Today’s issue of a leading financial paper, Globes, says it all.

• PMC-Sierra Inc. (Nasdaq: PMCS) is in talks to acquire Israeli fabless semiconductor company Wintegra Inc. for about $250 million.
• NeuroDerm Ltd, which is developing trans-dermal patches for the treatment of neurological diseases,…..received $1 million from Hollywood actor’s Michael J. Fox Foundation.
• Stem cell co CellCure raises $7.1m

Add in the overseas investment in property and the Tel Aviv stock market, and that is a lot of money heading towards the Holy Land.

Why? You cannot ignore the fact that Israel has a major short term economic distortion. The Bank of Israel is using the rate of interest to control a very bubbly (too bubbly) real estate market. (The real solution – more land for building – is not being supported by the government with sufficient force.) Thus, the shekel is seen as a strong bet, especially against the weak dollar. In charge the speculators.

As the shekel continues to fall, so do the profits of exporters. This threatens jobs and future growth. Difficult.

Most other signs are stable. The budget is solid. Unemployment is down to around 6.3%. The stock market is close to a record high. Many of the hopes are pinned on Stanley Fischer, the governor of the Bank, who has just picked up the award as the best Middle East central banker for 2010.

Kudos, but investors look for something more. They look for somebody to start the game off.

A true sign of confidence comes from the octogenarian Warren Buffet. Back in 2006, he sunk US$4 billion into purchasing Iscar. It is rumoured that the deal took a mere 10 days to conclude. And there was no turning back, when a war broke out shortly afterwards with Lebanon, whose border is close by.

In today’s Hebrew press, Buffet granted an interview. He observed that the intellectual capacity of the country gives it a clear economic advantage over competitors. “We are always looking for new investments in Israel”.

Who’s next?