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Report: Summers rejects Netanyahu offer to be top Israeli banker

Larry Summers
Larry Summers

I guess rudeness is a resume-builder in Israel. Reuters reporter Dan Williams:

The ‘Times of Israel’ says Summers has rejected the job.

So is this the consolation prize for not getting the US Fed chairmanship? And is there a revolving door for American Jews between the US and Israel? Stanley Fischer, formerly of Citigroup, was the last Israeli bank chair. Summers has long been a defender of Israel; he stopped divestment in its tracks at Harvard ten years ago by saying it was anti-Semitic in effect.

Summers is also a big neoliberal. Why he lost the fed chair, per Bloomberg:

A campaign led by two Democrats, Ohio Senator Sherrod Brown and Oregon Senator Jeff Merkley, who organized advocacy groups and fellow legislators against Summers effectively ended his prospects. Concerned that he would take too soft a stance in regulating Wall Street

NYT:

In August, [Republican Senator Pat] Roberts said, “I wouldn’t want Larry Summers to mow my yard.”

Mr. Summers, who was also the president of Harvard, has attracted resistance for a variety of reasons, among them his comments about the aptitude of women in math and science.

Senators like Mr. Tester also say that Mr. Summers has too often promoted the interests of large financial institutions over those of small community banks.

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there’s something fishy going on. i thought they finally found someone for this job, the guy from argentina. my hunch is there’s a hush hush on the big news. the bank of israel has some issues and i think it has to do w/regulators of euro banks advising not to make loans or something. i think it’s related to why the last guy stepped down in january. i don’t think anyone wants being at the helm of a sinking ship.

http://www.bloomberg.com/news/2013-08-07/israel-developed-market-turns-into-be-careful-for-what-is-wished.html

Resignations

Israel’s TA-25 Index rose 8.6 percent since the MSCI reclassification took effect in May 2010 versus a 67 percent jump for the Nasdaq Composite Index. (CCMP) That year alone, investors pulled $795 million from the Israeli market. The 44 percent tumble in volumes through the end of 2012 compared with an average 18 percent global decline, the Bank of Israel said in a March 12 report.

Initial public offerings have dried up. In June, Kadimastem Ltd. (KDST), a developer of stem cell therapies, became the first company to list on the Tel Aviv bourse since the end of 2011, compared with a record 56 IPOs in 2007, exchange data show.

Companies that pulled off the exchange, which had 549 stocks in 2012, included Hot Telecommunication System Ltd., a telecommunications company, and ELAD Canada Inc., a real estate company owned by billionaire Isaac Tshuva. Israel Chemicals Ltd. (ICL), the Tel Aviv-based company that extracts minerals from the Dead Sea to make fertilizers and potash, said yesterday it’s preparing for a dual listing in part to shield itself from worsening conditions on the local bourse.
‘Wake-Up Call’

The drop in volumes prompted a feud between regulators and exchange officials over who was to blame. Former Tel Aviv Stock Exchange Chief Executive Officer Ester Levanon resigned on July 17 and Saul Bronfeld, the chairman since 2006, followed the next week. Bronfeld, a former Bank of Israel chief economist, cited government regulations and slower economic growth for the exodus of investors and companies. Israel Securities Authority Chairman Shmuel Hauser says the bourse’s management is also responsible.

“The decline in volume and prices on the Tel Aviv bourse is due to excessive regulation and the change in the pace of economic growth, not the operations of the bourse,” Bronfeld said in an interview Aug. 5 in Tel Aviv. “My resignation is a wake-up call for Jerusalem,” where Prime Minister Benjamin Netanyahu’s government is based, he said.

The resignations are coinciding with a shuffle at the central bank, where two candidates nominated by Netanyahu to replace former Governor Stanley Fischer have withdrawn. Jacob Frenkel, a former central bank chief, and Leonardo Leiderman, the chief economist at Bank Hapoalim Ltd. (POLI), dealt a blow to Netanyahu by giving up their nominations. Fischer’s handpicked deputy, Karnit Flug, is acting as a caretaker in the meantime.

I’ve been following this story on a weekly basis now for months. It’s one giant mess.

Candidate after candidate has been rejected, often for political reasons. Their first choice had to confess, rather embarrasingly, that he had stolen small things in a duty-free shop at a Hong Kong airport.

Yair Lapid’s manegement of the finance ministry is not much better where he just fired a civil servant for no other reason than that the servant came up with an indepedent paper with suggestions.

As for the Summer’s angle. There’s something slightly tragic in his character. His family is made up out of Nobel laureates. He wanted one himself but now looks increasingly unlikely to get one. He wanted to become Fed chief all his life, but then the liberal faction destroyed that chance(Yellen was always the better candidate anyway but Obama’s anti-woman bias and preference for pro-Wall Street candidates once again became apparent until his hand was forced).

Now, he’s offered the Israeli central bank job. Remember, Fischer wanted to become the head of the IMF. My guess is that Summers want either the IMF or the World Bank job. He feels that by going to Israel he’d take a step down and be seen as a provincial candidate. Maybe he’ll get involved in some Chinese business or something to gin up the votes for a potential vote after Lagarde is gone.

if Summers had been able to take the Fed Chief’s job, wouldn’t that have almost been the same thing?

Below I provide a quote and a link to an interesting review of Larry Summers career from when Summers was the preferred candidate for Federal Reserve chairman. This should also provide some insight into Obama’s priorities.

“Summers was somewhere involved in all these policy fiascos—from the original $787 billion, business tax cut heavy stimulus, to the generous bankster bailouts, to failing to prevent the homeowner foreclosures (while subsidy mortgage lenders)….The point of this Summers’ policy history review is to show that Larry Summers has always done what the banksters have wanted….” (Jack Rasmus)
http://www.counterpunch.org/2013/09/09/larry-summers-the-next-fed-chairman/

I’d let Larry Summers mow my lawn. I’d even pay his ticket up here if he agreed to do it.