Forget talk of soft landings. Ignore those who say that the Federal Reserve is in control of events. Take with a pinch of salt suggestions that the problems at Bear Stearns are a one-off.

The rescue package orchestrated for America's fifth-biggest investment bank makes it abundantly clear that this is now a different sort of market and a different sort of crisis. It is no longer hyperbole to state that the US is facing the most serious threat to its financial system since the Depression of the 1930s.

After days of denying market rumours that it was in trouble, Bear Stearns eventually came clean today and said that it had been forced to seek help from a combination of JP Morgan and the New York Federal Reserve as a result of a deterioration in its financial position in the past 24 hours.

Bear's problems have, however, been building up for a lot longer than that, and the talk of a sudden descent into crisis looks like an attempt to prevent US regulators taking an interest in whether the bank has been trading under false pretences this week.

Like Northern Rock in the UK, it was the bank that was most heavily exposed to the sub-prime meltdown in the American real estate market. Like Northern Rock, it was singled out as the limping wildebeest struggling to keep up with the herd. And like Northern Rock it has been the victim of a bank run, only this time the run has involved other banks selling its shares short rather than customers turning up to withdraw their savings.

The severe problems at Bear Stearns explain why the Fed has been so hyperactive. Ben Bernanke, the Fed chairman, is a student of the Great Depression and knows only too well the role that collapsing banks had in magnifying the impact of the slump. The plan, evidently, is to take decisive action in the hope that Bear Stearns can be ringfenced from the rest of Wall Street.

Whether this works remains to be seen. Previous attempts to contain the sub-prime crisis to America's trailer parks and poorer suburbs proved singularly unsuccessful: the key word of the past eight months has been contagion not containment, and there are plenty of other banks that have allowed greed to influence their investment decisions.

There are three immediate conclusions to be drawn from today's events. The first is that the market turmoil will continue and perhaps deepen. The second is that the Fed will now almost certainly cut interest rates by 75 basis points when it meets next week. The third is that the chronic weakness in the dollar will continue and before long may prompt coordinated central bank action to prop it up.

But the scary truth is that the Fed has lost control of events. This crisis has a life of its own and it is not going to end until a floor is put under the US housing market, because only that will stem - eventually - the losses being made by the banks. As things stand today, that still looks a long way off.