It refers to money that you can't get back, you've already spent it, and you feel that because you've spent that money you should spend even more money on the same bad idea.
Or do I look to sell the property and I won't recover what I put into it, so I'm not going to be recovering my clothing costs or any of my down payment.
If this happens enough, and the bank was unable to call back its extremely risky venture loans, they ran the risk of not having enough cash to honor withdrawals.