Private equity groups raised large funds in the heyday before the credit collapse. Time is running out to spend that money and they either use it or lose it. I doubt that these "Masters of the Universe" are going to let those fees get away from them, whether there are bargains to be had or not.
Recently we have seen a pickup in LBO activity and M&A activity. I believe this puts a floor under the market for as long as it continues. As long as the junk bond market supports this activity I don't believe it will end.The sovereign and municipal debt issues are starting to spill over into the junk market, but rates are still very supportive.