rerating the risk

It looks like the financial world is going to have to rerate risk. ie instead of paying 7-8% for junk bonds they (the financial world) is going to have to pay 10%+ for junk bonds. That rerating means that most of the banks/hedge funds/insurance etc are going to have problems as their junk bonds just lost a chunk of money. How long before they acknowledge them. Looks like slow water torture. imho