If this wasn’t going to eventually cause so many decent people so much pain, I’d be tempted to uncork some champagne this morning. Wall Street’s wrinkled whores are finally dying of their financial STDs.

Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.

The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarves WorldCom Inc.’s insolvency in 2002 and Drexel Burnham Lambert’s failure in 1990.

This isn’t a failure of free market capitalism. It’s precisely the opposite, it’s the failure of government-controlled faux market capitalism. The lesson, as always, is that debt is a lethal, fast-moving, corporate cancer. Leverage lets you make money fast, and it will finish you off even faster when – not if – you make a bad bet.