LIBOR overnight euro rates surge to six-year high.
The stock market is caught in the cross hairs of the situation... worse yet, the Fed is caught in the cross hairs. You can also throw in many 1 yr ARM holders whose rate is tied to the LIBOR universe.
Yen futures are up 49 points this a.m... keep an eye there for further unwinding, provoked recently by turmoil in other markets. The carry trade is all about tolerance to risk and is taken back when risk aversion rises.