Economics & Finance / Finance & Investment / Stock & Capital Markets
How a Nuclear Superpower Went Bankrupt Overnight (1998 Russian Default)
In 1998, Russia—a nuclear-armed superpower with vast resources—defaulted on its debt, not because it ran out of money, but because it chose to. This video breaks down the groundbreaking 2003 study by Darrell Duffie, Lasse Heje Pedersen, and Kenneth J. Singleton from Stanford and NYU, published in The Journal of Finance. They built a model to decode sovereign yield spreads using Russian bonds as a case study. You'll discover why Wall Street priced Russian debt as risk-free just months before the crash, how political survival trumps math in sovereign defaults, and the hidden role of liquidity in destroying value. Learn the brutal truth: sovereign debt is a game of political will, not just spreadsheets.
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