The Mall Is Flat

It's important to remember that as with General Growth Properties, some retailers and other businesses didn't go under simply because sales dropped a bit and suddenly they weren't making any money. They went under because they amassed immense amount of short term debt which they thought they could just keep refinancing until the end of time. The economic downturn exacerbated this, but a big issue has simply been the increased difficulty in refinancing.

General Growth Properties Inc.'s decision to file one of the biggest Chapter 11 bankruptcy cases in U.S. history Thursday resulted from its inability to refinance mounds of debt, taken on during a rapid expansion, when credit markets crumbled...The Chicago-based company, which is master developer of Columbia and owner of most of the Baltimore area's regional malls, amassed $27 billion in debt by buying malls and shopping centers. Much of that debt came with its acquisition of Columbia's Rouse Co. in 2004.

Your view of the financial crisis probably depends on whether you think the state of affairs which allowed GGP to borrow to expand so much is the good and normal one, and the drying up of credit to companies like them a temporary aberration, or if you think that cheap money for everyone all the time regardless of ability to repay is problematic.

Loans were given out without concern for repayment ability because refinancing was always an option.