**Market Update 2-26-09**

The big focus this week continued to be on banks. Stocks had been taking a beating as speculation of bank nationalization circulated among market participants. Reassuring comments from the White House and the Federal Reserve supporting a private banking system has eased concerns. The government is taking a bit of a different approach as they start using “stress tests” prior to injecting further capital into banks in order to only prop up those companies with long term viability. Although economic reports out this week were not encouraging, we are starting to hear a bit more optimism. In his semi-annual report to Congress, Federal Reserve Chairman Bernanke stated “there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.” Treasuries and mortgages are weaker as stocks are improving today.