Here is another issue that could force a carry unwinding.
A story from Bloomberg.com reported that there is
no Junk Bond market in Europe anymore. While this would be good for the future as there will be a lower probability of significant levels of default, it will also cool growth as many lenders aren't able to access funds. What's more, as the market shrinks, there is less interest and therefore less liquidity for the existing issues - making another crunch a much greater threat.
There are a number of problems lining up for the world's credit markets that could catalyze the next credit crunch (and perhaps a financial crisis). Anyone think this will be an issue? What is the breaking point going to be?
