AMR, the parent company of American Airlines filed for Chapter 11 bankruptcy protection today. This graph shows the rise and fall of its stock price. It looks like AMR rode the housing bubble where its stock price peaked at the same time the housing bubble peaked. The price dropped steeply when the housing bubble burst and the financial crisis spooked the markets. It has wandered around since then but it never recovered from the boom and bust.It filed for Chatter 11 in effort to use bankruptcy protection to cancel its employment contracts and renegotiate at a lower cost structure. This appears to be an all too common way for businesses to get out of contract obligations and use bankruptcy to reduce wages. Apparently, its wage structure was fine with stock investors during the housing boom. The recession is like an ebb tide. It exposes problems that are not visible at high tide.
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