A radio station called first thing in the morning.

"Be prepared," it instructed us. "We'll want an update of the reactions on the market the moment it opens plus commentary on how the early elections will affect stocks trading in Tel Aviv."

"Leggo," we tried. "Nothing will happen. We understand that you're all excited the elections have been brought forward by two years, but don't expect the

Tel Aviv Stock Exchange

to get keyed up. Won't happen."

Nothing doing, indeed. At seven minutes past 10 o'clock we were shepherded to the phone to report live. "Good morning, Israel. Stocks are down 1 1/2% at this time because of the sharp decline on

Nasdaq

last night," we reported.

Silence from the other end of the line. "Thank you," they finally said. The radiophone interview was at an end.

They were disappointed. We were supposed to deliver red-hot political-economic goods to kickstart the morning news and all we had to say was "Nasdaq."

The calls kept coming, by the way. But by noon, when all we had to say was that stocks had cut morning losses and were now off by less than half a point, the radio people got it. If they wanted a little color to decorate the drama coming from the Knesset, they were looking for it in the wrong place.

Did you think the Tel Aviv Stock Exchange would collapse with the government? Did you anticipate violent fluctuations and lively volumes of trade? If you did, you were wrong. If anything, many traders think that bringing the general elections forward from mid-2003 to mid-2001 reduces uncertainty in the market. A cloud has been hovering over the incumbent government, led by

Prime Minister Ehud Barak

, for more than six months now. Now at least people know where they're heading: For elections.

The Tel Aviv exchange has been taking the political dramas being played out in recent weeks in stride. It's been behaving like a foreign investor: All it cares about is the long-term prospects of the peace process. When it became clear in October that the process was off the rails, the market reacted strongly. For now, no new direction has emerged, so politics is not moving the market.

Investors' indifference to political developments is also a function of the government's lack of economic policy. For months, the market has been ignoring Jerusalem, taking for granted that no relevant news would be forthcoming. No reforms, no major changes in the budget, no privatization. All the government was expected to do was to leave most of the business sector alone to do its thing.

But Israel's economic sectors do have a problem, and it isn't politics or the fluctuating date of elections. Until recently we called it "Nasdaq." As it tumbled, the huge influx of foreign investment to Israel juddered and slowed.

But now the fear isn't confined to what Nasdaq will do. People are beginning to wonder whether the technological boom resounding throughout the world is perhaps losing its resonance. High-tech has been Israel's mainstay. For Israel, that scenario is very worrisome indeed.

Some might believe that deals like the takeover of Israel's

VisionTech

by

Broadcom Corporation

(BRCM)

for $780 million mean it's business as usual. But it isn't. Just look at how far the stock of Broadcom has fallen in the last two months: almost 70%. Israel should adjust its expectations accordingly.

The collapse of the government does not in itself particularly interest foreign investors. But directives from the

U.S. State Department

not to travel to Israel -- that's something else altogether.