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.


I can only guess that Greenspan is tailoring his comments to the trade group that is paying him a six-figure speaking fee.  Either way, his stated perspective is fantastical and defies existing data. 

I would very much enjoy reviewing the materials upon which Greenspan is basing his predictions.  Should anyone come across this information in a public format please don’t be shy.

There is no possible way, given today’s economic REALITY, that the Housing Market is on the verge of recovery.  Nor is there any chance of a major liquidation of unsold houses in the near term.  In fact, the opposite appears more likely.  It is possible that Mr. Greenspan defines a slower pace of housing price declines as “a recovery”, in which case the Japanese have been “recovering” for over a decade now.

The last glimmer of the Oracle’s sheen appears to have faded.



Epilogue: Headlines from the Day After Greenspan’s Comments

May 13

Retail sales drop unexpectedly in April (AP)

“WASHINGTON – Retail sales fell for a second straight month in April, a disappointing performance that raised doubts about whether consumers were regaining their desire to shop. A rebound in consumer demand is a necessary ingredient for ending the recession.

The Commerce Department said Wednesday that retail sales fell 0.4 percent last month, much worse than the flat reading economists expected. The April weakness followed a 1.3 percent drop in March that was worse than first estimated.”


RealtyTrac: April foreclosures rise 32 percent (AP)

MIAMI – The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, according to data released Wednesday.

More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac Inc. said. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since the Irvine, Calif.-based foreclosure listing firm began its report in January 2005.

April was the second straight month with more than 300,000 households receiving a foreclosure filing, as the number of borrowers with mortgage troubles failed to abate.

The April number, however, was less than one percent above that posted in March, when more than 340,000 properties were affected. The March data was up 17 percent from February and 46 percent from a year earlier.

"We've never seen two consecutive months like this," said Rick Sharga, RealtyTrac's senior vice president for marketing. "It's the volume that's surprising."