The US economy may have avoided a major decline, US Federal Reserve Chairman Ben Bernanke has said.

Mr Bernanke said the risk of a substantial downturn had “diminished over the past month or so”.

Playing down recent unemployment rises, he said a series of interest rate reductions combined with tax cuts was helping the US offset its difficulties.

Read the full story: Danger of US downturn ‘has faded’

As gas prices climb ever higher, Americans are modifying their habits by driving less, combining trips, and telecommuting. One big reason for the high gas prices is the speculation going on in the markets. Let’s hope that Wall Street can calm down and realize that by pushing oil ever higher, they are hurting the economy and their own pocketbooks.

Some folks are agitating to stop Congress from bailing out people with looming foreclosures:

All we hear these days is whining from reckless home borrowers and their banks.

But did you know that renters are 32 percent of American households? And that homes in foreclosure are less than 2 percent?

So why is Congress rushing to bailout high-flying borrowers and their lenders with our tax dollars?

For more: AngryRenter.com

I’m not writing this blog to alarm people…but to be aware…yet, it’s hard not to be somewhat concerned when you read the following in the Wall Street Journal, a very mainstream and conservative publication:

I don’t want to alarm anybody, but maybe it’s time for Americans to start stockpiling food.

No, this is not a drill.

You’ve seen the TV footage of food riots in parts of the developing world. Yes, they’re a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

Read the rest of the story: Load Up the Pantry

It’s not just poorer folks who are going through foreclosure; many McMansions are also being foreclosed:

The sharp increase in housing costs — and the desire to live in brand-new, spacious houses with modern features — led many affluent buyers to take out loans they couldn’t afford.

“People had in their head, ‘I need a mud room, I need giant columns, I need a media room, and I’m going to do anything to get it,”‘ said Robert Lang, co-director of Virginia Tech’s Metropolitan Institute, a research organization that focuses on real estate and development.

Here’s a great article in Fortune explaining the mess behind the mortgage meltdown: Chaos on Wall Street

More and more people are calling for limits on excessive CEO compensation. Obama has made it an issue in his campaign, and stockholders are also starting to agitate for change. Here’s a snippet from an AP article from April 12, 2008:

Timothy Smith, a senior vice president at Boston-based Walden Asset Management, nearly pulled off a “say on pay” resolution at Goldman Sachs Group Inc.’s annual meeting Thursday. The proposal garnered 43 percent of the vote, despite strong recommendations for its rejection from Chief Executive Lloyd Blankfein and the investment bank’s board.

“To us it appears that Wall Street has a severe rash, to which its boards, made up of corporate members, respond ‘you scratch my back, and I will scratch yours,” said Smith, whose firm owns 65,000 shares of Goldman Sachs.

No kidding. It’s just a good ole boys club up there at the top, where this small elite works to keep money for themselves; to heck with how many people they lay off. Read more

The rich are indeed getting richer, while the middle class is struggling to stay afloat:

Growing numbers of middle-class Americans say they aren’t better off than they were five years ago, reflecting economic pressures amid growing debt, a study released Wednesday shows. Their short-term assessment of personal progress, according to the study, is the worst it’s been in nearly half a century.

The survey by the Pew Research Center, a Washington-based research organization, paints a mixed picture for the 53 percent of adults in the country who define themselves as “middle class,” with household incomes ranging from below $40,000 to more than $100,000.

Particularly worth noting:

Middle-class prosperity also lagged compared with richer Americans. From 1983 to 2004, the median net worth of upper-income families — defined as households with annual incomes above 150 percent of the median — grew by 123 percent, while the median net worth of middle-income families rose by just 29 percent.

http://news.yahoo.com/s/ap/20080409/ap_on_bi_ge/middle_class_poll

From reading the likes of the Housing Bubble Blog, the mainstream media dropped the ball on the looming mortgage crisis. Yet, editors at top newspapers believe they provided quality coverage. What do you think?

I’ll be the first to admit I don’t really understand all the ins and outs of Wall Street, but I did know it was very big news when the large investment banking firm Bear Stearns practically went belly up within a week…and then, with a Fed bailout pending, Bear Stearns was bought out by JPMorgan for a measly $2/share.

If none of this makes sense, you should still check out the Housing Bubble Blog for bits and pieces on this latest financial market news. More financial companies look to be in serious trouble with unheard of billion-dollar losses. Some readers are concerned that the Fed’s response in this situation is mirroring what happened prior to the Great Depression of the 1930s.