Markets Know Nothing?

When I see reports like this, it is very clear that we should not be using the market for anything other than a poll.

General Motors Crash Warning - Forbes.com: "General Motors sees signs pointing to the end of the road. On Thursday, a regulatory filing revealed that accounting firm Deloitte & Touche, the company's auditor, has 'substantial doubt' the disturbed automaker can stay in business.

The warning was not necessarily surprising, but investors treated it as if it were. Shares of GM fell 15.5%, or 34 cents, to close at $1.86, in trading in New York on Thursday. Over the past year, the automaker's stock value has lost 91.9%."

What I am unsure of is: Does this mean that the markets thought the Feds would bail out the company therefore thought the stock would be worth something, or does it mean that the market was relatively clueless to what seems like the inevitable and/or optimistic beyond any measure of reality. Would there be any value in the stock if it was actually nationalized?