Greenspan Legacy Destruction Tour Continues

Why oh why do we still listen to Alan Greenspan?

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aogzNoKnAFww

We all know that regulating the banks will hurt credit creation. What do banks do for a living? LEND! If you curtail them from raping you elsewhere they have no motivation or stomach to expand credit. If the banks can't fatten their check books with fees and the such they will not issue more credit cards and loans. You get it? Risk and Reward.

Lending is a tough unpredictable business. This is why the banks try to make up the cost of issuing loans in other places like ATM fees and overdraft charges. If you stop them from doing so the banks will not lend money. There is absolutely nothing wrong with this. Banks need to start running their business like they know what they are doing. The banks need to go back to responsible lending. They need to go back to basics. They need to get out of the derivative business. This is not easy and will be painful for both the banking sector and economy. Here lies the dilemma of extend and pretend.

Greenspan simply is scaring credit addicted consumers into thinking that any type of regulation is bad for them. Well of course when you are an addict any threat of taking away the candy id going to make you want the candy more. Greenspan is a hack. He is simply using scare tactics to achieve what the banks want and that is to continue with predatory banking practices.

Greenspan knows we are in a deflationary environment where the US consumer is in secular deleveraging mode. The banks need to deleverage massively and are just extending and pretending that trillions of bad loans still don't exist. The banks can lie all they want as Greenspan along with Bernanke and Geithner will be Wall Street's wingman in this ludicrous journey to the bottom as the taxpayer will be there to pick up the pieces.

Stating otherwise is intellectually dishonest.

I always leave out hope that Alan Greenspan will have his Lee Atwater moment well before his last days on Earth. When is the question?