The monster economic decline is not real.
Todays retail sales report in the Wall Street Journal (subscribers only) show a November decline of 2.5% and a December decline of 4%. Considering that this data comes from credit card sales and is a dollar volume, this is a minor blip in the economy. Minor blip.
The prices in retail stores have been cut by so much (by fear of recession talk) that a growth of sales in number of transactions would show as a decline in revenue. Nearly all the decline has been in the luxury categories, such as Neiman Marcus, jewelry and electronics. This is part Bernie Madoff, part portfolio horror and partly the complete absence of interesting new gadgets.
Luxury goods should be off with a financial decline of 45% in the stock market from its peak. I guess all the home construction workers out of work, auto workers worried about their jobs and former Lehman Brothers employees are still taking care of themselves. Or the rest of us are making up for them. Or the scare is not real.