CAN it be that only a couple of years ago, Stephen A. Schwarzman of the Blackstone Group, wildly successful in private equity, treated hundreds of guests at his lavish birthday celebration to performances by Rod Stewart and Patti LaBelle?

Can it be that as recently as 2006, financial firms accounted for almost one-third of all the corporate profits in the United States? Or that money was so free-flowing that a single bat mitzvah party could be estimated to cost $10 million?

That era is gone with the wind. Now we face a severe recession, frightening jumps in unemployment, a breathtaking collapse of equity and real estate prices. Now we face a major discontinuity with what has gone before  a real, grinding, 3 a.m. fear, replete with nightmares of bread lines.

Not to belabor the obvious, but much of that fear comes from the crushing downward movement of mortgage-backed bonds and derivative securities linked to them. These losses transformed local housing declines into a global crisis and, along with the breathtaking fall in stock prices, have remained the primary engines of disaster.