SAN FRANCISCO — If it wasn't so scary for the rest of us, the once-in-a-generation crisis shaking Wall Street right now would be a joy to watch.

SAN FRANCISCO — If it wasn't so scary for the rest of us, the once-in-a-generation crisis shaking Wall Street right now would be a joy to watch.

After all, how often does the average Joe get to see the masters of the universe shaking in their pinstriped suits, filing out of Mammon's New York fortresses with pink slips in their hands, brows furrowed as they calculate how long their last bonus will pay the rent on the Park Avenue duplex.

Unfortunately, this is no laughing matter. For all its faults and egos, Wall Street is the engine that powers the global financial system. When it's in crisis, we are all in danger. That's why it's time for the purveyors of the ultimate confidence game — the markets — to stop looking for the end of the world and start trading and lending again.

The first two weeks of the new trading year have seen the credit crisis that began last August steer the national dialogue from one of a fear of recession to one of potential financial Armageddon, with the rescue of Countrywide Financial Corp. by Bank of America Corp. triggering concerns that more financial institutions may need to be bailed out or fail before this is over.

Another way of telling that the shutdown in lending and surge in mortgage and credit loan defaults has finally reached the pain threshold of America is that the politicians and presidential candidates have started to respond. Although the credit crisis started six months ago, it really wasn't until the past week that they declared the immediate priority of the country to be the rapidly weakening economy — not the war.

Of course, everybody was quick to put out a plan. And that's better than nothing. But let's face it, no stimulus plan of any short-term effectiveness has a chance of getting through Congress in time to stave off recession, if indeed we are entering one. The debate has shifted, which is a good thing. But Wall Street created this bubble — with the help of every home buyer — and Wall Street needs to get us out.

Amid the carnage of Citigroup, Merrill Lynch & Co. and Countrywide, among others, some heads remain level, and they are setting the agenda. Until now, they've been the sovereign funds the international, often government-controlled asset managers who have quickly jumped in and carved up tasty pieces of some of the U.S.'s biggest financial institutions. They aren't selling. They're buying.

While the debate in Washington stalls on whether it's smart to let the Korea Investment Corp. own a piece of Merrill Lynch — forget that Wall Street banks have been buying into China and other parts of Asia for years now — the practice of globalization has gone on just fine, from an international perspective.

But it won't really turn things around until some of the bargain hunters begin to emerge on Wall Street itself, something we thankfully got our first signs of in the past few weeks.

Bank of America's decision to bail out Countrywide, while likely made for selfish reasons to double-down on its existing investment in the troubled lender, is a sign that one of our biggest banks is willing to stick a stake in the ground on this crisis. The New Jersey pension fund's bold move to buy a piece of Merrill this week along with more sovereigns, is another example of confidence emerging again. And what better example do you need than that of Jamie Dimon, chief executive of J.P. Morgan Chase & Co., brashly declaring amid a 34 percent decline in quarterly earnings that the crisis makes the idea of him making an acquisition even more likely. Washington Mutual anyone?

If anything, the crisis has exposed the hedge funds and the private equities barons for the flimsy, fair-weather funds they are, completely frozen when it comes time to put up some real cash. In their place, the healthy banks and pension funds are moving in to help try to save the structural underpinnings of the financial system.

This is the type of confidence that made Wall Street famous, and which at some point will pull us away from the abyss, perhaps sooner than we think.

David Callaway is editor-in-chief of MarketWatch.