The “Bailout Plan” was passed. Will it work? The answer depends on what your definition of “work” is. If by work you mean no more government intervention and no further costly programs and a functioning market, then the answer is no. But there are things it will do.

The economic calendar this week isn’t particularly exciting, but coming off the pain inflicted on the markets last week, that could be a good thing. The market will have its hands full with earnings season starting up again, so a full week of reports could have been dangerous.

In the currency market, the dollar notched big gains against the euro. Late Tuesday, the euro was trading at $1.4162 vs. $1.4305 on Monday. The buck was already upward bound before the results of yesterday’s FOMC meeting.

All eyes are on the drama being played out on Wall Street today. But the cause of all the bloodshed was the downturn in the US housing market. This left banks and financial institutions with exposure to toxic subprime loans with a load of worthless securities on their books. This led to writedowns and losses. And the rest is history. Shockingly, given the scale of the crisis, John Maudlin says the housing crisis has a ways to run yet. Alt-A mortgages may the next to fall…

The government’s bailout of mortgage giants Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) has Wall Street on a roll. After yesterday’s rally, US stock futures are pointing up again today.

For legendary investor Jim Rogers, however, the government’s intervention is “socialism for the rich.”

One big issue is the Treasury Department’s agreement to make secured loans to the companies if needed and even buy some mortgage-backed securities itself.

In the currency market, the dollar wound up higher against the euro. Late Wednesday, the euro was trading at $1.4745 vs. $1.4785 on Tuesday.  Traders’ focus returned yesterday to concerns about the economic health of the eurozone.

The U.S. financial crisis has cut so deep – and the government has taken on so much debt in misguided attempts to bail out companies such as Fannie Mae (FNM) and Freddie Mac (FRE) – that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.

In the currency market, the dollar rallied against the euro. Late Wednesday, the euro was trading at $1.5823 vs. $1.5899 on Tuesday.

Traders were scrutinizing the release of the minutes from the last Fed meeting, searching for the future direction of interest rates, and apparently decided from the mixed signals that the Fed is about to turn hawkish on inflation.

As Dow Jones Marketwatch reported: “Some members said the Fed had aggressively cut rates to 2% to guard against downside risks to growth and now that these risks had ‘diminished’ that ‘some firming in policy would be appropriate very soon.’

“But other FOMC members said financial conditions were still too fragile and borrowing costs were higher for consumers than before the Fed starting cutting…

In the currency market, the dollar rallied from $1.6036, a new alltime low against the euro, clawing its way just back into positive territory. Late Tuesday, the euro was trading at $1.5899 vs. $1.5904 on Monday. Traders were carefully watching Fed Chair Ben Bernanke’s testimony to Congress on the state of the economy.

Back in the middle 1980s, income investing for U.S. investors was pretty simple. Inflation was around 5% – roughly the same as now – but U.S. government bonds were paying close to 8%, and without going into high-risk debt issues you could find 9% with very little difficulty.