Recently, General Growth Properties Inc. has filed for Chapter 11 bankruptcy due in part to the harsh economic environment. As some of us have realized it is near impossible to get a loan currently since the housing collapse has left banks cautious and scarred. General Growth Properties Inc. is the second largest mall operator in the united States and it was unable to convince investors that it would be able to refinance after a poor last quarter. If this mall giant is unable to secure a good loan who is eligible to get one then? It is devastating to see a company who just recently had enough surplus to buy out its competitors in 2004 to go from around $44 on the market to $1 on the market. The economy is definitely headed to its low point still and i do not see any sign of turn around in the near future. The stimulus package designed to give banks money in hopes that they would continue to lend has backfired in the sense that banks are just holding onto their new found help instead of pumping it back into the economy. The banks need to learn that it was partially their fault that bad credit risks were receiving loans in the first place and that in order for anything to start getting better they are going to have to stop making so difficult to get a loan. I understand that they are hurt and are hesitant after they just screwed themselves over but someone needs to step in and tell the banks to start going toward equilibrium as the pendulum has swung in the complete opposite direction. Regulating the banks is against some of my ideals of limited government interference, however, the banking industry does need some regulation and it appears as though it is not happening correctly. Hopefully The banks let their guard down soon or the housing market will continue to drop and people will just file bankruptcy instead of selling their home at a loss.
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