The week of September 29th felt much like a roller coaster ride.  Last week we heard the proposed bailout plan from President Bush and Treasurer Paulson.  Both Wall Street and Main Street expected the bailout to be passed on Monday.  After going to the House, the bill failed to pass with a vote of 228 to 205.  Confidence on Wall Street was immediately diminished resulting in a 778 point drop of the Dow Jones industrial average, the largest single point drop in history.  Tuesday the market rebounded and regained some territory ending the day up 485 points.

The bill was sent back to the drawing board and was presented to the U.S. Senate on Wednesday.  The modified bailout plan was approved by the Senate with a vote of 74-25.  After passing through the Senate it was sent back to the House for review on Thursday and was eventually passed on Friday with a vote of 263-171.  It was interesting, to say the least, to watch the political pressure between the Senate and the House.  President Bush went on the sign the legislation and movement within the banking system is underway.

Next week will be an important week in the market.  Confidence will continue to be volitile for some time, but now a sense of direction can be used to gague the near future.

For more details about the bailout plan please visit Forbes’ article, “The Bailout Plan: An Owner’s Manual”.

Today the Federal government announced a rescue plan after a historic week in our financial markets.  Earlier in the week Lehman Brothers declared bankruptcy, Merrill Lynch was sold, and AIG was bailed out by the government.  Central banks from around the world poured hundreds of billions of dollars into the banking system in hopes to calm the storm.  Despite the surge of news and volatility in the financial markets this week, mortgage rates had little change.

The rescue plan announced today by the Treasury spoke of a broad plan.  A legislative proposal for lawmakers will be drafted by the Treasury this weekend.  The plan will likely include help from the Treasury to banks who have illiquid mortgage assets.  Buying the mortgage assets at a discount provides relief for the banks and will allow the government to provide help while forecasting a positive return.

Treasury Secretary Henry Paulson said, “I am convinced that this bold approach will cost American families far less than the alternative – a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion.”

For more information about the Treasury’s announcement visit www.bloomberg.com.