Stock markets put on a happy cheer today for higher than predicted August US Retail Sales data: 2.7% M/M ahead of the market consensus for a more modest 1.9%. But stripping out the massive one-time-juice from cash for clunkers and higher oil prices, core retail sales actually rose by a more modest 0.6% M/M. Running with this 'good news' many pundits are heralding the much desired return of the US consumer. If we look at the real product of cash for clunkers though, we have to admit a less-lasting benefit than we would like.

I am all for greener cars, and there was doubtless some gains made in fuel efficiency by handing in older cars for new. But after this marginal benefit, the net effect is likely to be more negative. For one thing cars that were older and therefore largely paid for have now been replaced with cars that are new and mostly financed. Cars aren't exactly appreciating assets. The government program has really prompted consumers to spend more and save less again; precisely the disastrous approach that got us into the mess in the first place. Secondly, we have once again borrowed growth from the future- car sales- and spent it today. Once people have a car payment, it is harder for them to buy other things in the future. This is the case, even if they are able to keep their jobs, and their houses--which for many, still remains to be seen. Buying new cars in response to a government incentive looks good this quarter, but likely increases the risks ahead.

I am happy to see some signs of life in the economy, but one month's data born of government stimulus doesn't declare a recovering consumer.

This Reuters clip reminds us that at this point, in one of the harshest economic periods in history, the story of most consumers in the world today is not so much about recovery as it is about survival. Watch: Time of Crisis.    more »

I must admit: some days life on earth can seem a little dark. Sometimes it can seem like we humans are rather hopeless creatures. Too big to fail? More often it can seem like our more serious issues are just too big to fix. Never mind the financial system for a moment, what about water management, food and the sustainability of our eco-system? Wasn't it David Suzuki who said we are all speeding head-long into a brick wall driving a Mini and arguing about who gets to sit in the front seat?

A few years ago I saw an Astrophysicist being interviewed about the evolution of our planet and the fate of humans. He acknowledged that we were very likely destined for extinction eventually but "that was ok". He was calm about it; I will never forget the peace he seemed to possess.

This excellent video clip about the Big Bang gave me a similar sense of peace about our world. Not that it is hopeless. Not that we should give up or give in, or not keep trying to make things better. But in the end, we are not ultimately in control of our destiny. Whether we believe it was “God” or random, there was definitely a larger energy force that created our universe. We are perhaps only one phase in an enormous boom and bust life cycle that will carry on throughout infinity. Food for thought…

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