General Growth Properties made history last week with the largest real estate bankruptcy in history, and CEO Tom Nolan appeared on CNBC to explain the move (see video below).

According to Nolan, everything is basically fine. They're able to make their interest payments and tenants aren't leaving. The entire problem is the company's inability to rollover its $27 billion debt load it accumulated acquiring the properties that helped make it the second largest mall operator in the country.

U.S. stock futures were mixed to lower Thursday morning, indicating Wall Street could have yet another slow start despite J.P. Morgan Chase (NYSE: JPM) beating analyst earnings estimates and Nokia (NYSE: NOK) meeting them. Some housing data will also be in focus this morning, as is news of General Growth Properties (NYSE: GGP) filing for Chapter 11.

[Update 8:50 am: Futures turned higher despite housing data coming in lower than expected housing starts and building permits, as well as another decline in jobless claims.]

Meanwhile, the number of American households threatened with losing their homes jumped 24% in the first three months of this year. And this number could rise further as major lenders restart foreclosures after a temporary break. However, President Barack Obama's plan to help up to 9 million borrowers avoid foreclosure could help.

Early this morning, mall owner and operator General Growth Properties announced that it filed for bankruptcy protection. The company noted that it couldn't "reach an out-of-course consensus" on how to deal with its debt. Roughly 158 regional shopping centers also filed for bankruptcy protection.

In February, GGP's past due debt totaled $1.18 billion and another $4.1 billion debt could be accelerated. The company expects to pursue a plan of reorganization that should extend mortgage maturities and cut the firms corporate debt. GGP received a commitment for a debtor-in-possession financing facility of roughly $375 million from Pershing Square Capital Management.

Analyst upgrades:

• RBC Capital believes software stock fundamentals have bottomed and that the next several quarters should see reduced earnings risk, easier comps, stimulus spending benefits, and lower FX headwinds. The firm upgraded Microsoft (NASDAQ: MSFT), Taleo (NASDAQ: TLEO), Digital River (NASDAQ: DRIV) and Symantec (NASDAQ: SYMC) to Outperform from Sector Perform.
  
• Rodman & Renshaw upgraded Provectus (OTC: PVCT) to Outperform from Market Perform. The firm has increased conviction in the success of the company's ongoing trial of PV-10 in melanoma.
  
• Citigroup upgraded shares of American Express (NYSE: AXP) to Hold from Sell as it believes the risk/reward is balanced at current levels and that there are signs of potential credit market stabilization. The firm raised its price target on shares to $16 from $9.
• Brinker (NYSE: EAT) was upgraded to Outperform from Market Perform at Wachovia.
  
• PG&E (NYSE: PCG) was raised to Outperform from Neutral at Credit Suisse.
  
• Federal-Mogul (NASDAQ: FDML) was lifted to Conviction Buy from Buy at Goldman.

It's Friday, and a big storm is approaching the West Coast, a fitting end to a wild week. The SEC is investigating whether certain hedge funds allowed employees and favored clients to redeem their money before less favored clients. If allegations are true, then this gives new meaning to the term "front running", and should prove a great way to rebuild the reputation of an industry already viewed as having questionable ethics.

Even while dancing on the edge of the Great Abyss one should keep one's eye on the numbers. In this case, the key indicators that presage an economy at risk of totally imploding. Sure, the auto sales numbers were no worse than grim expectations and the ISM manufacturing number was actually a positive. But, oh, we have lots of nasty numbers to go around. Start with the RevPar number. That's short for revenue per available room at hotels and is a solid indicator of the health of the travel industry, as well as the state of business travel spending. The number? Down a stunning 15.3% in the month of January, year-over-year.

It's a rough time to be a shopping center company and, arguably, General Growth Properties (NYSE: GGP) is in the worst shape of the lot. The company faces a whopping $27 billion in maturing debt coming due over the next four years. On Friday, Feb 20, it announced it had defaulted on loans. The Piqqem Sentiment on the company is negative. Shares that traded over $60 per share two years ago are now below 50 cents and are a favorite football of speculators betting that the syndicate of lenders will throw GGP a lifeline rather than eat the bankruptcy costs.

There might be a happy ending to this story, however. The company reports earnings on February 23 and it will certainly be an interesting report -- most likely grim numbers as staggering retailers pass on their shopping plague to the biggest shopping center landlord.

Mall operator General Growth Properties, Inc. (NYSE: GGP) has seen its share price plunge more than 98% during the past year, with the equity recently plummeting into penny-stock territory amid concerns about a possible bankruptcy filing. Maybe I'm just an impatient member of the MTV generation, but it struck me today that these Chapter 11 rumors have been swirling around Wall Street for what seems like ages. Can we get some closure on this soap opera, GGP?

Well, according to a report today in the Wall Street Journal, GGP's deadline to renegotiate a $900 million loan on two luxury malls in Las Vegas came and went Thursday with no resolution. The mall mogul is still in talks with its lenders to negotiate a new deal -- but it's now haggling outside the confines of its forbearance agreement, which means those lenders, led by Deutsche Bank (NYSE: DB), can demand payment at any time.

General Growth Properties (NYSE: GGP) could be nearing the end of the line.

The company has been unable to work out an extension of a $225 million loan arranged by Goldman Sachs (NYSE: GS). The payment deadline passed on Monday, and so far there has been no announcement of an extension. According (subscription required) to The Wall Street Journal, "Goldman has at least one unidentified partner in the loan who has balked at providing an extension, according to people familiar with the talks."

If Goldman elects to foreclose on the real estate collateralizing the loan, it could trigger a wave of cross-defaults that would leave the company with no choice but to file for bankruptcy protection.

A General Growth bankruptcy would be one of the largest in real estate history, and could wreak havoc on the already beaten up commercial real estate market.

Shares of General Growth are relatively unchanged in trading today as investors wait around for the big news. In the next few days General Growth will announce either another reprieve or a bankruptcy filing.

General Growth Properties (NYSE: GGP) has changed its bankruptcy counsel from Sidley Austin LLP to hire Weil, Gotshal & Manges LLP, according to The Wall Street Journal (subscription required). The latter firm has also worked on the Lehman Bros. bankruptcy.

The company has warned that it may have to file for bankruptcy if it can't find a way to restructure the more than $27 billion in debt that will come due over the next few months.

Back in January 2008, then-Marketwatch columnist Herb Greenberg raised red flags over General Growth Properties' debt load. The company responded with a press release saying that "The Company is absolutely not in any danger of having to contemplate a bankruptcy filing, and the Company unequivocally has no intention of doing so." The company added that it had assets that "can be used through a variety of means to raise substantially more capital than could be required, even under the most "doomsday" of future possible scenarios for how the current commercial retail real estate markets might evolve over the next two years."

Well here's the doomsday scenario and there are the bankruptcy lawyers. But don't worry: The press release added that "Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons."

With big bets on the collapses of companies like Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) and MBIA, Inc. (NYSE: MBI) and Ambac (NYSE: ABK), William Ackman profited handsomely with his bets on the decline of the housing market under the weight of too much risky debt.

Now he's taking the other side of that idea. In an amended 13-D filed with the SEC on Monday, Ackman's Pershing Square Capital Management disclosed that swap contracts with several institutions have raised its stake in General Growth Properties (NYSE: GGP) by an additional 18.1%, on top of the 7.5% stake he reported last month.

General Growth Properties owns and/or operates 200 regional shopping malls in 44 states, and had been one of the most highly-valued REITs in the market. But a heavy debt load and economic woes sent the companies stock price from more than $49 toward the end of last year to a low of 24 cents last month.

The company has major issues with its creditors and has attracted the scorn of credit rating agencies.

Given Ackman's record on real estate and debt predictions of late, it's hard to make the case for betting against him when he finally expresses some bullishness on a distressed company.

With the end of the year fast approaching, it's time to start putting together "best of" and "worst of" lists for 2008. This entry is a little bit of both, but it's admittedly heavy on the "worst of." Among the current members of the S&P 500 Index (SPX), just 11 were sitting on a year-to-date gain as of the close of trading on Monday, November 24. Since Big Lots (NYSE: BIG) is unchanged, that means we have a whopping 488 securities sitting on a loss for the year.

Let's start with the bad news first. Among the worst-performing stocks on the SPX, the six top spots are claimed by stocks in the Insurance and Real Estate sectors. General Growth Properties (NYSE: GGP) has the dubious honor of dropping nearly 98% on the year, and -- not surprisingly -- American International Group (NYSE: AIG) isn't far behind.

Analyst upgrades:

• Citigroup upgraded shares of Sovereign Bancorp (NYSE: SOV) to Buy from Hold on their belief Sovereign will merge with Banco Santander (NYSE: STD) according to the terms on their October 13 agreement.
  
• Jefferies upgraded Whole Foods (NASDAQ: WFMI) to Hold from Underperform on valuation as they believe the capital infusion from Leonard Green limits downside risk. The company's target was raised to $11 from $9.50.
  
• Banc of America upgraded Max Capital (NASDAQ: MXGL) to Buy from Neutral on valuation, the company's strategic changes to lower earnings volatility and their belief it is well positioned to benefit from an improved P&C marketplace.
• Qimonda (NYSE: QI) was upgraded to Neutral from Underperform at Cowen.
  
• Health Net (NYSE: HNT) was raised to Neutral from Sell at Goldman.
  
• Parkway Properties (NYSE: PKY) was lifted to Market Perform from Underperform at Wachovia.

Analyst downgrades:

Today was a great day in anticipation of the bailout, up until the point that traders sold the news. There is still a fear of holding anything into the weekend where bad news comes in the form of takeunder mergers on Monday. Today's jobless rate was 6.1% and the non-farm payrolls posted 9 consecutive declines.

Here are today's unofficial closing bell levels:
DJIA 10,325.70 (-157.15; -1.50%)
NASDAQ 1,947.39 (-29.33; -1.48%)
S&P500 1,099.24 (-15.04; -1.35%)
10YR T-Note 3.644% (-0.002%)
52-Week Lows
Top Analyst Downgrades

The big news of the day was rather complicated. Wells Fargo (NYSE: WFC) has decided to step in and merge with Wachovia Corp. (NYSE: WB) in an all stock transaction for the entire company. Wachovia closed up nearly 60% at $6.21 on over 250 million shares.

Citigroup Inc. (NYSE: C) bit the dirt today. It is the potential loser in the Wells Fargo-Wachovia deal and it paid the big price today. Citigroup fell more than 18% to $18.35 on the news and it traded nearly 300 million shares.

Want to see what Warren Buffett said on bailout and bank mergers?

General Growth Properties Inc. (NYSE: GGP) got a a lift this morning on what many would otherwise consider bad news. The REIT has replaced its chief financial officer and suspended its dividend. Shares were up 27% at $9.70 right at the close today an more than 16 million shares.

Ford Motor Company (NYSE: F) fell almost 5% to $4.14 after it announced plans to sell up to $500 million worth of stock to buy back debt from its credit arm to help shore up its bottom line.

MAJOR PAPERS:

• U.S. mall owner and operator General Growth Properties Inc (NYSE: GGP) is reportedly shopping its portfolio for capital to pay off $18.7B of debt coming due over the next four years to potential joint venture partners, according to the Wall Street Journal.
• The Wall Street Journal also reported that Merrill Lynch & Co Inc (NYSE: MER) is expected to reported another quarterly loss this week, as well as up to $8B in new write-downs, a person familiar with the matter said. This would bring its total to more than $30B since October.
• The Financial Times reported that General Electric Company (NYSE: GE) is planning to invest up to $2B in China in acquisitions and other deals in order to double its revenues in the country...

WEB SITES:

• Barron's Online said Gildan Activewear Inc (NYSE: GIL), the leading maker of undecorated t-shirts and sweatshirts for the U.S. wholesale market, might be worth a look. All of the company's shirts are now made in Gildan-owned factories in Central America and Caribbean, allowing Gildan to achieve cost benefits of offshore manufacturing before competitors like Hanesbrands Inc (NYSE: HBI). Gildan has recently broadened its market with the acquisitions of two sock makers.