Easy Credit: The ONLY Thing Keeping The Lower & Middle Classes From Taking Up Pitchforks & Torches And Eating The Rich

When the sub-prime mortgage market tanks, things could get dicey.

It all started a few weeks ago with HSBC (HBC) warning of higher
delinquencies in their mortgage business and was quickly followed by New Century (NEW) announcing that they would not make a profit for the foreseeable future. All that now seems so far away. Making a profit is the least of New Century's worries as higher delinquencies and controversial lending has prompted an investigation into its business, not to mention that the company's almost $3 billion market cap has been wiped out.
Last week, Countrywide (CFC) stopped offering 100% financing. H&R Block's (HRB) Option One and some others followed suit. If this tightening flows through to other areas of the finance spectrum, like auto makers and credit cards, it could spell the end of the fierce consumer spending seen in the US these last few years. However, what are the chances that credit cards will start tightening their lending guidelines too?
If the above does indeed happen, it will affect equity markets in a big way. We are a nation that operates on credit a little too freely and putting additional boundaries on credit cards for sub-prime audiences would result in a huge slowdown in the economy. Retailers would be impacted the worst in this
scenario.