“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.
He also spoke a bit on banking:
“Company after company has been raising capital and they are getting far more than they expected,” said Greenspan, 83, who left the Fed in January 2006 after almost two decades at the helm and has returned to his former role as a private economic forecaster.
With the expansion in market liquidity, “you begin to see, as we are seeing today, a very significant rise in the availability of money,” Greenspan said. As markets improve, “it’s very easy to see that it’s going to continue for an indefinite period,” he said.
I’m probably one of the minority (or majority?) who now takes Greenspan’s words with caution, bordering on refusal to take his word to mean anything.