The "professionals" were as badly off as the ordinary citizens catching news flashes on TV or radio, or so it seemed. In fact, it was far worse for them. Understanding the mathematical models as well as they did became not an asset, but a liability. To the average citizen what he saw was incomprehensible at first, and as a result, few took any action at all. They watched and waited, or in many cases just shrugged since they had no stocks of their own. In fact they did, but didn't know it. The banks, insurance companies, and pension funds that managed the citizens' money had huge positions in all manner of public issues. Those institutions were all managed by "professionals"—whose education and experience told them that they had to panic. And panic they did, beginning a process that the man in the street soon recognized for what it was. That was when the telephone calls from individuals began, and the downslope became steeper for everyone.

What was already frightening became worse. The first calls came from the elderly, people who watched TV during the day and chatted back and forth on the phone, sharing their fears and their shock at what they saw. Many of them had invested their savings in mutual funds because they gave higher yields than bank accounts—which was why banks had gotten into the business as well, to protect their own profits. The mutual funds were taking huge hits now, and though the hits were limited mainly to the blue chips at the moment, when the calls came in from individual clients to cash in their money and get out, the institutions had to sell off as yet untroubled issues to make up for the losses in others that should have been safe but were not. Essentially, they were throwing away equities that had held their value to this point, for which procedure the timeless aphorism was "to throw good money after bad." It was almost an exact description for what they had to do.

The necessary result was a general run, the drop of every stock issue on every exchange. By three that afternoon, the Dow was down a hundred seventy points. The Standard and Poor's Five Hundred was actually showing worse results, but the NASDAQ Composite Index was the worst of all, as individual investors across America dialed their 1-800 numbers to their mutual funds.