We take a longer view of it, rather than looking at the news and the headlines.  You have to be realistic but optimistic about the consumer, who is much more resilient than the pundits predict.

Based on our numbers, consumer spending hit a wall around the second half of September, specifically around September 18-20. [This was just after the AIG bailout on September 16.]  We have talked to retailers and confirmed this.  Spending has not recovered through October and early November.

That is the bad news — clearly growth has flat-lined.  But we think this will not be permanent, because of two factors.  First, the rising energy prices during the first 8-9 months of this year took a huge bite out of consumer spending.  Moreover, most of this money went overseas.  Energy prices have dropped sharply in the past two months, putting consumers in a better frame of mind to spend money.  Second, the whole credit crisis has been amplified on TV with a steady drumbeat of bad news.  So it has created a psychological barrier, and consumers are keeping their powder dry.

The personal consumption expenditure (PCE) numbers are down 0.8% sequentially on a real basis from the second to the third quarter, although nominally there has been some growth.  The nominal numbers are aided by inflation early this year, which has now subsided.

So, the seeds of positive news are there. But it will not save an otherwise sorry retail season.  It will make for a merely mediocre holiday season, instead of a total disaster.  Nonetheless, this holiday season will be the worst since 1980.