fallout of subprime slide continues to spread

--Insurers took a hit too. AXA SA money-management unit($650 bil), European, offered to cash out investors as the fund size shrank 40% last month due to exposure to U.S. subprime market. --Most mututal funds sheltered from the storm as they invest predominantly in high-grade agency MBS. Few execptions like Fidelity Mortgage securities fund even it only has an stake of 2.5% exposed to subprime MBS. --CDOs Managers are feeling the pressure too. Credit-Based Asset Servicing&Securitization LLC dubbed C-BASS warned it was being squeezed by unprecedented margin calleds from its lenders. Among big managers who have seen their CDOs put on notice for possible downgrade by Moody's Corp: GSC Partners and AGA Capital Holdings Inc. Some managers avoid riskier debt, such as second-lien mortgages in its CDOs.