It doesn’t look as though it will be a Fantastico Friday in stocks. Yesterday was a bloodletting, overnight the Japanese stock market sold off 11%, and Europe is down about 9% at this point. UGH! But according to Chuck Butler, “When things look bleak, the dollar goes up… And when it looks as though all the stimulus might work, the dollar sells off…”

Yen trades to 98! Carry Trades unwinding hurt high yielders… Gold rallies back to $900! Central Bank rate cuts…. And Now… Today’s Pfennig!

The House, which had previously voted down the Bailout Package, decided to go ahead and put the country in debt by another $700 Billion… Yes, I know it the payouts will be in installments, but in my mind it was in one swoop that $700 Billion was added to our debt… And guess what? The dollar rallied on the news!

The Bush administration’s failed $700 billion bailout of the financial markets “constitutes the single greatest case of ignoring the free market in modern history,” according to Chuck Butler. Here’s what Chuck says should be happening in a free market. It starts with “an effective cleansing period” and is followed by “a healthy recovery period.”

– The US government has stepped in to fix the financial markets yet again with what the Washington Post describes as a “massive intervention” package. The administration plan, which received bipartisan support, “involves using hundreds of billions of dollars in government funding to buy bad loans, leaving banks with more money and fewer problems,” according to the paper.

– The bad debt plan may cost taxpayers up to $1 trillion, says CNBC.

– The Securities Exchange Commission further boosted confidence with a temporary ban on short sales of 799 financial institutions.