Is it spreading?

I feel like I did when SARS was the big scare or watching Bird Flue outbreaks? I guess that is why they call it contagion!

BNP Paribas Freezes 3 Funds - New York Times:

"France's biggest listed bank, BNP Paribas , froze 1.6 billion euros ($2.2 billion) worth of funds on Thursday, citing the U.S. subprime mortgage sector woes that have rattled financial markets worldwide.

The frozen funds amount to less than 0.5 percent of funds under management for the eurozone's second biggest bank by value, but later in the day a separate European fund valued at 750 million euros was frozen too, and a Dutch bank pulled its planned new listing after suffering subprime losses."

and from The Financial Times:

"The yen spiked higher on Thursday as BNP Paribas became the latest bank to warn of problems related to the US subprime mortgage market.

The French bank said it had decided to suspend redemptions from three of its funds because of what it called a “complete evaporation of liquidity” in certain market segments of the US securitisation market.

The new sent shockwaves through the markets as banks raced for cash, sending overnight rates soaring and prompting the European Central Bank to inject funds into the system to ease liquidity concerns. The Federal Reserve followed suit later... "

Marketwatch on the Fed open market activity

" Federal Reserve carried out a $12 billion one-day repurchase agreement, on top of an earlier $12 billion 14-day repo."

Which is exactly what they should be doing. Even Cramer would likely be happy (or at least happier, he also wants a discount rate cut).