It was a similar story in other economies, and yet on Friday there was a steadying, and then a small rebound, even though the news from the US was miserable with a horror employment report, and the promise of more to come in the next few months.
After analysing Friday's jobs report, it's now clear the US economy and labour market have been worsening at a pace that hasn't been reflected accurately in the official figures. Jobless numbers are far worse than previously reported with hundreds of thousands of more people out of work than thought.
Around 1.2 million people have lost jobs in the US so far in 2008: that was almost half a million more than the figure at the end of September and came because of a big jump in October's figure and huge revisions in previous months.
All in all the news Friday wasn't the sort of information to help the market higher.
And yet that's what happened with the Dow up 248 points, or 2.85% at the end; the Standard & Poor's 500 Index up 26.11 points, or 2.89%, and Nasdaq up 38.70 points, or 2.41%.
The Dow's lost 4.1% over the week, the S&P lost 3.9% and Nasdaq finished the week off 4.3%. It was a surge/slump, slump/surge kind of week.
Australian market should be up around half a per cent, a modest recovery after Friday's fall of around 100 points, or more than 2%.
The fall Wednesday and Thursday had the hallmark of a classic bear sell off.
Over the two days, the Dow lost 929 points, its biggest two-day point decline ever. The percentage decline was 9.7% and the Dow's worst two-day percentage drop since October 1987.
The decline followed an 18% surge on the S&P 500 in the seven trading sessions ending Tuesday on the day of the election.
Prior to that bounce, the S&P 500 had slumped 35% in the six weeks since Lehman Brothers declared bankruptcy on September 15.
The Wall Street Journal reported Friday that part of the massive two-day selloff was as a result of selling on the part of the Citadel Investment Group. The paper said the $US16 billion hedge fund had reportedly been asked by several banks to post additional collateral to cover big losses.
Pending home sales fell 4.6% in September, after rising 7.5% in August and wholesale inventories fell 0.1% in September after rising 0.6% in the previous month. Economists forecast a 0.3% rise.
And borrowing by consumers increased in September by more than had been expected.
Signs of the recession were evident in economic news released earlier in the week, including poor readings on manufacturing, factory orders and the services sector. This week it will be poor news on retail sales that will grab the attention of investors.
In a Friday speech, Atlanta Federal Reserve Bank President Dennis Lockhart said that "recent data indicate that the national economy is in recession". He's the second major Fed official in the past fortnight to use the 'R' word; the other was Janet Yellen, head of the San Francisco Fed.
Asian markets were mixed, with Hong Kong's Hang Seng ending higher and the Japanese Nikkei ending lower. European markets ended higher. Europe's Stoxx 600 Index added 1.9%, trimming this week's drop to 1.1%. London's FTSE 100 gained 2.2%; Germany's DAX 2.6% and France's CAC 40 rose 2.4%.
The MSCI Asia Pacific Index added 1.5% last week, the first time the gauge has risen for consecutive weeks since May. Japan's Nikkei rose 0.1% over the week and Thailand's SET Index jumped 11%.
The MSCI Asian index has lost 45% more than the benchmarks for the US and Europe with much of the selling in emerging and newly industrialising markets.
The US dollar fell against the euro and gained versus the yen. The Aussie dollar finished at 67.21 USc, down a touch over the week.
Comex December gold rose $US2 to $US734.20 an ounce; December Nymex crude oil rose 27c to $US61.04 a barrel, after ending Thursday's session at a 19-month low.
In Australia the market closed more than 2% lower for its second consecutive day of losses, but as we said, will be up a touch today. The market still finished the week with a small gain, like much of Asia.
The ASX200 index fell 2.37% to 4051. The All Ordinaries lost 99.9 points, or 2.43%, to 4006.6.
Energy company Woodside fell 6.73% to $39.80, Santos 46c to $13.81 and Oil Search dropped 5% to $4.60.
NAB slumped after paying its final on Friday. The bank also said it had appointed receivers and managers to Rubicon (an associate of Allco Finance Group) on a request from the directors of the company. NAB shares fell 10.32% to $22.15.
The Commonwealth Bank gained 27c to $40.07 after saying it lent the collapsed ABC Learning $240 million.
ANZ was down 3.89% to $16.29, while Westpac was steady at $21.00.
Rio Tinto fell 8.57% to $72.27 and BHP Billiton 4.35% to $27.93, well below there they were a year ago when BHP launched its bid.
