Hold on to your wallets, folks. 

The stock market has been on a winning streak and Wall Street is starting to feel its oats once again.  Yes, you guessed it, those same people who brought us the biggest mess since the Depression because they convinced us that markets could defy gravity are again banging the drum with the message that the seeds of a recovery are starting to bloom.

Really? 

At this point the level of skepticism about anything Wall Street says should be so high that any positive remark sets off Geiger-counter-like beeping. Wall Streeters made tons of money after all by getting the maximum number of suckers to buy into the deals and bargains and can’t-lose situations they created, many times out of bubble soap.

They’re paid to highlight the seams of gold among the dross, no matter how much dross there is.   Need I tell you that dross is everywhere and any gold to be found is fool’s gold?

And when things go bust, well, that’s equities for you.  Seems there really was some risk involved after all.

As for the recovery, I know it doesn’t serve their purpose, but I suggest anyway that these financial wizards leave their towers and see what’s happening on the ground.  Down here, the recovery isn’t around the corner.  It hasn’t even gotten into town.

Agents and insurance companies know it; retailers know it; newspapers and magazines know it; manufacturers of goods and services of every stripe know it.  Things are terrible.  And if they’re not getting worse, they’re hardly getting better.  People all over are scared for their jobs and until that fear is allayed and the job market starts to come back, nothing much is going to change.  Here on the ground.  

There’s a good reason for the old adage “once bitten, twice shy.”  The collective ouch that our finances have experienced as a result of getting bitten should give us pause about getting close to this particular dog again.  Even if the dog is wagging its tail.

Caveat emptor.

That things are bad is no secret.  But every once in a while, as we slog through this meltdown, a statistic or set of data just pops out and reminds you that no matter how bad you thought things were, they’re worse.

What did it for me this week was reading through LIMRA International’s release on first quarter sales figures of the spectrum of life insurance products.

Even old-timers might have a hard time remembering when sales took such a nosedive, since as LIMRA’s CEO Bob Kerzner remarked, “…the last time quarterly sales dropped this much was in 1943.”  (And if you’re one of those who can sit around the cracker barrel and reminisce, “If you think this is bad, sonny, you should have been around in the summer of ‘43…”, well, all the more power to you.)

Overall, LIMRA reports, premium from individual life sales dropped, slid, plunged, plummeted, nosedived (take your pick) an amazing 26% from the year before.

Every product line was hit, LIMRA says, with variable life premium off a massive 61%.   Universal life, down 33%.  Variable UL, off 61%. 

The only two lines that didn’t enter double-digit loss territory were term (off  4%) and whole life (down 5%).

Additionally, totals for face amount and number of policies sold were off 8% in both cases.

These stats alone show how much people are hurting and how far down on the totem pole life insurance (unfortunately) sits when filling your stomach, keeping the roof over your head or the repo guys at bay are more important and pressing than what’s going to happen if you die.  Some of these people, after all, feel like they’re dying every day.

I can’t remember for a fact, but it seems to me that I’ve already used the mythic image of Sisyphus to describe the life insurance industry’s seemingly doomed challenge of getting Congress to approve an optional federal charter.  Just when the king of Corinth gets the stone almost to the top of the hill, down it goes. 

So, not to repeat ourselves, let’s turn to another myth to describe where the industry is now in what has come to be a decade-long quest.  My Webster’s gives this description of Tantalus: “a son of Zeus, doomed in the lower world to stand in water that always recedes when he tries to drink it and under branches of fruit that always remain just out of reach.”

Needless to say this is where the word tantalizing comes from.  And tantalizing is a good word for how the life business (or at least many of its companies) sees the prospect of an optional federal charter.  We’re not really sure how it’s going to work, but we know we’re going to like it. 

Actually, not knowing how it’s going to work may be part of the attraction for these companies, since they feel they are quite familiar with what they perceive as the clunkiness and annoyance of state insurance regulation.

There’s another factor going on here.  In two words: Regulatory envy. 

Life insurers are such a well-behaved bunch, but among those businesses that are financial colossi (banks, mutual funds, life insurers), they get the least respect.  This, of course, brings to mind another mythic figure: Rodney Dangerfield.

Life insurers look at banks, for instance, and are just green over the fact that banks can pick their charter and thus choose to be either federally or state regulated.  And if they choose to be federally regulated, boy oh boy, what a bag of goodies that brings with it.  Banks don’t have to be well-behaved, always minding their P’s & Q’s.  Banks can do all sorts of things that life insurers in their wildest dreams wouldn’t think of doing and their regulators will usually cheer them on or, at the very least, bite their tongues. 

Life just isn’t fair when you don’t have a federal regulator in your court.

So, what happens when-once again–the water seems to be within the reach of Tantalus?  What else?  The New York Times writes an editorial saying in effect that drinking the water is the worst thing that could happen anyway for poor old Tant and everybody else.

And so on May 21 the Times blasted the OFC bill introduced by Rep. Melissa Bean, D-Ill., and Rep. Ed Royce, R-Cal., saying, “If the bill were enacted, the race to the regulatory depths would continue, and the nation would be headed in exactly the wrong regulatory direction.”

Needless to say, those officials who have been doing the heavy lifting on this issue for years reacted with fury.  The Times “has it wrong,” said the American Council of Life Insurers.  The “editorial is misleading at best,” said a spokesman for the Financial Services Roundtable.  

Pretty strong words for organizations that usually step more gingerly when criticizing the newspaper of record.  

Then, providentially it would seem, the very next day Rep. Paul Kanjorski, D-Pa., introduced his own bill that creates an Office of Insurance Information in the Treasury Department. The OII is often seen as a precursor to an OFC, a foot in the door of federal regulation, so to speak.  Life insurance officials applauded.

This bad news-good news rhythm should now be second nature to the life industry in regard to an OFC. And as every setback makes the prospect of success so much more tantalizing, the water seems more and more like nectar and the fruit positively ambrosial.