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!

For Europe, this is more than just a banking crisis. Unlike in the US, it could develop into a monetary regime crisis. A systemic banking crisis is one of those few conceivable shocks with the potential to destroy Europe’s monetary union.

Good day… And a Terrific Tuesday to you! Well… Folks… The wheels, what was left of them, are really coming off this economy. It’s a sad sight to see, but it’s happening nonetheless, and there’s no bailout, stimulus check, mortgage bill, truck loads of money supply, or whatever, that’s going to stop this recession bus.. Memo to Paulson and Bernanke… Don’t throw yourself under this recession bus…

Bailout package is voted down! Biggest one day point drop for the DOW! Dollar rallies hard… Carry trades unwind… Again! And Now… Today’s Pfennig!

Bernanke and Paulson have been worn down from the one-off situations they have been dealing with, and finally came to the realization that the problem is much more pervasive than previously thought.  Ahoy thar maties… Yesterday was a very volatile day in what has become an incredibly choppy week.

Chris Gaffney takes a look at key currency movements in The Daily Reckoning. In today’s highlights: Oil weighs on the Canadian loonie… Mexican peso soars on rate hikes… Brazilian real still a speculative investment… Aussie dollar down on weak data… Japanese yen carry trade lives on…

Editor’s Note: Yen recovery?… Aussie dollar riding on China’s coat tails… Brazil has it all… British pound back on top…

 Analysts are seeing many similarities between the scenarios leading to the collapse of the Yen carry trade back in 1998 and what is occurring now. Should those investors and funds reliant on currency trading be paying closer attention?