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Originally Posted by Slava
The 4Q loss for Manulife is nothing compared to the AIG situation. AIG was in a spot where they were losing money and on the hook for a huge amount of further losses because of their insuring of CDS issues. Manulife has taken a 4Q loss which was a little larger than projected due to its exposure to the equity market. Manulife is still very well capitalized and with their income as diversifed as it is, Manulife is still incredibly strong and sturdy. Most analysts suggest that while the losses here might be the worst of the bunch, the recovery over the next year or two will be the best of the class.
Your right it is nothing compared to AIG but it is still a very ugly loss for Canadas largest insurer. In December they came out and warned of a $1.5 billion loss so at $1.87 billion they missed their guidance and the stock goes into the penalty box as a result. They also had $1 Billion exposed to sub-prime mortgages. BTW : I would buy Manulife if it goes below $15 but I wouldn't touch AIG even though it is around $85 cents today...
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Right, but that $1 Billion is out of $165 Billion of investable assets...so not even 1/2%. If Manulife goes below $15 there is something very wrong. That would be over 25% from where they are today (IIRC), and they are still in the bidding for AIG Asia which will make them the largest insurer in the world.