MFC
MFC is not losing on their Seg funds nor on their guarantee variable annuities.
They collect front end fees and annual fees for investing these clients' funds
.So if the markets drop the client's portfolio will drop, so why does MFC
has to write off these drops as their own losses?
Besides the Markets are all up over 10% in the last year, yet MFC is writing off short term
drops. Don't they have to adjust back up with the markets because they are long term investors?
They also invest in Bonds ... most likely laddered . If you hold Bonds to maturity
you will get back your principal plus your interest.
Interest rates have been down for a few years now, and it all depends when you invested
in the Bonds, you might get higher rates or lower rates but you only loss on
Bonds if the Gov't or Company goes bankrupt.
Writing off losses on guaranteeing to return someone's own money because you think you might
not be able to repaid it now when it is due way in the future, and write-offs on sensitivities
to interest rates are all farce.
MFC has foreseen doomsday and has cut the dividend and issued more shares to raise capital
The doomsday scenerio did not happened so building that fortified bunker was unnecessary.
MFC can control and measure their own extent of their sensitivities to the markets and interest rates,
so to justify that their prediction was right, they execute this big write offs.
Only MFC stock is heading to retest the March 2009 " fear of depression" drop.
Only my opinion