[02] Stress Testing Your Life — What Happens at -30%, -50%, -60%? This is Part 2 of a 6-part series: Building Investment Systems with Python Banks Do This Every Quarter. You Never Have. After the 2008 financial crisis, regulators required banks to run stress tests — hypothetical scenarios where markets crash 30%, 40%, 60% — and prove they could survive. Your personal balance sheet faces the same risks. If you hold a securities-backed loan, a market crash doesn't just reduce your wealth — it can trigger forced liquidation at the worst possible time. Today we build the stress test engine. One function. Every scenario. The exact cash needed to survive each one. The Core Engine This reads from the ALM database we built in [Episode 01] and runs every drop scenario from -5% to -70%. # stress_test.py import sqlite3 from alm_schema import DB_PATH def run_stress_test ( cash_reserves = 4_500_000 ): conn = sqlite3 . connect ( DB_PATH ) c = conn . cursor () # Current portfolio value c .…