Major Money Market Fund Freezes Redemptions

[Editor's Comment: This is a huge story. Money Market funds are traditionally considered "low risk" but it turns out that many of them are holding toxic Mortgage-Backed Securities. Consider protecting yourself by buying some gold & silver.]

NEW YORK (MarketWatch) -- One of the first and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."

Primary Fund RFIXX , a $64 billion fund managed by money market fund inventor The Reserve, said late Tuesday that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero.

As of 4 p.m., the value of the fund's share was 97 cents. The Reserve said that redemption requests received before 3 p.m. will be paid out at $1 a share.

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