NEW YORK (AP) _ The stock market is the keeper of consumer confidence in this economy. It is the barometer that tells people whether it's safe to go out and spend or whether they should save pennies instead.

For a long time now it's been telling people they could afford to spend. Why not spend when rising stocks were lifting household assets with them? And when 10,000 on the Dow Jones industrial average seemed within sight?

It's known as the wealth effect: If people feel wealthy they also feel confident about enjoying some of the luxuries of the wealthy. They spend, confident that they can always save at a later date.

And how they've been spending. And how little they've been saving. The personal savings rate in the second quarter fell to a record low of 0.6 percent of disposable income, meaning paychecks were almost totally spent.

The apparent rationale for this _ if reason at all was involved _ is that stocks and other investments were taking care of the future. If your mutual funds were rising, then you were getting richer all the time.

There was some truth to the notion: America's household assets in the second quarter were at a record high level relative disposable income. There was a warning sign too: Liabilities also were at a record high.

All this is past, the second quarter of the year already having slipped back into history. But, as investors know, investing is about the future, and the future has recently become very uncertain.

The issue involves more than just household budgets. The consumer is now the defender of the American economy, since Asian economies aren't importing like they used to.

While prospectors for gold in stocks were inclined to believe a few weeks ago that the Asian problem was diminishing, it is obvious now that it is spreading. And that's bad news for the United States.

A further decline in U.S. exports, along with a flood of low-priced imports, would worsen the U.S. trade imbalance. A worsening trade deficit could further shrink the stock market. And shrink household assets too.

It's only a scenario, but it is a realistic one. Demoralized consumers might cut their purchases of automobiles, for example. That could mean lost profits and jobs. The Asian economic flu would become an epidemic.

Parts of this scenario are described by David Wyss of Standard & Poor's DRI, which isn't given to hyperbole. ``The deteriorating Asian economies make a near-term U.S. recession more likely,'' he says.

Adjusting to such an economy, one that just a short while ago was filled with ``new-era'' philosophizing and stratospheric Dow Jones projections, is likely to be shocking and profound.

It could be more like a deep rumble than a passing quiver, even an economic earthquake attended by one of those profound changes in outlook that occur every couple of decades. And it could make people save again.

``We question how much longer consumers can continue to spend so profligately,'' says Wyss. He points out that total household liabilities now equal 98 percent of disposable income.

With the savings rate at less than 1 percent, he asks ``can households really save less than this?''