Yesterday, Ben Bernanke told the House Budget Committee: 

Hmmm. I would swear that Treasury Secretary Geithner just told China that rising interest rates were a sign of optimism for the U.S. economy. Can rising rates be both good and bad? All I know is that if you listen to government long enough, anything and everything is possible.

Bernanke has said it’s time to consider using the second arrow in the Fed’s quiver. That’s the "provision of liquidity" arrow. Maybe the Fed will buy Treasuries. Or maybe the Fed will start doing direct loans to businesses and even consumers. What could go wrong?

When there’s a lot of uncertainty in the financial markets, traders don’t like to hold positions over the weekend. Too much can happen that might lead to losses. So when traders are willing to hold over the weekend and even take positions on a Friday, it’s cause for some optimism.