At Condé Nast Portfolio, it became clear to us early this year that Wall Street was living through its very own “annus horribilis,” as Queen Elizabeth II once so aptly put it. And so, some months ago, we asked Liar’s Poker author Michael Lewis to try to capture the year, and indeed the era, that is now crashing to a close.

In 1989, when Lewis, then a twentysomething ex-Salomon Brothers trader, set out to write a book chronicling

the excesses of Wall Street, he thought he was writing a period piece about the 1980s. “Not for a moment did I suspect that the financial 1980s would last two full decades longer,” he writes in this issue.

Lewis’ piece, “The End," picks up where his book left off. It shows how the hubris and recklessness that shocked him as a young man 20 years ago grew into a far more astonishing system, one in which investment banks’ financial engineers were packaging bad loans and turning “garbage into gold.” Wall Street, he writes, built a “doomsday machine” that would inevitably self-destruct.

Now the ripple effects of the arrogance and greed that took root in the ’80s, and shook the financial system

to its core in 2008, will spread well into 2009 and beyond. Already, the five investment banks are gone—one in bankruptcy, two sold, and the two others, Goldman Sachs and Morgan Stanley, remade into commercial banks. Next to fall: the hedge funds.

At the peak of the hedge fund boom earlier this year, there were more than 10,000 funds managing nearly $2 trillion. The shakeout has already begun, with worse to come. In “The Hedge Fund Collapse," our Wall Street columnist, Jesse Eisinger (who’s been early and accurate in his predictions about much of what has happened this year), warns that as many as half of all hedge funds—about 5,000—will be wiped out during the next year. Assets, down 10 percent in the third quarter alone, may fall an additional 40 percent in 2009, as the funds lose money and clients rush for the door.

Private equity surely won’t be far behind, and because those firms are so loaded with debt, the damage may be much worse. One bellwether deal will be the Blackstone Group’s October 2007 purchase of the Hilton hotel chain. The $26 billion acquisition, a 40 percent premium over the chain’s share price, “was the last big deal of this noisy bonanza, the collision point of leveraged-buyout fever and the hyperinflated real estate market,” Joe Keohane writes in “Heartbreak Hotels.”

How the Hilton deal fares will help determine the legacy of Blackstone’s controversial C.E.O., Stephen Schwarzman, the man who has come to personify the private equity industry. The question, Keohane writes, is “whether he will be immortalized for his financial acumen or instead come to personify the excesses of a bloated, bygone era.”

While the fallout from this crisis is sobering, the outlook isn’t all grim. In our “2009 Investing Survival Guide," for instance, we profile 10 people who have somehow managed to profit during the turmoil. The breadth of their innovations—from real estate flippers and poker players to a man who made a fortune selling comic books—is refreshing.

And while the findings of our exclusive survey of the economy are hardly heartwarming, there are glimmers of light: In spite of the carnage so far, most finance executives think their firms will emerge stronger once the troubles pass, a sentiment you wouldn’t expect.