Another sub-prime quake

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Good morning. That bump in the night you heard was not the 4.5 earthquake that shook parts of SoCal. It was the sub-prime mortgage crisis spreading to Europe (our sub-prime crisis, their money invested in it).

Reuters via CNBC: ‘France’s biggest listed bank, BNP Paribas, froze 1.6 billion euros ($2.2 billion) worth of funds on Thursday, citing U.S. subprime mortgage sector problems.’ The bank cited the ‘complete evaporation of liquidity’ in parts of the U.S. market.

Is that a big deal? Central bankers in Europe and Washington believe it is. They rushed to pump liquidity into the banking system. The initial Wall Street reaction was not good -- stock futures falling before the opening bell. Stay tuned.

Note: When the economy is humming along and there are no problems on the horizon, the President of the United States does not cross the street to the Treasury Department to meet with reporters on short notice to reassure the nation about the strength of the economy. The administration understands this is serious stuff.