Tikun Olam-תיקון עולם: Make the World a Better Place

This is a cartoon by Biderman, one of Israel’s pre-eminent political cartoonists.  It’s a commentary on the toll the global economic meltdown has taken on Israeli tycoons.  Pictured are Lev Leviev (playing sax) and two other industrialists who went belly up recently.  Behind the panhandlers is the phrase Klezmer in Hebrew, denoting traditional eastern European Jewish musicians who traveled from town to town eekeing out a meager living.

Leviev’s real estate subsidiary, Africa Israel, is on the verge of insolvency and the settlement builder and diamond tycoon could lose control.  It remains to be seen whether this economic implosion will hinder his firm’s major investment in propping up the settler enterprise.

H/t to Sol Salbe.

Haaretz reports that Lev Leviev’s Africa Israel Investments faces insurmountable debt obligations and will be forced to negotiate a restructuring with his creditor banks.  This means that Leviev could lose control of his empire or, at the very  least, that he will be forced to cede a large portion of his company to the banks.  Depending on how they view his leadership, he may or may not remain with the company.

Despite the fact that AI’s share price has rebounded handily in recent months it is still down 75-80% from a year ago.  Further, Leviev’s real estate portfolio has taken a tremendous pounding, with one property alone, the old New York Times Building, falling in value from $690 million t0 $315 million.  AI lost $1 billion in 2008.  Its 2nd quarter 2009 statement will report an estimated $350 million loss.

Earlier this week, Global BDS activists announced that a British subsidiary of the Wall Street investment house, Blackrock, had divested of its Africa Israel holdings, putting further financial pressure on Leviev.  This action came as the result of pressure from Norwegian banks which offer Blackrock funds to their customers.  The banks had investigated AI’s participation in settlement building projects in the West Bank (Maaleh Adumim and a number of others) and determined that such violations of international law would not be acceptable to their clients.

Thus, Leviev has become the first financial victim of the BDS movement: the first Israeli company to suffer a substantial hit.  No doubt, he will not be the last.  This puts other Israeli companies which profit from the Occupation on notice that they are vulnerable.

If there are any economists among my readers could you e mail me or comment below.  I’d like to discuss in greater detail what the economic repercussions could be for Leviev.

Lev Leviev’s Africa Israel  Investments lost a record $1.14-billion in 2008 and $642 million in the fourth quarter alone.  He has the distiction of suffering the steepest loss recorded in Israeli business history.

A sign of just how bad things are for Lev is this piece of fevered wishful thinking via the Jerusalem Post:

“Signs of growing anti-Semitism in the world may act as a catalyst to apartment purchases in Israel by foreign residents, despite the economic crisis,” Africa Israel said in its quarterly report, posted on the Tel Aviv Stock Exchange’s Web site Sunday.

Yeah, and the pope will change his name to Goldstein as well.

It remains to be seen what impact this might have on Leviev’s settlement building efforts in the West Bank or his funding of Chabad projects worldwide, but especially in Russia.  At the very least, it will certainly put a damper on some of his bad habits, like stealing Arab land in East Jerusalem and building new settlements enabled by Israel’s Separation Wall land grab.  Recently, a campaign by British peace activists moved the British government to cancel the move of its Tel Aviv embassy to Leviev’s flagship Tel Aviv high-rise.  The London stock exchange is considering de-listing his company.  Another set of blows against the injustices perpetrated by Leviev’s empire.

Lev Leviev is someone who has thrived in the high stakes world of diamond mining and real estate.  Like another formerly wealthy right wing Jew, Sheldon Adelson, the global economic debacle has hit his highly leveraged and highly speculative empire hard.  I can only hope that their financial misfortunes will force them to turn off the spigot for some of their worst anti-Arab ventures.

Whatever you do, don’t get your news about this story from JTA, which wrote thus:

The company lost $426 million in 2008, it announced Monday.

Africa Israel…had a net loss of $637 million in the fourth quarter.

I scratched my head for a few moments trying to figure out how a company can lose more in a single quarter of a year than it lost in the entire year.  That would take some financial hocus pocus of Madoffian magnitude.  I figured I better check out Haaretz which provided the correct figures that lead off this post.  In other words, the $426 million figure is wrong.  Who knows where it came from.