> Can someone here enlighten me how a default can be "contagious"?

The 2010 movie "Inside Job"[1] about financial crisis in US presents real-life examples, starting with the Icelandic financial crisis.

There is also this Warren Buffet interview[2] which presents his unique viewpoint on what happened in the US around the time Lehman Brothers defaulted in 2008. You probably won't gain any knowledge from it other(edit) than how the financial sector assigns blame.

edit: word "other" added in previous paragraph

[1] https://www.youtube.com/watch?v=T2IaJwkqgPk "Inside Job (2010 Full Documentary Movie)"

[2] https://www.youtube.com/watch?v=k2VSSNECLTQ "Warren Buffett Explains the 2008 Financial Crisis"