Do we need a better augury of a renewed global economy than this? TMZ is reporting that our favorite spendthrift Roman Abramovich is at it again. He spent around $52,000 on lunch in New York City at Italian food restaurant Nello's. Abramovich and his party of nine others dined on truffle carpaccio, rigatoni Siciliana, truffle taglioni, filet mignon and more but what really boosted the tab was the wine. The bill which TMZ has obtained shows bottles of Cristal Rosé, Chateau Petrus and Domaine Romanee-Conti La Tache as well as some Johnnie Walker Blue. Apparently, Abramovich and his crew aren't sweets lovers, there's just one lone tiramisu on the list.

TMZ reports that the check had an automatic gratuity of 20 percent, over $7,000 but Roman and crew threw in another $5,000, bringing the tip to 26 percent. Classy move, oligarchs.

That millionaire next door might not be a millionaire anymore. A recent report from the Boston Consulting Group shows that the number of millionaire households around the world fell from around 11 million in 2007 to 9 million last year, around 18 percent. In North America the number was even higher, a 22 percent drop. Global wealth overall has also declined dramatically.

The world's richest people are responsible for doing a greater share of the resource consuming and economy driving. While many say that the economy is beginning to recover there is the possibility that as 24/7 Wall Street put it, that we are looking at not just a jobless recovery but a "wealthless" one as well. While it can be hard to be sympathetic for the rich who are losing their ability to buy yachts or stay in five-star hotels, those indulgences are major economic drivers. The lack of disposable wealth also ends up affecting not just providers of luxury goods and services but also various philanthropic organizations.

This year more than ever, graduates want cold hard cash. A report from the National Retail Foundation found that people giving gifts to those graduating this spring will be reaching for their wallets instead of heading to the stores. The 2009 Graduation Consumer Intentions and Actions survey shows that 58.9 percent of giftgivers will give cash, up from 56.8 percent last year. The gift card frenzy seems to be abating a bit too, down to 29 percent from 32.2 percent last year.

Grads are getting less too. The survey shows that Americans will spend a total of $88.01 on graduation gifts this year compared to last year's number of close to $100. The reason is pretty obvious, the economy. Many students will pool gifts for larger purchases or savings to bulwark them against a rough job market. The traditional watch or briefcase is losing out to practicality and a gift that while appreciated, might be more easily forgotten.

Following the luxury surveys lately is getting increasingly confusing, a response perhaps to the uncertainty in the marketplace. The overall consensus seems to be that hopes for better days are alive, they just remain off in the distance a bit. The most recent survey of affluent consumers from Unity Marketing shows results similar to the ones we saw recently in the Bain's "Luxury Goods Worldwide Market" study which is that recovery is coming, it's just not coming too quickly.

Unity Marketing's Luxury Consumption Index reports a modest uptick of 1.5 points in their latest survey of affluents (average income of $207,000). While luxury consumers are still cutting back on spending they do feel more optimistic about the future of both their personal finances and the country's economic recovery. Many of the 1,034 people surveyed said they see a recovery coming within the next twelve months.

What will happen to the luxury goods industry remains to be seen No one knows if the current climate of austerity is permanent. Tom Bodenberg, Unity Marketing's chief economist thinks that luxury consumer spending could rise as a response to the recent enforced wallet tightening. But he also says that the media's focus on "recession chic" could continue to have an effect on the perception of conspicuous consumption. The best possible scenario for luxury goods businesses is that 2009 is a reverse of 2008 which had a strong first few months and then a sudden and deep decline.

The slide in the luxury goods market is set to continue for a bit longer. That's the data to be gleaned from the semi-annual update to Bain's "Luxury Goods Worldwide Market" study. The study shows that the luxury goods market will experience a 15-20 percent decline during the first two quarters of 2009 down from 170 billion euros in 2008 to about 153 billion euros this year.

But the study does see the proverbial light at the end of the tunnel. It predicts that the luxury market will start to even out in the second half of the year ending up with a net decline of 10 percent for 2009 overall. Like other studies, this one looks to China and the Middle East for signs of hope, seeing a projected growth of seven percent in China and two percent in the Middle East.

Overall all luxury shoppers are feeling more tentative and spending less. Luxury, however, remains a stratified industry with several different types of spending behavior. The lower tier of luxury consumers switching to less expensive brands and the more affluent luxury shoppers switching their focus to the intrinsic quality of materials.

It's looking like New York will follow fast on the heels of Illinois in deciding not to add a luxury tax for jewelry over $20,000. The American Watch Association sent an e-mail to members on Monday saying that while the New York State Legislature has agreed to tax increases to deal with a budget deficit, the luxury tax proposal is not part of it. The luxury tax would have also applied to aircraft costing more than $500,000, yachts over $200,000, cars that cost more than $60,000 and furs over $20,000.

But don't go spending yet, high earners in New York will be feeling an increased pinch. Income taxes were raised one percentage point to 7.85 percent for couples with income over $300,000 and couples with more than $500,000 in income will pay 8.97 percent. The three-year tax increase is expected to add $4 billion to the state coffers this year.

I've written about the troubles befalling American malls but it's tough in Russia too. The AP reports that the economic crisis and low oil prices are starting to make Moscow's popular GUM shopping center on Red Square look a bit like a ghost town. Some boutiques are closing while others are doing the same thing that their U.S counterparts are doing, offering deep discounts to lure anyone who might still be shopping. Russia has been a tremendous growth area for many international brands over the past few years as Russians became accustomed to increased spending power. Now it seems that they've followed the rest of the world into shopping retreat.

Back in October I mentioned that the managing director of Mercury, the country's biggest luxury goods group has said that sales have fallen at the popular TsUM shopping center. Mercury's stores sell many of the world's top luxury brands, everything from Gucci to Maserati cars and Chopard jewelry through the TsUM department store and other luxury shops.

Also it was recently announced that this year's Moscow World Fine Art Fair, set to take place at the end of May, has been canceled. The cancellation was mainly due to troubles getting sufficient sponsorship to cover the costs of the fair. ArtInfo reports that only a few dealers had pulled out of the fair but cancellations from Bulgari and Harry Winston prompted the organizers to cancel now rather than months from now when the economic crisis could be even worse. They hope to bring the fair back next year.

Two articles came out today that seem to indicate that while low and middle-tier luxury are floundering the there is still money to be made in the top tier. The Wall Street Journal and Wealth Bulletin both look at numbers from consulting firm Bain & Company which predicts general demand for luxury goods this year to fall by three to seven percent but sees hope in the high end. Bain also says that brands which inhabit the upper strata of luxury, which they call absolute luxury (Harry Winston, Loro Piana, Brioni and many others) will either hold steady or have modest growth. This is because the very wealthy may not buy as much as they did last year but they aren't going to be downsizing the way other segments of the market might.

Bain defines two other tiers of he luxury market with 'a' words-- aspirational, which includes brands like Gucci and Louis Vuitton which attract upper middle class consumers and accessible which includes brands like Coach and Ralph Lauren which have a lower price point and appeal to a broader range of people. These two segments have had explosive growth in the past couple years and are already suffering in the economic downturn. But the high-end of luxury remains strong because people still want good things, they are just buying less of them. They are increasingly choosy about getting the best, preferring bespoke pieces and commissions to branded luxury goods. These findings seem to echo the words of Cartier CEO Bernard Fornas who told Reuters at the SIHH watchfair last week that " the real, true luxury is back."

It looks like all those door-busting sales didn't do much good this holiday season and it could mean that some malls may be permanently out of business. The slowest retail holiday season in 38 years could end up dooming 2,000 to 3,000 malls by the middle of the year with an estimated 200,000 more businesses shutting down. Even those that are still around will be cutting back on store locations, shutting down stores that aren't making good sales numbers. An ABC News article quotes Howard Davidowitz, the chairman of retail consulting firm Davidowitz & Associates who says that: "The American standard of living is changing forever."

At the beginning of 2008 we mentioned the dying out of the traditional indoor shopping mall which was being replaced by outdoor shopping areas. But the recent economic fallout is affecting both the indoor and outdoor kinds of shopping malls as what is now changing isn't how people shop but whether or not they shop at all.

The numbers are in from Christmas 2008 and bleak doesn't even begin to cover it. The Wall Street Journal reports that total retail sales, excluding automobiles, fell over the year-earlier period by 5.5% in November and 8% in December through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit. If you take out gasoline sales the overall percentages work out to a 2.5% drop in November and a 4% decline in December (the drop in gas prices contributed to overall lower sales).

The luxury market was the worst hit with sales falling over 21%; add in jewelry sales and that number goes up to 34.5% The grim numbers have forced retailers to increase their savings offers moving up the typical January clearance sales to huge post-Chrstmas sales this weekend. It doesn't seem to have worked too well from what I saw out there today though. Part of the reason may be that this holiday season shoppers spent less on gift cards as presents so there is less of an immediate incentive for people to rush back into the stores.

I'd usually save a piece like this for the Sunday Real Estate Round-Up but I'm a bit fascinated by New York real estate greed this week. The New York Observer's Manhattan Transfers column reports that Kurt A. Locher, formerly a Lehman Brothers managing director and the head of its mortgage banking, isn't trading down in these tough times, he's trading up to a more expensive apartment. He recently bought a $5.25 million apartment at 500 West End Avenue. The five-bedroom apartment includes a formal dining room, a maid's room, a living room, a library, and a windowed, eat-in chef's kitchen. It makes Mr. Locher's old place on Park Avenue and listed with Prudential Douglas Elliman, is on the market for $2.495 million look small by comparison.

What a difference a few months make, earlier this year, I attended the Luxury Summit and heard research from American Express Publishing and Harrison Group. Now they've done a follow-up and the news is far grimmer. Their new research finds that 71 percent of America's affluent and wealthy consumers (10 percent of American families) say that real estate and banking crisis has affected their sense of financial security and the value of their assets. Now nearly 6 in 10 survey respondents are now worried about running out of money, including 48 percent of America's wealthiest families (a number up from 35 percent in April).

In a survey conducted on September 19-23, 614 affluent individuals discussed how the recent economic turmoil is affecting their financial and spending plans and revealed that 75 percent of the respondents believe the country is now in a recession. And how's this for a depressing fact, just fifty-five percent of the wealthy respondents are optimistic about their own future, down from 93 percent in 2005. Just one-quarter of respondents are now upbeat about the future of America while 60 percent were in 2005. This is big news for everyone because as Jim Taylor, vice chairman of Harrison Group points out, the top 10 percent represents over 50 percent of all retail spending. They are the ones who have kept the consumer economy afloat even as the middle class slowed spending dramatically.

One bright note is that 20 percent of American families are reducing gift giving so that they can donate to charity this holiday season. People are shopping with more thought and an eye toward saving. Many now wait for sales and are buying less. It's not great news for the retailers but it does seem a smart tactic in this economy.

We are still a few months away from the holiday season but retailers are already wringing their hands. With the stock market slumping, higher food and gas prices and the unsteady real estate situation, predictions for a slim Christmas season abound. Deloitte LLP is saying that retailer should expect a holiday sales increase of 2.5 to 3% over 2007 during the November to January period, which is less than last year's 3.4 percent which was also relatively low overall. Retailers will likely be rolling out all sorts of temptations from pop-up stores and special deals to the continued promotion of all things "green."

So far, the high-end luxury market has been a bright spot for retailers during this extended economic crunch but recent stock market uncertainty may give even the biggest spenders a case of the Scrooges.

On this blog we do a lot of talking about the rise of China's big spenders but one of the flashiest symbols of this new luxury in China is getting a bit of a paring down. When the Millionaire Fair first came to Shanghai in 2006 it showed off multi-million dollar villas, private islands, yachts, a 30-carat diamond, rare wines and a gold bathtub.

Now the event, branded simply as The Fair, will run October 10-12 and include a "roundtable on China's well-being and charity." It will still be a gathering of wealthy Chinese but it will focus on more than just extravagant spending but will also talk about issues affecting the new wealthy such as philanthropy, collecting, investing and inheritance issues.

Economic slump or not, according to The New York Times the ultra-rich aren't slowing down on spending. This news follows right along with the current trend of contradicting reports we keep hearing, like the fact that luxury retailers are reporting steadily falling sales while private jet spending is holding steady or even going up but luxury car sales are down. So what is it, are the rich spending or aren't they? Or is it just that the ultra rich are still spending, but all those who are just "middle-of-the-road" rich are cutting back?