Readings: Sensex up by a record, RBI’s Financial Education site, Making 690% from subprime
- Business Standard: BIGGEST-EVER RALLY: Sensex zooms 894pts
The Sensex touched a high of 19,988, and finally settled with a huge gain of 894 points (4.7%) at 19,929 - the biggest-ever single-day gain in absoule terms for the index.
The BSE Bankex and the Oil & Gas indices soared 6.5% each . . . The IT index zoomed 4.5% , and the Metal index gained 4%.
Domestic institutional investors (DIIs) were net buyers of Rs 567.04 crore (provisional) . . . Foreign institutional investors (FIIs) were net buyers of Rs 163.02 crore on Wednesday.
Two huge days for the banking sector. What’s up? Can’t just be 30% credit growth.
- Reserve Bank of India: RBI Financial Site
The Reserve Bank of India has undertaken a project titled “Project Financial Literacy”. The Objective of the project is to disseminate information regarding the central bank and general banking concepts to various target groups, including, school and college going children, women, rural and urban poor, defence personnel and senior citizens.
The project has been designed to be implemented in two modules, one module in which Money Kumar will familiarise you with the role and functions of the Reserve Bank of India; and through the other module, Raju will introduce you to banking concepts.
U.S. hedge fund manager Paulson & Co. has turned an investment of almost
$500 million at the start of the year into almost$3.6 billion by taking out a form of insurance that started paying out as soon as subprime mortgage securities lost value.Paulson’s Credit Opportunities fund has made a gross return of 690% . . .
Banks were offering credit default swaps, a kind of insurance contract, on the BBB-rated tranches of securities backed by U.S. subprime mortgages. The buyer had to pay a premium of 1% a year to the banks, which undertook to pay out the value of any falls in the BBB tranches.
Like buying a boat-load of put options just before a market crash!
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