Right now the Dow is up nearly 500 points and the talking heads on CNBC are saying we’ve hit the bottom and are climbing back up. It’s good that Wall Street seems to believe the bailout worked, but did we fix out real problems?

The glut of consumer spending that fueled our economy was not based on a rise in income. In fact real income of most Americans has actually decreased. At the same time we are spending more on basic needs like heath care, fuel and food.

So where did the money come from? Credit cards and people treating their homes like credit cards. And that is our core problem.

We are a leveraged as we can possibly be. No matter how much liquidity is injected into the system by the bailout, money will not flow as freely as it has over the past 7 years. (And that’s a good thing in the long-term.)

There is joy on Wall Street today, but a week or two from now when new unemployment numbers come out, they will be sharply up. Then we are into the holiday season, and I’ll bet my lump of coal from Santa that spending is WAY down.

The CNBC talking heads can pretend all they want our worries are behind us, but the truth is, the worst is yet to come.