Weekend Reading: Wall Street’s View of the Fiscal Crisis

As the budget shutdown in Washington continued, investors on Wall Street faced criticism that calm markets were encouraging House Republicans and making a default more likely. Here’s a look at what some of the experts are saying about the fiscal crisis.

“A freak-out now would help stave off financial devastation later,” Jesse Eisinger wrote. “By staying cool, the markets are making a crisis more likely.”

Andrew Ross Sorkin wrote about “the perversity of Wall Street’s psychology: The more Wall Street is convinced that Washington will act rationally and raise the debt ceiling, most likely at the 11th hour, the less pressure there will be on lawmakers to reach an agreement. That will make it more likely a deal isn’t reached.”

Some skepticism returned to the markets on Thursday after the White House signaled that it would reject a Republican proposal for a short-term fix.

“The political situation has gone from horrible to bad, but we’re still a long way from a constructive resolution,” said Michael Purves, chief global strategist at Weeden & Company.

While the Dow Jones industrial average was up for the week, investors did move their money out of the market for Treasury bills.

“These bills are like the center of gravity for the financial universe â€" they really are,” said Lee Sachs, a former Treasury official who now runs the lending firm Alliance Partners. “Defaulting on these would be like the laws of physics being repealed.”

While nervousness is growing, DealBook’s Nathaniel Popper reported that the market reaction has been muted compared with past crises.

“We all tell ourselves, ‘This is something that is not going to happen,’ ” said David Coard, the head of fixed-income trading at the Williams Capital Group. “This would be like a black swan event â€" it’s not something that you would have thought that the U.S. could do in a million years.”

A look back on our reporting of the past week’s highs and lows in finance.

FRIDAY, OCT. 11

JPMorgan Reports a Loss as It Grapples With Legal Woes | It is the first time that the nation’s largest bank has had a quarterly loss under the leadership of Jamie Dimon. DealBook »

Wells Fargo’s Profit Is Up Even as Mortgage Market Slows | The nation’s largest home lender reported a 13 percent jump, bolstered by the improved quality of its loans and a $900 million release in its reserves. DealBook »

THURSDAY, OCT. 10

Stocks Rally, Talks Stall, Then Skepticism Returns | There are growing concerns on Wall Street that the shutdown, and the uncertainty over the debt ceiling, may exert a drag on economic growth in the final months of the year. DealBook »

Suit Revives Goldman Conflict Issue | In a lawsuit, a former Federal Reserve Bank of New York worker, Carmen M. Segarra, raises questions about the success of Goldman Sachs in policing potential conflicts. She says she was fired after she refused to alter her findings. DealBook »

2 Founders of BlackBerry Weighing a Takeover Offer | Mike Lazaridis and Douglas Fregin said they were weighing a bid for 92 percent of the company and had hired Goldman Sachs and Centerview Partners as advisers. DealBook »

Two Brazilian Brothers to Pay Nearly $5 Million in Insider Trading Case | The S.E.C. says that Rodrigo and Michel Terpins of Brazil acted on inside information about the H. J. Heinz takeover to turn $90,000 into $1.8 million. DealBook »

After High Demand, Royal Mail Shares Are Priced at High End | Shares were priced at £3.3, or $5.28. That values the company at £3.3 billion, or $5.28 billion, the biggest privatization since the government sold the railways in the 1990s. DealBook »

WEDNESDAY, OCT. 9

Government Standoff Shakes Trust in U.S. Debt | Investors are growing wary of the government’s ability to pay its debt in a timely fashion after Oct. 17, shifting the market for short-term Treasury bills and potentially having long-term effects. DealBook »

The Trade: Complacency on Wall Street Could Be Worse Than a Panic | Investors do not expect a government default, but the ideological fissures in Washington are deeper than they grasp, Jesse Eisinger writes. DealBook »

Madoff Trustee Asks Supreme Court to Let Him Sue Banks | Lawyers for Irving Picard argue that a ruling that he lacks standing to sue banks on claims that they abetted the fraud contradicts other court decisions. DealBook »

Men’s Wearhouse Rejects Takeover Bid by Jos. A. Bank | The Men’s Wearhouse board calls the unsolicited $2.3 billion offer a “highly opportunistic” one that would probably draw antitrust scrutiny. DealBook »

Tepid Opening for Promoter of Electronic Dance Music | Shares of SFX Entertainment, which owns electronic dance music festivals, started trading on Nasdaq and quickly faded, closing down 8.5 percent. DealBook »

TUESDAY, OCT. 8

SAC Is Said to Weigh Plea Deal to End Case | After months of fighting the government’s insider trading case tooth and nail, the hedge fund is leaning toward admitting criminal wrongdoing and agreeing to pay a record financial penalty to resolve the charges. DealBook »

New Corporate Tax Shelter: A Merger Abroad | More corporations are reducing their tax bill by buying a foreign company and reincorporating elsewhere. DealBook »

Deadlock Worry Jolts the Market for T-Bills | The yield on a one-month bill rose to its highest level since 2008, a sign that some are worrying more about the festering gridlock in Washington. DealBook »

Deal Professor: In Twitter’s I.P.O. Filing, Signs That a Start-Up Has Matured | Twitter’s initial public offering appears to be the first one from a big technology company that simply prepared a thorough filing without pushing the boundaries, writes Steven M. Davidoff. DealBook »

MONDAY, OCT. 7

Little Fear on Wall St. of Default, at Moment | Many investors learned from the 2011 crisis â€" and the budget standoff at the end of 2012 â€" that Congress can find a way to compromise at the last minute, and are expecting the same thing to happen again. DealBook »

DealBook Column: No Way U.S. Would Allow Debt Default? Don’t Bet on It | The more Wall Street is convinced that Washington will act rationally and raise the debt ceiling, the less pressure there will be on lawmakers, writes Andrew Ross Sorkin. DealBook »

Worsening Debt Crisis Threatens Puerto Rico | The territory has almost as much debt per capita as Detroit and is drawing federal concern. DealBook »

Legal Side Effect in Admission to S.E.C. | DealBook »

Cuban Says He Was Taken Aback by S.E.C. Charges | Mark Cuban, the owner of the Dallas Mavericks, said he was cooperating with the S.E.C. in an inquiry, and was surprised to learn that he was being charged with insider trading. DealBook »

More Setbacks in Deal for U.S. Tire Maker | The proposed buyout of Cooper Tire and Rubber by Apollo Tyres has been delayed by labor opposition in two countries, and now Cooper has filed suit against its suitor. DealBook »

WEEK IN VERSE

Some shutdowns we preferred to the current crisis.

Liz Lemon | Tina Fey shuts down everything on “30 Rock.” YouTube »

Dirk Nowitzki | The Dallas Mavericks star sends everyone home. YouTube »

Peter Venkman | The Ghostbusters containment unit was never designed to be shut down. YouTube »