THE BEGINNING OF THE END

Financial juggernaut Lehman Bros. (LEH), the oldest U.S. investment bank, belly-flopped.

This is significant for a lot of reasons, not the least of which that Lehman's failure reduced the number of major U.S. investment banks from five at the beginning of the year, to just three.

Then, Merrill Lynch (MER), the largest retail broker and investment bank, agreed to Bank of America's (BAC) takeover offer for $29 a share, which equates to about $44 billion. MER closed today just above $17 a share today, a 77% drop from the stock's value this time last year.

Looming in the future -- rather, darkening the horizon -- is that financial behemoth American Insurance Group (AIG) was informed that its credit quality will get downgraded. Investors now see that the ailing firm will have to sell many, if not most, of its assets . or be bought or go bankrupt.

I think an offer could even come overnight, but in the meantime, the Fed threw AIG a $40 billion line of credit, as private equity firms are hemming and hawing about what, if any, parts of AIG they might want.

The Treasury and Federal Reserve are showing some tough love, though, and said they won't bail anyone else out. They did, however, jawbone all weekend and added liquidity by expanding the loan availability through traditional mechanisms.

Will it be enough?