BNP Paribas Freezes Funds as Loan Losses Roil Markets

[katty]

more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aNIJ.UO9Pzxw&refer=worldwide

BNP Paribas Freezes Funds as Loan Losses Roil Markets (Update5)

By Sebastian Boyd

A pedestrian passes a BNP Paribas bank Aug. 9 (Bloomberg) -- BNP Paribas SA, France's biggest bank, halted withdrawals from three investment funds because it couldn't ``fairly'' value their holdings after U.S. subprime mortgage losses roiled credit markets.

The funds had about 1.6 billion euros ($2.2 billion) of assets on Aug. 7, after declining 20 percent in less than two weeks, spokesman Jonathan Mullen said today. The bank will stop calculating a net asset value for the funds, which have about a third of their money in subprime securities rated AA or higher.

BNP's announcement sent its shares down 3.4 percent, pulled the benchmark European stock index lower by 1.9 percent, and helped U.S. Treasuries rally for the first time in four days. Investors are shunning bonds backed by home loans after late mortgage payments by borrowers with poor credit histories rose to the highest since 2002.

[marmar]

1. Global economic collapse en route?

:scared:

[katty]

3. well, clearly something is happening, generally this kind of

activity precedes (open) war declarations...on on the way to more open confrontations-we shall see.

[enid602]

2. mean

Does this mean that people who invested in these fuds can not sell their holdings at this time? Is this analogous to the runs on banks in the '30's?