leverage – The Risk Diary

March 2008. Bear Stearns, a Wall Street powerhouse, collapsed in a matter of days as funding dried up and confidence evaporated. Its sudden fall was the first domino of the financial crisis, teaching us how fragile liquidity and reputation can be.

Case Study

Risk

AIG – The Insurance Giant That Needed a Bailout

2008: When Lehman fell, the world turned its eyes to AIG — an insurer that had quietly written billions in guarantees on toxic mortgage securities. Collateral calls crushed it, and only a government rescue kept the global system from collapse.

Case Study

Risk

Lehman Brothers – The Bankrupt Giant of Wall Street

2008. Lehman Brothers filed for bankruptcy, triggering the worst financial crisis since the Great Depression. Behind the headlines was a toxic mix of leverage, subprime mortgages, and misplaced confidence. This is how a Wall Street giant fell.

Case Study

Risk

LTCM – The Hedge Fund That Almost Broke the System

1998 – A hedge fund run by Nobel laureates promised to tame risk with math. For four years, it worked—until Russia defaulted and the models crumbled. Long-Term Capital Management nearly pulled the entire financial system into the abyss.