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Greenspan Sees ‘Seeds of a Bottoming’ in U.S. Housing Market

By Vivien Lou Chen and Dawn Kopecki

May 12 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said that the U.S. housing market may be on the verge of recovery and that it’s “very easy to see” financial markets continuing to improve.

“We are finally beginning to see the seeds of a bottoming” in the housing industry, Greenspan said today during a conference of the National Association of Realtors in Washington. The U.S. is “at the edge of a major liquidation” in the stock of unsold properties, which may help to stabilize prices, Greenspan said.

Home-sales figures in recent weeks have shown a slower pace of decline, and the slide in property prices has eased, according to gauges including the S&P/Case-Shiller index.

The former Fed chief, who was among the first prominent economists to warn about the risk of a recession in 2007, also said “company after company has been raising capital and they are getting far more than they expected.”

Companies in the U.S. have sold bonds at a record pace so far this year, including a $3.75 billion offering from Microsoft Corp., the world’s largest software maker, today.

To contact the reporters on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net; Dawn Kopecki in Washington at dkopecki@bloomberg.net

Last Updated: May 12, 2009 15:08 EDT

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