If someone had predicted one year ago that Bear Stearns, Merrill Lynch ( MER) and Lehman Brothers ( LEH) would no longer exist today, such a statement would have been laughable.

Each of the three securities giants had their liquidity issues last year, but it was virtually unthinkable that Goldman Sachs ( GS), Morgan Stanley ( MS) and JPMorgan Chase ( JPM) would be essentially the only ones left standing among Wall Street's giants.

But now we have Lehman Brothers filing for Chapter 11 bankruptcy protection after a series of weekend meetings involving Treasury Secretary Henry Paulson, New York Federal Reserve President Timothy Geithner and several Wall Street chiefs failed to find it a dancing partner. The investment bank will now be forced to liquidate assets and its shareholders are left with a 20-cent stock.

We also have Merrill Lynch being taken out in a $50 billion all-stock transaction by Bank of America ( BAC), which reportedly had been mulling a bid for Lehman before talks broke down.

It's the end of the world as we know it, but no one really feels all that fine.

"Clearly, this has been a category 5 hurricane we've been hit with this weekend," says Paul Mendelsohn, chief investment strategist with Windham Financial. "As the sun came up this morning, we could see how much damage has been done. The problem is that it's not what we see that is going to hurt us, it's what we don't see yet that is really going to hurt us."

To many observers, the failure of Lehman Brothers is a systemic problem that will shake the stock market greater than any event since the stock market crash in 1929. That includes the failure of Long-Term Capital Management exactly 10 years ago, when the hedge fund required a bailout by Wall Street's investment banks after its highly leveraged positions were exposed by the Russian financial crisis.

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