The Polar Letter
Issue Nov 08 - 05
Both unemployment and
bankruptcy filings are on the rise and we are all but
certain that both will increase materially in the coming
quarters. According to the American Bankruptcy Institute,
consumers here in the US filed just a bit more than 106,000
bankruptcies in October, 40% more than a year ago and 20%
more than in September! The ABI’s Executive Director, Mr. Gerando, made it clear that still worse
figures lie ahead. This following a revamping of the
bankruptcy laws earlier this year, which supposedly made it
much harder to go bankrupt than it had been in the past.
The center for automotive
research recently released a rather ominous study concerning
the likelihood of a substantial contraction (merger or
failure) in the US automotive industry and its immediate and
trickle down effects upon unemployment and tax revenues,
etc. This is a must read at
www.cargoup.org.
In the past issues, we have
opinioned that the insurance industry is to be avoided in
any investment form including annuities because of, among
other things, its exposure to the municipal bond insurance
companies. Today, AMBAC and MBIA posted much wider than
expected losses on debt instruments. Concerning this
situation, it is interesting to note that California is
dealing with a seven billion dollar deficit and New York’s
Governor Paterson says his state faces a forty seven billion
dollar deficit over the coming six quarters. Please keep in
mind that troubled states and municipalities do not have the
ability to print (print money) their way out of fiscal
difficulty, a fiscally irresponsible activity utilized by
our Federal Government.
We see no reason for optimism
concerning the traditional investment markets, and do not
believe that this bear market will conform to the norms of
historical bear markets.
As our regular readers are
aware, our firm utilizes various forms of alternative
investments in the management of client portfolios. We have
among other opportunities an individually managed futures
account with has a three year average annual return of in
excess of 40%. Naturally, such an investment is not
suitable in all portfolios, and past performance is not
necessarily indicative of future results. Please call us
for further information including a disclosure document. We
encourage readers to read an informative piece published by
the Chicago Board of Trade on Managed Futures at:
www.cbot.com/cbot/docs/67790.pdf
Michael C. Jordan
President
Professional Biography
Polar Investment Counsel Inc is a federally registered
investment advisory firm and broker dealer, which manages
customer accounts on a fee or commission basis. The firm’s
senior principal, Michael Jordan, has nearly thirty-five
years of industry experience.
Note: The views expressed above are those of
Michael C. Jordan and not that of PICI. The material
presented is based upon information believed to be accurate,
but not guaranteed.
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