its the combo of the new RICO lawsuit and the egregious and probably frivolous 150MM suit and likely the perception that MBS is not safe... 2billion of AAA MBS seems a little dicey but I am sure they are either gauranteed by GSE (as are 90% of new mgts.) or they would sell them and reinvest. Hoping they can get some gold or silver exposure as inflation risk is their biggest LONG term risk I would imagine (life insurers are basically lenders in that sense)
Bottom line is they will keep earning money and they are at a rediculous valuation so that the risk is likely well worth the reward. Hopefully they dump MBS and buy some hedge funds like Greenlight or Balaestra or Hussman Strategic Growth.... cant see how they can cut a nice return in the mortgage game going forward.... as printing gagillions by the gov. not deflationary IMO.
I own some and am thinking about buying more. nlevis2, do you know if the company has to mark to market it's MBS? If not, presumably that's why they are trading at such a discount. Given that most of them are GSE backed, they will return to par eventually, but in the meantime getting rid of them may require selling them at a discount in order to invest in something else.