You know it's an unusual week when a Cabinet secretary goes down on one knee before the Speaker of the House to plead for legislation. Of course some might not consider that unusual given what was at stake. No, according to officials including the head of the Federal Reserve and the president of the United States, the future of capitalism as we know it was in the balance and passage of the bill was crucial.

Newspaper and other reports described extraordinary behind-the-scenes events, including the moment when Treasury Secretary Hank Paulson begged Speaker Nancy Pelosi not to let the bill fail. Other choice moments included a meeting at the White House -- at which both Sen. John McCain and Sen. Barack Obama were present -- that descended into a partisan shouting match. There is no evidence that McCain or Obama did any of the shouting.

For a while there, it all seemed like it was spinning out of control. But then, at some point on Friday, the succession of press conferences, finger pointing and hand wringing started to look like business as usual and lawmakers started to sound a lot like they always do. At that point, the markets rebounded and, led by some financials stocks, ended the day mostly higher.

Of course not all financials rose. Wachovia Corp. (WB) and National City Corp. (NCC) dropped like stones on concern the big mortgage lenders would be dragged under by bad assets. Late Friday, a report surfaced that Citigroup might step up and take over Wachovia in a transaction similar to J.P. Morgan's deal for Washington Mutual.

U.S. stocks ended the day mostly higher, with technology shares dragging while other sectors rose. The Dow Jones Industrial Average (.DJIA) rose 121.07 points, or 1.1%, to close at 11,143.13 on Friday. For the week, the index lost 2.2%. The broader Standard & Poor's 500 Index (.SPX) gained 4.09 points, or 0.3%, on Friday to close at 1,213.27, but slumped to a 3.3% loss for the week. The Nasdaq Composite (.COMP) fell 3.23 points, or 0.2%, on the day to close at 2,183.34. For the week, the Nasdaq fell 4%.

MarketWatch will have complete coverage of bailout-package negotiations over the weekend, so stay tuned. Our weekend features include a look at how the ban on selling stocks short has affected hedge funds and an examination of the impact of car sharing on traditional rental companies.

-- Christopher Noble, assistant managing editor

Epic failure

In the largest bank failure in U.S. history, Washington Mutual Inc. (WM) succumbed to the fallout from the subprime mortgage crisis, was seized by federal regulators and rapidly acquired by J.P. Morgan Chase (JPM) for $1.9 billion. The federal Office of Thrift Supervision said it closed WaMu on Thursday and appointed the Federal Deposit Insurance Corp. as receiver. The FDIC in turn conducted the bidding process that led to the purchase by Chase. Read the report.

Brokering a bailout

President Bush vowed Friday that his administration and lawmakers will complete a rescue plan for the nation's battered financial markets despite simmering differences between congressional Republicans and Democrats over the $700 billion package. His statement comes as efforts to approve the rescue for credit markets appeared to be collapsing Friday morning in the wake of the largest bank failure in U.S. history. Get more on the story.

Political positioning

Presidential candidates John McCain and Barack Obama rushed to show leadership on the proposed $700 billion rescue plan for the battered financial markets, but clashed over the need to postpone the first scheduled presidential debate to deal with the crisis. McCain ultimately decided to go to the University of Mississippi for the debate, which Obama had planned to attend all along, arguing that voters should hear their responses to the crisis. Read the full report.

Five benefits of the bailout

A few years ago, David Weidner considered the idea of a vacation home. Despite his daydreaming, he didn't buy one, largely because he really couldn't afford it. Even though the bank would have signed off on financing the deal, he knew what his limits were; just because he could spend money doesn't mean that he should. Unfortunately, our society and culture have different ideas. But before unleashing your vitriol on Wall Street, consider five ways the bailout can benefit us. Read his full column.

The decline of Wall Street

Peer Steinbrueck, Germany's finance minister, predicted this week that the U.S. would soon lose its role as the world's dominant financial power. He criticized the U.S. for failing to adequately regulate investment banks and partly blamed free-market policies that emphasize a short-term "insane drive for higher and higher profits" for the crisis. Find out what else he said.

Change of scenery

In becoming bank-holding companies, Goldman Sachs (GS) and Morgan Stanley (MS) aren't just leaving one club to join a stodgier one. They're committing themselves to a straitlaced program that likely will force them to curtail a wide range of business dealings that have generated massive profits in the past, analysts say. Fading in importance are the vast use of leverage, or borrowed money, to boost returns, and the provision of large amounts of leverage to hedge-fund clients. Learn more about the sweeping changes.

Buffett's bet on Goldman

Berkshire Hathaway (BRKA) (BRKB) agreed late Tuesday to invest at least $5 billion in Goldman Sachs Group. Berkshire, the insurance-focused conglomerate run by billionaire investor Warren Buffett, will buy $5 billion of perpetual preferred stock issued by the investment bank, and it also gets warrants to purchase $5 billion of Goldman common stock with a strike price of $115 a share. It marks Buffett's first foray into an investment bank since 1991, when he became the largest shareholder of Salomon Brothers. Get more on the story.

Dimmer view for GE

General Electric Co. (GE) warned 2008 earnings may be as much as 15% lower than it earlier predicted and said it would halt a stock-buyback program to maintain the AAA credit rating that's so important to its financials business. The Fairfield, Conn.-based conglomerate said "unprecedented weakness and volatility in the financial-services market" led management to cut earnings estimates. Read the full story.

Costs of health care

Continuing a recent slowing trend, employers' health-insurance premiums grew a relatively modest 5% in 2008, but employers and workers still are struggling to absorb a more than doubling of their coverage costs since the late 1990s, according to a widely tracked survey. Since the early 2000s, employers have been passing on more of the increased costs in the form of higher worker premiums, deductibles, co-payments and coinsurance, but workers' rising health costs have far outstripped wage gains and general inflation. Learn more about the trends.

Google phone debuts

T-Mobile USA unveiled the first Google-powered (GOOG) handset, a stylish device that mimics many features of Apple's (AAPL) iPhone and adds a few new wrinkles. The G1 smart phone, produced by Taiwanese manufacturer HTC, features a touch screen and a foldout keyboard. It also incorporates WiFi connectivity, works internationally and offers some innovative features. Plus, it costs $20 less than the iPhone. Read more about it.

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