RE: MFC TodayThe Bond market is 5 times the Stock market size, and with this flight to Quality in this turmoil market,
MFC bond assets have appreciated....Bond value has gone up with that of Gold
Relatively MFC investments should go up 4 times.
So why is MFC suffering?
The mark to market reporting, if the Bond yield goes down, MFC has to increase their reserve,
but the increase in Bond prices stays hidden until the Bonds are sold.
The first thing Mr Guloien did when he took office was to cut the dividend ( no other Big Cap company did)
To justify this move, he wrote off $3B goodwill and put aside $Bs for a rainy day.
He now has the best MCCSR of 241, well above the requirement.
The goodwill and reserves are not lost, the goodwill can show up as profits on future asset sales,
and the reserves are future losses, written off now, thus beefing up future profits.
MFC closed today ($12.77) near its year low of $12.21.