Why is the Carry Trade DEAD?

I've read that the carry trade is dead.

I'm an idiot newbie, so please explain to me in "idiot newbie" terms, how/why the carry trade is dead. Seems to me that selling JPY at .5% and buying NZD at 8% ... that's a lot of interest.

So what am I missing?

It's dead for banks who have no credit lines left and are getting margin calls for over leveraging on bogus investments offered up by Wall Street

Risk is a no no in the current market and the carry trade (of the calibre that drove the trade until recently) is wayyyy up there in terms of risk.

Ok, thanks for the reply... and you're defining Risk as ???

Risk == Thinking that AUD/JPY or NZD/JPY will under perform the interest differential?

Are people generally thinking that the AUD and NZD are going to DEcrease in value? ...and the JPY is going to INcrease?

Sorry for all the questions... just trying to piece it together.

Yes, supposedly the risk is that the pairs will lose more in value than interest gained. The fact is though anyone really doing a carry trade strategy is hedged so, it's my opinion the low availability of credit and high cost to borrow makes people even more risk adverse.

AU, NZ and Canada are countries with a very low population and a very high amount of the REAL stuff available-- oil, gas, gold, silver, coal, uranium, butter, meat, wheat, you name it. Japan has a VERY high population on a small piece of land and no natural resources whatsoever. Add to this tremendous debt, a very old population and constantly growing costs of these resources. One can live without Canon or I-pod or whatever, but without meat&wheat, not really.