Maybe Dominic D'Alessandro now has some idea what it means to lose $35 billion?

Today we learn that Manulife lost $1.8 billion in the latest quarter, due to insufficient hedging of its variable annuity business. That can only be considered good and just.

Manulife lobbied the Harper government to kill income trusts so it could sell more of its variable annuity products like Income Plus, conveniently launched the week following Flaherty’s income trust tax.

The income trust tax was simply the means by which commercial groups like Manulife killed the competition, under the auspices of the compliant and willing (some would say corrupt) Harper government.

The code word used for “killing the competition” was “leveling the playing field”.

The result was that Canadians lost $35 billion of their hard earned life savings. Nice?

Now that very variable annuity product that Flaherty assisted Manulife in selling by way of tax legislation, is tanking Manulife’s earnings to the tune of $1.8 billion.

Talk about Schadenfreude! Schadenfreude being the just pleasure derived from the misfortunes of others.

Meanwhile Flaherty’s false tax leakage claims, that were advanced in the interests of parties like Manulife, are merely garden variety fraud. What I call Gardenfraude, the unjust pleasure derived by elected politicians in screwing honest Canadian taxpayers on behalf of special interests and the providing of false justification for doing so.


Manulife loses $1.8-billion
Thursday, February 12, 2009

Manulife Financial Corp. posted a fourth-quarter loss of $1.87-billion on Thursday, after the insurer took a pounding because of its exposure to stock markets.

The loss, which amounts to $1.24 per share, compares to a year-ago profit of $1.14-billion.

The insurer warned in early December that it could be looking at a loss of $1.5-billion, because steep declines in stock markets were forcing it to sock away billions of dollars to support its variable annuities business.

“Unfavourable movements in interest rates late in the quarter exacerbated the impact of unprecedented declines in equity markets,” stated chief financial officer Peter Rubenovitch. “Even after this quarter's very sharp drops in equity markets and interest rates, our balance sheet remains strong and our capital levels are amongst the highest we have ever enjoyed.”

Prior to Thursday's announcement, analysts were watching for a loss of 94 cents per share.

Manulife chief executive Dominic D'Alessandro announced last year that he would step down this May, to be replaced by his successor chief investment officer Don Guloien.

The need to raise capital to support the variable annuities business caused Manulife to issue more than $2-billion worth of common stock in December.

Variable annuity products are roughly equivalent to private pension plans for individual investors, where Manulife takes a customers' money, invests it in funds, and promises payments and guaranteed benefits down the road in return for a fee. When markets drop, the company must build up reserves to protect against any potential shortfall in the amount it has promised to pay customers in the future.

Late in the quarter, Canada's banking and insurance regulator, the Office of the Superintendent of Financial Institutions, changed the rules to give life insurers a bit more breathing room on their capital levels.