At the first class of the semester in September, Xia Chun told students in his investment analysis course they would be witnessing history. He was right: at the time news was just emerging that the US government would take over the troubled mortgage giants Fannie Mae and Freddie Mac. Since then, Xia, an assistant finance professor at the University of Hong Kong, has frequently revised his lecture notes to take in dramatic events, including the collapse of Lehman Brothers and the proposed bailout package for US banks. 'I had taught this course for six years in the US, but this is the first time I've had to include so much material from the markets outside,' he says. There was no shortage of material for case studies. For example, news of Citic Pacific's HK$15.5 billion loss from investments in so-called accumulators was the cue for a special lecture on how such structured products worked. A class on mortgage-backed securities - a subject normally for the end of the course - was quickly moved forward to coincide with the talk of the town. 'The question I get asked most often is how can the subprime crisis in the US spread to the whole world,' Xia says. Even as the unfolding financial crisis chilled the global economy, it has energised economics classes. At universities across Hong Kong, other lecturers have also had to redraw lessons, but it's hard work trying to relate dry theory to fast-moving reality. For Suzanne Young, who teaches macroeconomics to MBA students at Chinese University, that also meant making last-minute updates. 'Because of the time difference with the US, I would get up at 6am and go online to see if anything happened overnight, and often I've had to amend my class material,' she says. Used to thorough preparation, Young initially found it a little stressful to make late changes to lesson plans, especially because her subject isn't finance and she had to explain the effect of structured financial products on monetary policy in simple ways. But she quickly adapted. 'I began to find it exciting and I think the class caught that,' she says. 'Many students hate economics. They think it's just a bunch of graphs and formulae in a textbook with no relevance to everyday life. By relating class material to what they see in the newspapers I could change that attitude.' First-year MBA student Andrew Lam Yau-lun was pleasantly surprised by this approach. 'I thought [the class] would be quite boring,' he says. 'What makes it more interesting is we have classmates from around the world who relate to what's going in their own countries. Some have deposits in banks that are under threat.' Chaos in the markets has been a boon for academics teaching less glamorous topics. Even statistics - a subject that tends to have eyes glazing over - can spark excitement. At the University of Science and Technology, Mike So Ka-pui was surprised to find himself mobbed by students after a talk on using a statistical model to track and predict the turmoil. Many wanted to learn how they could use statistical techniques to manage risk in their own portfolios. 'Since some are working, they wanted to know how it might apply to their own jobs,' he says. For Gao Xiaohui, who teaches a course on fixed-income securities at the University of Hong Kong, the uncertain times provide the perfect opportunity to present her subject. 'There aren't usually a lot of colourful stories to tell, so students tend to ignore the bond market,' she says. But she has had no trouble keeping students interested this time round. 'With another bank in crisis every day, I only have to mention the headlines.' It has been an eye-opener for Christina Zhang Li, a third-year finance student who thought derivatives were a far more exciting subject. 'But now I realise how important the credit market is; even simple loans are crucial.' At City University, Tom Vinaimont says it has become easier to get students to appreciate the need for risk management in his classes on derivatives. 'In the past, when we discussed risk factors, they tended to just shrug and go, 'whatever',' he says, despite citing examples such as the collapse of Long Term Capital Management in 1998 and the unauthorised trades by a rogue dealer that led to Euro4.9 billion (HK$48 billion) losses for Societe Generale in France last year. 'Textbooks talk about the Great Depression and the Asian financial crisis, but that is too much in the past for undergraduates. This crisis is much more real to them.' Xia found out how his students were personally affected when, as part of a mid-semester project, he asked the class to suggest solutions to steer themselves through the financial crisis. 'I expected students to write a paragraph or two, but I was surprised at how actively they responded, sharing stories of how their families had incurred losses in the crisis,' he says. A student, who prefers not to be named, wrote: 'My dad had invested in US and China stocks and although he didn't tell me how much he had lost, I'm guessing it was a lot. And my parents were planning to sell our house to raise money for my studies, but now nobody is willing to buy.' Another student talked about how a friend was unable to find work after losing his job at Lehman Brothers and is now making a living as an economics tutor. The exchanges continued by e-mail and, with individuals' consent, Xia later presented their stories to the class, adding his opinions on how to cope. 'Some of the situations they described were really depressing but, hopefully, by sharing them with the class they will realise they're not alone,' Xia says. One student, whose family bought hundreds of thousands of dollars worth of mainland funds, says their investments have now shrunk to one-tenth of their original value. 'I kept telling my mum to sell, but the more the value depreciated the more she was afraid to lose,' he says. 'Now she says she'll just wait another 10 years, although I don't think the market will reach the peak at which we bought the funds and I'm worried that those fund houses will go bankrupt.' Marco Li Cheuk-pong's parents haven't suffered as badly in their investments but, like his classmates, the final-year business administration student is worried about career prospects. There is palpable anxiety across the campuses about a grim job market. Accounting students have been unpleasantly surprised to see economics and finance majors seeking work in their field. Some plan to postpone their job search by enrolling in postgraduate courses, but with former bankers now also making a beeline for universities, applications have become more competitive. Still, some students are taking a positive view of their future. Even though investment banks have ceased to exist as independent entities, Zhang and her classmates in finance haven't given up their dream of working in glamorous capital markets. 'Maybe it will take longer to get there and we may have to find other routes, but the industry always needs smart people,' Zhang says. 'I haven't lost hope.'