GM's earnings for the year have been terrible (not saying anything new here). Yahoo Finance has them as -$53.3. The S&P 500 aggregate P/E is calculated by adding all of the earnings of the companies together and then dividing the current price of the S&P 500 cash index by that aggregate earnings number. This is flawed since the S&P 500 index is priced according to weighting each company by its market cap. However, there are arguments for/against weighting the aggregate earnings by market cap, I'm not arguing here, I'm just trying to present a hypothetical situation and make sure my thinking is correct. The S&P aggregate earnings can be found here: http://www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS?GXHC_gx_session_id_=5350992f205e73e4& . So, let's pretend that GM was removed from the index and replaced with a company that was not operating at a loss (just assume $0 earnings/share for the calculations). The S&P 500 actually changes to having a reasonable P/E, which doesn't leave the index looking inflated by much. Current earnings of the S&P 500 using spreadsheet: This is adding together cells D35,38,39, and 40 as they did for the P/Es on the spreadsheet. 7.32 - 23.25 + 9.73 + 12.86 = 6.66 (seriously, 666 again associated with S&P 500!) estimate if GM weren't there: I use Yahoo's -53.3 number here, let me know if there's a better source. 6.66 +53.3 = 59.96 S&P aggregate P/E: 832.39/6.66 = 124.98 without GM: 832.39/59.96 = 13.88 Questions/comments? Am I doing these calculations correctly? It seems that by declaring bankruptcy, GM could actually be giving a boost to the market fundamentals in a big way if I've done it right.