theDesMoinesPerspective

General Growth Stock Price PlummetsReal estate investment giant General Growth stock plummeted to around $0.35 per share this morning on news that the company may declare bankruptcy. General Growth developed and owns the Jordan Creek Town Center "retail resort" in West Des Moines.

Over the next few years, almost $4 billion in debt from recent property acquisition comes due, but current income from their real estate holdings doesn't cover the payments. General Growth acquired Rouse Company in 2004 for $7.2 billion, mostly financed through short-term debt instruments. Defaulting on one debt would likely cause other creditors to call their loans due, precipitating a catastrophic avalanche of defaults.

General Growth officials blame the "credit crunch" for the company's current financial woes. That is, they cannot find people to loan them money to cover their existing loans. Now that there is blood in the water, it becomes even more unlikely that anyone will loan them money - a self-fulfilling prophesy.

There. Like ripping off a band-aid, I said it and there's no going back.