consumer credit

The last great computer revolution (the internet boom) was run by multiple companies that controlled the key enabling technologies: Intel, Cisco, Microsoft, Apple, and Oracle. With the parallel processing revolution, Porter writes, it’s all Nvidia.

Bank loans are becoming harder to obtain. Meanwhile, credit ratings on corporate bond issuers are improving. The freight train represented by credit tightening is hurtling down the track, but it hasn’t arrived at the station yet.

The auto lending bubble is popping as more Americans are unable to pay their car loans. The tightening credit conditions that are weighing on subprime auto borrowers signal danger for the far larger corporate and government debt markets.

The reality is that the Fed’s actions could have the near-opposite effect of QE. Instead of easing financial conditions and boosting asset prices, they’ll likely lead to further tightening and hasten the arrival of the impending credit crunch.

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