Coming Week: Can the Levee Hold?

Indeed, uncertainty still looms over credit and financial markets. Morgan Stanley's (MS Quote) fate is still undecided, while Washington Mutual (WM Quote)still is shopping itself to all bidders. By Monday, there is a chance that both or neither will be independent any longer.

"Nothing is out of the realm of possibility," Nolte says. "Last Monday, Lehman was gone and Merrill got the bum-rush into Bank Of America's arms. It's going to be very hard to tell who the winners and losers are going to be. It's hard to get your arms around whether this is enough or if this is the solution. We have no idea for six months to a year until this has a chance to work it's way through the financial system."

Investors are hoping for more clarification on the economy when Fed Chairman Ben Bernanke makes three separate appearances on Capitol Hill to discuss the U.S. financial markets, his economic outlook and the recent Treasury and federal housing and finance agency bailout of government-sponsored enterprises Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote).

Bernanke will appear before the Committee on Banking, Housing, and Urban Affairs in the U.S. Senate on Tuesday, the Joint Economic Committee on Wednesday, and the Committee on Financial Services in the House of Representatives on Thursday.

In addition to Bernanke's testimony, the backend of the week is loaded with economic data, starting Wednesday with a report on existing home sales. The consensus among economists is that sales in August fell to 4.93 million annualized units from 5 million the month prior.