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Greenspan tones down talk of recession

TOKYO -- Former US Federal Reserve chairman Alan Greenspan said yesterday that he didn't think an economic downturn in his country was "probable," toning down his earlier warning over a recession later this year.

"It is possible we can get a US recession toward the end of this year, but I don't think it's probable," Dow Jones Newswires quoted Greenspan as saying in his speech at a forum in Tokyo organized by international brokerage CLSA.

On Monday, Greenspan said a recession was possible, though it's difficult to predict the timing, a comment blamed in part for the global market decline this week.

But speaking via satellite to investors yesterday, Greenspan appeared to want to hedge his bets .

"Things look reasonably good in the short run for the US and the world," he said. But "we can't just assume that this extraordinary period of recovery can extend indefinitely."

Greenspan also said yesterday that the United States has "gone through the major part of adjustment" in housing prices and "the worst is over," though the housing market is expected to remain weak, Dow Jones reported, citing information provided by CLSA.

He said the weak housing market has had only limited impact on consumer spending because consumers have been encouraged by the fall in gasoline prices.