I write on the night of St. Patrick's Day - a day that saw the ignominious demise of the fifth largest investment bank in the United States, Bear Stearns & Company, where I worked for the eight years through 1992.

The financial world is in shock: what does this portend? Who is next? Is there no limit to the damage? Where will it all end?

Those are all the wrong questions, of course, for a couple of reasons. (1) The answers are not currently knowable, by anyone. (2) The questions miss the only certainty: not how, when, where and why this chaos will end, but the simple and inarguable fact that it will end. And that, when it does, the world will be an almost unimaginably safer place to invest, because the hideous overleveraging that has characterized America and the world in recent years will have been unwound.

Meanwhile, do not try to read too much into the Bear Stearns experience, and do not be in a hurry to generalize from it, much less to extrapolate it. Bear Stearns, which underdiversified into the mortgage area more than did any other major firm, is a study in arrogance, hubris, sheer stupidity, and a complete abdication of the risk management function on which it prided itself for seven decades. Moreover, I suspect that, when the full story is written, we will find that Bear Stearns had more than enough warning, more than enough time, and all the opportunities necessary to close out its mortgage-related exposure - even if it had to write down half its book value - and refused, again and again, to do so. In the end, it was the victim of a good old-fashioned bank run, such as had not been seen in this country since the 1930s.

Spectacular failures in the investment banking and brokerage industry are the rule, not the exception: ours is classically a business which dispenses all manner of good advice to corporate clients which our own firms then blithely ignore. The mere fact that such a failure has not happened in a number of years does not detract from this truth; it merely hides it from those without an adult memory. If the names E.F. Hutton, Kidder Peabody, Drexel Burnham Lambert, Eastman Dillon, L.F. Rothschild, Shearson Hammill, Hayden Stone, Goodbody & Co., and White Weld do not mean anything to you, this time may very well seem different. But it is most assuredly not.

Still, perception rules the short term, every bit as much as reality prevails in the long term. We are most certainly in the grip of a worldwide money panic. And it is in the nature of money panics that the more the central banks of America and the world offer whatever liquidity measures may be necessary, the more the panic intensifies. This will go on until, like a great forest fire, it burns itself out. Only a fool would predict when and where that will be. (And only a wise investor will realize that, wherever the fire burns out, there you will find prices on quality investments which you will never see again in your lifetime.)

In the meantime, a few observations seem in order:

(1) If only by a whisker, the broad equity market in the U.S. has - as of today - still not closed 20% off its October 9, 2007 peak. This is certainly not to suggest that, by any sane definition, we are not in a bear market. We are. There have been twelve bear markets since the end of World War II - on average, one year in five. The average decline is 30%; the mean - if you are comforted by such things - 25%. Thus, even if this is an average bear market, we are much closer to its bottom than to its top.

(2) At this writing, perhaps $150 billion has been - or is clearly about to be - lost in subprime mortgages, the place where the forest fire ignited. Say that much and more remains to be lost - a total of $300 to $350 billion. (Nobody asked me, but I think that's impossible.) Does no one remember that, in the Crash of 1987, $600 billion was lost, nor that the market went down 23% in one day - more than it's gone down (as of tonight) in five months? Does no one remember that, in the 2000-2002 bear market, six trillion dollars was lost on Nasdaq alone?

(3) Does no one see that a debit on one party's books - all the withdrawals that bankrupted Bear Stearns, for example - is a credit on somebody else's? Prime brokerage and other balances in Bear Stearns' favor were not lost during the spectacular run that destroyed the firm: they went back to their rightful owners. Bear Stearns's book value was not lost, other than to them; it is sitting tonight in ten thousand other accounts. And what isn't in those accounts will be, when JP Morgan Chase, using the Fed's loan facility, settles the Bear's positions.

(4) Has no one noticed that unemployment still hasn't been able to break 5% (though it surely must at some point), nor that the decline in the employment figures that started to show up a month or so ago would almost have to be job losses in the financial services and real estate industries? The layoff stories I'm hearing are absolutely blood-curdling, and certainly have much further to go. (Does Jamie Dimon need or even want 3,000 of the 14,000 people who worked at Bear Stearns as of the end of its last fiscal year? I strenuously doubt it.) Does anyone doubt that Citigroup will ultimately lay off at least 25,000 people, most of them in this country? Does no one see the enormous disconnect between the financial sector and the real economy?

(5) Has everyone forgotten the huge cash balances on the books of American corporations, ready to do strategic acquisitions and/or massively to increase their share buyback programs (see IBM's recent announcement, and look at the stock: holding, at this writing, like the proverbial rock)? Can we infer nothing from the fact that Warren Buffett can't seem to find anything to buy, nor that the ultimate vulture investor, Wilbur Ross, only seems to find value in a mortgage servicing business?

(6) Does no one see the contrarian opportunity implicit in a global risk aversion so pandemic that the 5-year Treasury has been bid down to a 2.4% yield? With the dollar crashing? Heck, even at 3% inflation, a non-taxable entity is buying a negative sixty-basis-point return, and a top taxpayer is going into the hole for a point and a half. Do you really think the equity market has much risk in it when 'competing' debt has a negative return? Why, I can just about get a 2.4% current return from the dividend of the S&P 500 right now - and buy a call on all the ups of the next five years for free.

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Please don't get me wrong: I'm not trying to talk the market up, any more than I'd try to talk a forest fire down. It will burn until it's finished burning.

If it bothers you, stop watching it. Concentrate on your financial goals, and notice that nothing's changed. I was a couple of days shy of age 64 when the market topped out last October, and I'm five months older now. But my goals are exactly the same: I still need to secure a retirement income which will rise at a premium to the cost of living for at least 30 years - maybe closer to 40, if you look closely at my bride. I still have to be ready to backstop my daughter and son-in-law - even if I'm convinced they'll never need it - in the funding of my grandchildren's educations. And I'm still determined to leave legacies to them all, such that they won't soon forget that I was here, nor how much I loved working to endow them.

And again, in this maelstrom of uncertainty, I can be absolutely sure of one thing, exactly as I was in 2002: whenever and however this thing burns out, I'll be investing at prices neither you, nor I, nor anyone else will ever see again.