bear_mkt's  Instablog

Bloomberg reports that Primerica's management team is looking to buy the insurer out of the failing Citibank empire. Citibank failed in its own efforts to sell Primerica, likely because buyers were hoping for a fire sale price. I wish Primerica's team success.

Primerica is a financial sales operation, specializing in term life insurance and financial products and targeting middle-income families. Its relies on an army of 100,000 part-time sales agents.

The Primerica operation, unlike much of Citicorp, is a solidly profitable operation earning $355 million on $2.2 billion sales last year.  According to ratings at The Street as re-published by Weiss Research, Primerica retains high ratings for safety.

The worst of  the residential real estate foreclosure crisis has passed...for now. Subprime foreclosures appear to have crested and the pundits are chirping like the first robins of spring. Don't be deceived. There's another wave coming: Option ARM's. The Option ARM re-sets will begin to rise next year and peak in 2011.

Here is a clip in which Professor William Black discusses the problem. Black says the crisis is serious but thinks it can be solved  by action at the consumer level, but that won't be solved because we're doing the wrong thing (which is pouring more money into large banks that aren't lending.)

Martin Weiss of Money and Markets has also warned of the Option ARM crisis.

"...the currency (Zimbabwe dollar) was worthless and there was nothing to back up its value."

From the Zimbabwe Times, below: the "suspension" of the Zimbabwean dollar due to runaway inflation is attributed to a Government rapidly printing paper money. 

Now check out Mogambo Guru's commentary for an analysis of the US currency's status. Currency in circulation has risen 10% over the past year, up $90.4 billion to $903.3 billion.

Bloomberg is running a story on the Yellowstone Club scandal and bankruptcy. Yellowstone is a millionaire's club in Montana that counts a number of prominent people among its members.

It is a personal, rather than a corporate, story, but shows the risks of excessive corporate debt in the current economy (read: GGP), leveraging up to buy a property you want (read: Cerberus/Chrysler, your margin account) and funding long assets with short-term debt (mortgage REITs, your margin account)

Story line: Husband and wife run millionaires resort club, get divorced. Husband is in real estate and stays debt free. Wife has heavy debt load, but wants club.

I'm still bearish long term but one new indicator I've been following is signalling a market bottom and a buying opportunity. It is a new proprietary indicator, the Bloomberg Cliche Indicator.

The print media has been a contrary indicator since Business Week's "Death of Equities" 1979.  The new BC indicator is grounded in the broadcast media. It is a coincident,and perhaps, a leading, indicator.

Bloomberg Radio has savvy reporters who interview and report on many top fund managers, central bankers and influential political figures. Live reporting and interviewing gets reactions and gives a fresh immediacy to any ideas presented.