I recently moderated a CFA Hawaii (Institute of Chartered Financial Analysts) panel at the Shidler Business College to discuss the financial crisis. The institute has 100,000 members who advise clients about the securities markets. They have been living in interesting times lately.

The panel included Bob Luck, Mike Hirai and Paul Brewbaker. Bob is the director of the CFA Institute Centre for Financial Market Integrity. Mike is the president of Bishop Street Capital Management at First Hawaiian Bank. Paul is chief economist at Bank of Hawaii. He's also the chair of the State Council on Revenues, whose advice is critical to state policy.

Their presentations were evocative. Visit http://www.thinktechhawaii.com/cfa.aspx to listen to the panel and see their slides. Here are my reactions.

WHY CAN'T TECH HELP?

I'm interested in economics as an imperfect science enhanced by the power of high-tech data gathering, calculation and analysis. But why hasn't it enabled our leaders to prevent this crisis?

You'd think we'd learned how to minimize market meltdowns by now. Poet George Santayana said, "Those who forget history are doomed to repeat it." Have we forgotten our previous crashes, or are the events of 2008 so unprecedented that we could not have prevented them?

CFA Howard Hodel, a market risk manager in Honolulu, supports the Santayana explanation. He says, "it amazes me how quickly market participants forget the basic tenets of managing risk when times appear to be good, or perhaps many are so young that they never learned them."

The way the markets work has certainly changed. In 1929, we tracked and traded securities with ticker and telephone. In 1987, it still took days to trade in or out of mutual funds. Now, with the Internet, anyone can trade instantly from anywhere. But instant accessibility en masse has its dangers too.

We've been inventive in recent years. We've perfected short selling and new tradable instruments like credit default swaps. We've redefined mark-to-market accounting rules to value financial instruments. Some say these advances cont-ributed to the crisis and need to be limited. If so, why weren't they limited earlier? Who's been watching the store?

THE NEW PSYCHOLOGY

The science of marketplace psychology, also imperfect, has also gone to new levels. Where before it was a study of greed versus fear, now there's the "trust" factor. After the greed/ fear cycle takes you down, you begin losing confidence in the system, the economic compact itself. That would explain what has happened here.

It's viral mob psychology. First some uncollectible loans, then presto — worldwide market panic. This would not have happened but for the miracle of modern telecommunications. But how much do we know about the dynamics of global psychology? Not enough, apparently. Before this is done, I suspect we'll know lots more.

The crisis raises troubling leadership and ethical issues. Irresponsible advancement of credit is unsustainable, but we've let it grow wild for years, forgetting history and setting the stage for crisis — institutional greed tolerated on a grand scale. Really, how surprised should we be?

Where's the accountability? If I run my company into the ground, should I then get a splendid bonus and a multimillion-dollar parachute? If I'm a CEO who has acted recklessly, shouldn't I lose my job when things hit the fan? If the captain of the grounded ship isn't held responsible, there's no lesson and this will all happen again.

IS IT OVER?

It goes way beyond the stock market. Janet Yellen, president of the San Francisco Federal Reserve, says that "virtually every major sector of the economy has been hit by the financial shock." The crisis has by no means played itself out — many countries around the world are in or at the brink of recession or financial collapse. Hopefully, our technology can tell us how the crisis will unfold and next express itself.

In Hawai'i it's probably just beginning. Our great vulnerability is our tourism mono-economy, and we've done very little to diversify that exposure. How is the Lingle administration going to balance the budget, provide government, education and social services, much less implement its ambitious energy initiative? Government by sound byte will not work in the difficult times to come.

TIME FOR A NEW LOOK

You'd think with all our technology, we would have not only predicted these events but would have a well-vetted plan ready to nip them in the bud. Not so. The bailout has been imperfect too and the jury is out on whether it will work. In our efforts at damage control, we have found ourselves at the intersection of uncertain economics and raw politics.

Those politics required a shopping bag of irrelevant concessions to pass the second bailout bill. Even in crisis, when concern for survival should be paramount, politics trumps. And how scientific is that bailout? Why $700 billion rather than some other number? No one, not even Ben Ber-nanke or Henry Paulson, can be sure it's the right number.

Alan Greenspan said the Fed has the best computer systems, analysts and decision processes, but that people don't behave as expected. Still, if information technology helped get us into this crisis, perhaps it can be used to get us out of it too. And if global psychology can explain the panic, perhaps it can also suggest a calming effect.

Even now, the world looks to us for financial leadership. For that, we need better structures to keep up with the race between market-enabling technology and the regulation of that technology. We need to protect global well-being with our best minds and science. We need to model a resilient non-political plan that will moderate world markets.

WHAT TO DO NOW

When this crisis passes, the world economy will be different, and national economies, including ours, will be in different relative positions. For the moment, all we can do is sacrifice for a solution, hope to survive until the storm passes, and learn to do things better the next time.

The consensus of the CFA panel was that the crisis won't end anytime soon, and it's best for investors to hold on to their current positions and ride it out. Stay cool, even in the face of dire-sounding predictions.

Warren Buffett thinks this is a buying opportunity. I think the market will go down until a critical mass of people get tired of seeing it go down. Then it will go up. I call it the "fatigue" theory. Right now, we're all getting really tired of seeing it go down. So maybe that's a good sign.