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[quote="Guest"]The U.S. Federal Reserve on Thursday said it added $12 billion of temporary reserves to thebanking system through 14-day repurchase agreements.

The amount was more than double the $5 billion of temporary reserves added via 14-day repos last Thursday.

http://www.cnbc.com/id/20195270
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U.S. stock index futures extended declines after the Federal Reserve added $12 billion in temporary reserves to the banking system following indications that the subprime mortgage fallout has spread to three hedge funds in Europe.

"The investors are like deer in the headlights," said David Dietz, chief investment strategist at Point View Financial Services. "Those initial hopes going back a couple of months that the subprime crisis could be contained in terms of asset class and geographically are completely off the table.  As a result, investors are left scratching their heads."

French bank BNP Paribas froze funds with about $2.2 billion in assets saying the lack of liquidity in the U.S. mortgage market made it impossible to value the funds fairly.

Shares of BNP fell 3.2% and the European banking sector declined by 1.6%.

The European Central Bank injected nearly 95 billion euros into money markets to try to relieve credit jitters.

"There will be more bad news from the banking sector," Manus Cranny, head of sales at Cantor Index, told "Worldwide Exchange." "We are fully prepared for this … it's a cautious time."

The yield on Treasury bonds sank across the board following the news as investors sought the safety of government-backed assets.

http://www.cnbc.com/id/20185535[/quote]

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