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Following the House vote, the Dow Jones Industrial Average dropped over 777 points in a single day, its largest single-day point drop ever.[144] The $1.2 trillion loss in market value received much media attention, although it still does not rank among the index's ten largest drops in percentage terms. The S & P lost 8.8%, its seventh worst day in percentage terms and its worst day since Black Monday in 1987. The NASDAQ composite also had its worst day since Black Monday, losing 9.1% in its third worst day ever.Instead of losing that 1.2 trillion, they could have used it to bail themselves out. Stupid, stupid, shortsighted.
>This is a very well done show... Inside the Meltdown
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http://www.pbs.org/wgbh/pages/frontline/meltdown/view/The quotes reflect the lack of substance nicely:
"Rumors are such that they can just plain put you out of business,"What value does such a company have? Probably not assets - if you have them, you're OK as long as you don't have to sell them fast. Goodwill? Well, if rumors can ruin the goodwill, what good was it, then? Or if it was about trust... if your customers knew you weren't gambling with their money, they wouldn't care about the rumors. But if you were... it's con art that you call business. The sooner you're ruined, the better - you don't have the time to inflict larger damage.
The company's stock had dropped from $171 to $57 a share, and it was hours from declaring bankruptcy.Now how does this matter, anyway? None of this money goes into the company or out of its pockets. It's between the traders. The only two times when a company makes money on its stock is the IPO and when they sell more (thus watering down the value for those who bought them before); everything else is "some guys paying each other for pre-owned paper with our name on it". However, if the whole company lives on a loan and the value of shares was somehow used as the collateral (*) in such a loan, and is now worth less than the loan, well... if they can find the guy who pushed them into the loan, they can beat the stool out of him, but they were in deep when they listened to him in the first place.
http://www.ndragan.com/pv/captain.html----
collateral means "on the same side", but they never say what it is that is on the side, with what, and of what is it on the side.
