Collapse in retail sales as a function of residential real estate price shows economy is headed for a depression and stock markets can collapse more than 80%
Karen Zuba
May 11, 2007

The retail sales since 1980 can be expressed as a complex integral function of residential real estate price increase (or decrease), the ease of getting home equity loans, rate of rise or fall of new jobs in the economy, and rate of rise or fall in population including immigration.

That analytic gave a severe warning signal nine months back when we pointed to you that deflation and stagnating economy threaten our standard of living.

The same analytic gave the second alarm early this week. It seems the situation is grim. The malls are empty. The parking lots in the malls are vacant other than those of the employees in the department stores.

The model is providing indications that the economy can collapse all on a sudden forcing Fed to lower rates abruptly. According to some economic think tanks, the Fed will lower rates to zero percent like that of bank of Japan by 2012 or earlier as economy shrinks by 20% in the next five years.

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