwhile, many small businesses have closed because their owners and employees were called up for reserve military duty. Others are struggling amid the broader slowdown.

Israeli business information company CofaceBDI reports that some 46,000 businesses have closed since the start of the war -- 75% of them small businesses.

Even Jerusalem's iconic American Colony hotel, a popular stop for politicians, diplomats and movie stars, has laid off workers and is mulling pay cuts, said Jeremy Berkovitz, who represents the owners.

"We did consider at one point closing for a few months," said Berkovitz "but of course that would mean sacking all the staff. It would have meant letting the gardens, which we've developed over 120 years, go fallow."

Sheinin said the best way to help the economy bounce back would be to end the war.

"But," he cautioned. "If we are stubborn and continue this war, we will not recover."

___

Find more AP coverage at https://apnews.com/hub/israel-hamas-war

Continue Reading...

Popular

Elon Musk Want His 11 Kids, Their Mothers To Live In Secret Compound He Bought, New Report Says

Elon Musk could be building a new family compound made up of several mansions to house his children and their mothers, according to a new report.

Trump Has Asked Me To Do 3 Things, Says Robert Kennedy Jr.

Robert Kennedy Jr. revealed Trump's directive to tackle health agency corruption, promote science, and end chronic disease.

Sumitomo Rubber closing western New York tire plant and cutting 1,550 jobs

TONAWANDA, N.Y. (AP) — Sumitomo Rubber announced Thursday it will close its western New York tire manufacturing plant and eliminate all 1,550 union and salaried jobs.

Bill Gates' Mysterious New AI Project Revealed - Ad

Tech expert Jeff Brown uncovers Bill Gates' latest AI project, Stargate, which Forbes claims could reshape everything we think we know about our world.

Listen to business owners and voters in Erie, Pennsylvania. They could help decide the White House.

ERIE, Pa. (AP) — It wasn’t much when he bought it, but Michael Hooks has made the old garage his own haven. And the city of Erie knows it. Half a dozen cars honk as they pass by one October afternoon, the people hanging out of car windows to wave hello at him.

Elon Musk Joined Trump's Call With Zelenskyy

Elon Musk was a surprise guest on a phone call between President-elect Donald Trump and Ukrainian President Volodymyr Zelenskyy.

Elon Musk Wants Uranium... But This $3 Million Miner Could Beat Him to It! - Ad

While tech giants like Elon Musk are pouring billions into nuclear energy, a tiny firm selling for less than $1 has quietly secured land in Canada holding some of the richest uranium deposits ever discovered. With energy demand skyrocketing, this tiny company could soon make big waves in the market.

US Steel Reports Better-Than-Expected Q3 Results, Aims To Close Nippon Steel Deal By Year End

U.S. Steel reported its third-quarter results after Thursday's closing bell. Here's a look at the details from the report.

Wall Street Legend Issues Inauguration Buy Alert - Ad

If you've underperformed this raging bull market, if you've lost money or missed out... this is your final chance to potentially profit.

Hong Kong reporter says she'll sue Wall Street Journal for dismissal because of her union role

HONG KONG (AP) — A former Hong Kong reporter of The Wall Street Journal on Tuesday said she'll sue the publication for because she joined a trade union.

The Real Hillbilly Elegy - Ad

Obama and Biden's "War on Coal" has left nothing but devastation in its wake. In the beautiful hill-towns of Appalachia, unemployment is sky-high, wages are at record lows. Addiction has overwhelmed these once thriving coal towns. But in a strange twist of fate, something incredible is taking place. A breakthrough that could end America's energy woes and send one government-backed stock climbing.

Appeals court says Colorado ban on gun sales to those under 21 can take effect

DENVER (AP) — A federal appeals court ruled Tuesday that a Colorado law raising the age to purchase a gun from 18 to 21 can take effect while the legal battle over it continues.

Jim Cramer Says Mark Zuckerberg Has 'Your Brain' As Meta Pours Billions Into Global Domination Strategy

Jim Cramer highlighted Meta CEO Mark Zuckerberg's unique marketing abilities, suggesting Zuckerberg's focus on dominance and precision targeting can create global impact, as Meta's strong Q3 earnings exceeded expectations despite some stock volatility.

[Breaking] Classified Wargames Reveal Grave Threat From China - Ad

In multiple wargames, U.S. forces were overwhelmed and unable to stop Chinese amphibious assaults from seizing the island. With tensions at a boiling point, the economic fallout could be devastating. Get the details on the weapons makers set to boom if war breaks out.

How Trump's Tax Cuts, Tariffs, 'Animal Spirits' Could Shape S&P 500 Earnings

Trump's pro-business policies, including tax cuts and deregulation, could drive S&P 500 earnings higher by 11% in 2025 and 7% in 2026, but tariffs on Chinese imports pose a downside risk.

The Secret Weapon You Need for This Bull Market - Ad

There's a powerful tool that can remove all the guesswork from trading. It's built to trade the key levels for you, buying dips and selling at the right time, without you having to lift a finger. For a limited time, the creators of this incredible tool are holding a free Workshop where you can see the software in action.

$2.5 Million From Meme Coins? One Trader Seems To Have Cracked The Code

A whale made $2.5 million trading meme coins with potential for high profitability. Solonchain highlights effective risk management and upcoming conference on memecoins.

What Does Trump's Presidency Mean for Elon Musk's AI Venture? - Ad

As new allies, Trump and Musk could reshape America's AI future. Elon Musk's AI startup, xAI, might gain the edge it needs to dominate the industry. A shift in government support, fewer barriers, and a potential "backdoor" into the AI race are just the beginning. Is xAI set to become Elon's most powerful venture yet?

Engines on 1.4 million Honda vehicles might fail, so US regulators open an investigation

DETROIT (AP) — The U.S. government's highway safety agency is investigating complaints that on as many as 1.4 million Honda and Acura vehicles.

Text of the policy statement the Federal Reserve released Thursday

WASHINGTON (AP) — Below is the statement the Federal Reserve released Thursday after its latest policy meeting ended:

Wavebot: The Automated Trading Tool for This Bull Market - Ad

October through December are historically among the most bullish months for crypto. WaveBot -- an automated trading tool that takes all the guesswork out of profiting in crypto. It trades key levels, buying dips and selling at the perfect time, 24/7. All you need to do is set it up. After that, WaveBot takes care of everything.

Financial market worries over the UK budget appear to ease

LONDON (AP) — Worries about this week's within financial markets appeared to ease Friday with the interest rates charged on British debt steadying and the pound rising against most other currencies.

Apple's AI Dream Team: The Companies You Don't Know - Ad

Apple's debut AI device is set to redefine the market, but here's the twist -- they could be backed by a network of under-the-radar companies. These could be the real winners as Apple enters the AI race.

Tesla shares soar 14% as Trump win sets stage for Elon Musk's electric vehicle company

NEW YORK (AP) — Shares of Tesla soared Wednesday following an election that will send Donald Trump back to the White House, an outcome that has been in the closing months of the race.

Warren Buffett's Apple Stake Reduction Spurs $97B Cash Surge—Analysts Speculate This Could Be The Reason Behind Berkshire Hathaway's Massive Cash Pile

Warren Buffett, the legendary investor, has made a significant move by reducing his stake in Apple Inc. (NASDAQ: AAPL) and other stocks, generating a whopping $97 billion in gains for his company, Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).

AI Market Shock Coming November 19th? - Ad

Jeff Brown predicts an AI market shift, potentially happening by November 19th, led by Bill Gates' Stargate project. Get ahead of the curve before the next AI market shock.

Veterans face challenges starting small businesses but there are plenty of resources to help

NEW YORK (AP) — Many veterans who’ve started small businesses tell a similar story: Their military service prepared them mentally for the task, but they were at a disadvantage when it came to the financial part.

Gold is suddenly not so glittery after Trump's White House victory

NEW YORK (AP) — After ripping higher for much of this year, the price of gold has suddenly become not so golden since Donald Trump's victory in the presidential election.

The Dark Truth About AI Stocks - Ad

All the signs show the AI market is about to reverse. And unless you know what's really going on in this sector, you could be wiped out. Inside this new expose, you'll discover exactly how the AI crisis will unfold... how you can prepare for it before it's too late... and how you can potentially profit from it, too.

Chinese EV Maker BYD Edges Closer To Ford's Sales Volume After Beating Tesla In Revenue Race

Chinese EV maker BYD Co Ltd is closing in fast on Michigan-based Ford Motor Co's global sales despite the former not manufacturing combustion engine vehicles.

Man who stole and laundered roughly $1B in bitcoin is sentenced to 5 years in prison

WASHINGTON (AP) — A computer expert who stole worth billions of dollars at current prices — and then spent years laundering some of the hacked cryptocurrency with help from his wife — was sentenced on Thursday to five years in prison.

Urgent New Announcement from Porter Stansberry - Ad

"We recommended Nvidia in 2016, now we're recommending this little-known AI company." There is only one artificial intelligence company that matters... and it's not even an AI company. It's this obscure military backed contractor that the AI market needs to survive.

Japan's SoftBank returns to profit after gains at Vision Fund and other investments

TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Trending Now

Information, charts or examples are for illustration and educational purposes only and not for individualized investment management This message contains commercial elements, such as advertising. We only send these offers to those who have opted in to our newsletter. Past performance is not indicative of future results. For these reasons we strongly suggest trading in a DEMO/Simulated account. The information provided by us is for educational and informational purposes only. We make no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended and have not determined if the statements and opinions of the advertiser are accurate, correct or truthful. If you use, act upon or make decisions in reliance on information contained or any external source linked within it, you do so at your own peril and agree to hold us, our officers, directors, shareholders, affiliates and agents without fault.

Copyright traderelite.club
Privacy Policy | Terms of Service