As bankruptcies, scandals, and layoffs mounted, the shell-shocked markets tried to appearance ahead to brighter times nearest year

By Theo Francis

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What a week: Detroit flirted with the steep, the feds fingered a lion of Wall Street in a $50 billion Ponzi devise, intelligence giant Tribune slouched into insolvency, investors loaned Uncle Sam $30 billion—be of importance to free. And then there was Illinois Governor Rod Blagojevich, arrested on charges of tiresome to jar down Sam Zell and auction off President-elect Barack Obama’s Senate seat.

The stock emporium? It yawned, roughly breaking even amid the automaker cliff-hanger after spending most of the week solidly up. Compare that by September, October, and much of November, whenever hard news flowed to a staccato beat and the markets jigged accordingly. "There’s nothing much that’ll really take unawares you at all more," Rich Repetto, a financial-stock analyst for Sandler O’Neill, before-mentioned Friday. Investors have "seen everything and are sort of shell-shocked."

And yet, the Blagojevich complicated misunderstanding suggests there may be life in the patient stagnant: Blasé as the world seemed about the dire economic and financial news, the Illinois governor’s alleged expletive-laced efforts to cash in on Obama’s vacant Senate seat seemed to draw genuine astonishment, even in corruption-scarred Chicago.

Of course, the market’s calm in the countenance of this week’s storms may well have a more jaded undertone. Repetto, for one, sees a brief end-of-year caution at act among swelling institutional investors—many of whom have to report their holdings to jealous investors annually. Much less ill to be seen holding something sound—like Treasuries, whose yields own been driven down toward zero by greedy demand. Plus, fund managers with profits (or even just small losses) bear little appetite for big risks just before their scorecard is tallied on Dec. 31. Repetto says he knows three big hedge-fund managers heading over to Florida, the Bahamas, and elsewhere. "People hang up their cleats for the year," he says.

Certainly, as the week began, there was plenty of gloom around, even suppose that you weren’t looking particularly hard. On Dec. 5, word came that the U.S. let fall more than half a million jobs in November, the put down showing since 1974 and enough to bring the year’s job losses so far to 1.9 million. Yet, in a sign of the mysteries to come, the Dow closed up 259 points, and word filtered out that congressional leaders were impending a have commerce to shore up the faltering automakers.

Monday, Dec. 8, began with a little light relief from —The Wall Street Journal reported that he asked Bank of America (BAC) for the sake of a $5 million to $10 million bonus for having delivered it a solvent Merrill Lynch (MER). Thain ultimately accepted zero. Yet storm clouds lingered: Predictions concerning 2009 ad spending tumbled, Extended Stay Hotels was in talks with creditors, and 3M (MMM) said it would cut 1,800 jobs.