That's the gentle dominoes falling version. Then there is the version where lending institutions completely rethink the risk in that sector. In that version th

That's the gentle dominoes falling version. Then there is the version where lending institutions completely rethink the risk in that sector. In that version they call loans and stop extending credit to same or similar businesses overnight. When Enron collapsed every other energy trading firm lost access to trading capital, taking out the entire sector. Whether or not energy companies should have been speculating in the futures market with borrowed money is a separate conversation.