With the S&P 500 recording its worst week ever, people opened their third-quarter brokerage-account statements and capitulated to panic-selling across virtually every sector other than precious metals. For the week ending Thursday, Oct. 9, the S&P 500 crashed 18.3%, the Dow Jones Industrials slid 18.1% and the Nasdaq-100 dove 14.5%. Financial stocks did worse, with the KBW Bank Index of 24 money-center banks careening 30.4% in search of a bottom. The average financial sector fund we track lost 25.4% of its value. One impediment to finding the bottom is the lingering question of, "When will the recession begin?" As long as that guillotine is hanging over our heads, the market outlook remains bearish. Once the official economic cycle dating committee of the National Bureau of Economic Research admits our economic problem began back in January of this year, we can work through the pain and look ahead to better times. Until then we will chronicle the damage. Since July 2007, more than 131,000 jobs worldwide have been cut at financial firms reeling under $587 billion in mortgage losses and writedowns. The worst performing financial fund this week is the Rydex 2X S&P Select Sector Financial ETF ( RFL), bisected on an incredible 54.4% loss tracking 200% of the return of the Financial Select Sector Index. Of the 84 index members, returns of -74.6% in XL Capital ( XL), -53.9% in Lincoln National ( LNC), -51.4% in Keycorp ( KEY), and -51.4% in Merrill Lynch ( MER) stand out. XL Capital disclosed a lower book value on declining investments and a stock sale to bail out its acquisition of bond insurer Syncora Holdings. Investment losses at Lincoln National triggered a 49% cut in its quarterly dividend and the suspension of its share-buyback program. Estimates of a third-quarter mortgage writedown hit a high of $10 billion at Merrill Lynch as its loss-per-share estimate climbed.