Today’s item is even more depressing than the dour forecast of newspaper advertising sales that I mentioned in Friday’s blog (look for the Outsell research comments).

Now Editor & Publisher reports that stock analyst Alexia Quadrani, who tracks newspapers for Bear Stearns, says:

“year-to-date through August, newspaper ad revenue is down 7 percent. Third quarter to date ad revenue declined 7.8 percent. Classified advertising fell 14.8 percent in the first half of 2007.”

Quadrani said she expects the advertising fall off to be even steeper in Florida and California, where the real estate bust is souring consumer confidence. Although the Editor & Publisher article does not specifically mention the “wealth effect,” an economic concept that suggests people spend more or less when they feel richer or poorer, such as occurs when home prices soar or plunge.

With real estate now in the down cycle Quadrani posits that “consumers will probably spend less . . . It’s expected that retail sales will drop in Q3 and as a result retailers will cut back dramatically on advertising.”

The story also quotes the Bear Stearns analyst as saying that “Florida . . .  will feel these effects more acutely” while adding that “California will likely see results weaken as the real estate downturn impacts other advertising categoriers.”

So it looks like coal in the stocking for Christmas, boys and girls, as newspapers, including those in my beloved Northern California, can’t catch a break.