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Retail investors, according to one source we've seen, now own around 37% of the corporate bond market.

What do we know about retail investors in general? They are usually late to the party and even later to leave. Since central banks around the globe have implemented thier ZIRP magic, yield-starved investors have flocked into bond funds especially one of Wall Street's latest love affairs, ETFs.

Concerns about ETFs continue most of which are directed at the retail market and hold the promise of instant access to one's funds. Many of these charge low fees, another attraction to bring in the retailers. Such has not escaped the view of regulators as just last month Fed Chair Janet Yellen brooked the idea of slapping exit fees on such funds to prevent a panic run.

One has to admit Yelllen's point is interesting given that she and her minions at the Fed have contributed mightily to the yield-hungry mania. But we'll leave that for another time.

Though yield-starved includes more that just the retail crowd, it's the retailers most likely to get crunched when crunch time arrives. And it will. Liquidity is and has been the fear as this yield-chasing climate continues to build this year. Some strategists say when it dries up as interest rates jog back to more normal levels a serious logjam is possible.

According  to the Financial Times, since 2008 there's been a 70% decline in measures used to quantify liquidity such as spreads between bid and ask and "the amount of debt on the balance sheets of dealer-banks."

There's still another side to this coin since most of  the junk bonds are of the corporate pedigree. Here's a quote from Jaime Dimon, chief executive of JPMorgan Chase, at a recent conference.

"We've lost tremendous sums of money on FHA...the real question is should we be in the FHA business at all."

Dimon is talking about home loans brokered through the Federal Housing Administration, an area where the bank had to cough up $600 million in fines to the government for faulty loans associated with the last real estate bubble.

The home mortgage business has slowed considerably, not the least of reasons is more, harsher government regulations like Dodd-Frank. Dimon is saying something quite simple about markets in general that some never get. Like a water filled balloon, if you push on it in one place it will just expand somewhere else.

That somewhere else for banks of late is the corporate bond market. According to the Financial Times, the "amount of corporate bonds outstanding has reached $9.9tn, easily surpassing $8.1tn of residential mortgage-backed securities, including those guaranteed by the US government's housing financiers."

Whereas Wall Street once turned out huge amounts of CMOs, collateral mortgage obligations, all bundled together, leveraged and sold, it's now cranking out CLOs, collateralized loan obligations. Investors see the higher yields on these instruments, their lower default rate compared to CMOs and for many it's a no-brainer.

Regulations are just like any other water filled balloon. Regulators push and the balloon bulges somewhere else. As one banker put it:  "You can't lend and make a basis point or two and have to pay 40bps in legal costs. Those are the the current economics of the business."

Summarizing the present hot corporate bond market another banking official noted: "This can go on for quite some time, but we'll eventually reach a point where it goes too far out of whack to the basic fundamentals in a similar way to the housing market before 2008."

Look no further than the options market for signs of similar concern. Here's a quote from MoneyWatch from yesterday's Wall Street Journal.

The options market is flashing concern about high-yield bond exchange-traded funds.

Demand for protective “put” options in the market’s largest high-yield bond ETF versus bullish options this month crept up to its highest level since May 2013’s  “taper tantrum,” when hints from the Federal Reserve on changes to its bond-buying program sent high-yield bonds, and other rate-sensitive assets, reeling.

Dimon's point leads to another one fundamental to all markets. Like any good prostitute, when conditions change you move to where the money is. If you have any doubts, check out the fracking oil boom up in North Dakota.