Today was Alan Greenspan’s last day as Chairman of the Federal Reserve. The consequences of the massive credit expansion that he engineered will haunt the US and the world for many years to come. The second Great Depression is already beginning as the credit bubble begins to burst in the housing market. The tales of fraudulent and risky lending practices are legion, I won’t repeat them here. But the consequence will be irreparable damage to the credit system, which will lead to depression as, unlike Japan, the US cannot export its way back to health. Ben Bernanke will undoubtedly reduce interest rates to zero at some time in the future. It will not work any better here than it did in Japan.

(In Dante’s inferno, the ninth circle is reserved for traitors who betray their fellows)

Also today the Google speculative fever may be cooled a little, as the company missed analyst’s earnings estimates by a country mile. At one point the stock was down 15% or more after hours. Doubtless the dip-buyers will step in, but the damage is done.