US'Paulson says housing correction nearing end but subprime woes to continue |
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Thu, 21 Jun 2007 13:01
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WASHINGTON (Thomson Financial) - The US housing market correction is 'at or near the bottom' but the fallout from problems in the subprime mortgage market will likely continue, Treasury Secretary Henry Paulson said.Paulson said losses related to foreclosures in the subprime market were to be expected in light of the 'major' housing correction the US has gone through.At the same time, he believes the risk in this area is 'largely contained,' and poses no threat to the overall economy.Paulson made these comments as two hedge funds managed by Bear Stearns were reported to be on the verge of collapse because of their investment in securities tied to subprime mortgages. Paulson was careful, however, to stress that he was not commenting on the specific situation of any company or hedge fund in particular.Paulson also said Treasury has been examining US tax rules for private equity partnerships that go public, but said there is no deadline for a decision in this area. Paulson again stressed his comment did not relate to any specific company, although private equity group Blackstone is close to going public, which could raise the question of how to treat the public company for tax purposes.Some members of the US Congress have proposed legislation that would tax Blackstone at a corporate rate that is much higher than the current rate the equity group now faces.pete.kasperowicz@thomson.compik/wash/dca/wash/ssCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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Paulson: Housing slump likely near end 