Today the US Federal Reserve stepped in with yet another emergency effort to ease a building liquidity crisis in world markets by cutting the discount rate "temporarily" from 6.25% to 5.75%. The markets cheered on the open roaring up with great relief. As the day rolled on the intial exuberance moderated a bit, as averages dropped back from opening heights. And volume on today's rally has been low.

Today several commentators (the same ones who weeks ago said sub-prime was a contained, non-issue) are quick to pronounce that the serious economic consequences caused by the "non-issue" are now behind us thanks to the Fed stepping in.

Facts must be faced. The truth is that there is no extreme-makeover solution to the present problems of over-levered consumers and markets. An emergency cut may help with emergency relief but it is really the equivalent of dropping a bed roll and food rations from the rescue helicopters. It may help the most critical casualties to buy some time, but it does not restore a nation to healthful habits and a robust recovery. This will take a bit more work than that. As Bloodier and Bloodier points out in New York magazine this week, the current imbalances are vast and wide-spread they have come from years of abuse and consumption at all cost. The health of the US ecomony (and thereby feeder-fish like Canada) are all compromised at present. Lipo-suction-like intervention by the Feds may smooth the surface for a bit, but restoring real health will take longer. There will need to be systemic and life-style changes. Consumers will need to stop spending like million-aires just because they could borrow, and start living within their actual means. This means inevitably slower economic growth for a while. We have borrowed a lot of consumption from the future months through goods bought on credit in the past couple of years.

I am hopeful and optimistic that better habits and policies will be the positive outcome of these painful lessons learned about credit-abuse (at least for a while anyway, I acknowledge that people have short memories).

Sorry to be the party-pooper, but at some point it really is not just how things look on the surface that matters. True health requires real work and rehabilitation of the foundation underneath.