Las Vegas Sun

By Liz Benston · January 22, 2008 · 1:50 PM

Loose lips can sink ships – or at least stock prices.

Executives of one of the country's biggest mall developers put on a happy face at Friday's press conference unveiling their latest high-end property: the Shoppes at the Palazzo.

Responding to fears that consumers are spending less, executives said wealthy shoppers aren't as affected by downturns and noted that Las Vegas' international tourists see the weak dollar as an invitation to spend.

Behind the scenes, General Growth – which also owns the Grand Canal Shoppes at Venetian as well as the Fashion Show, Boulevard and Meadows malls – was fighting published rumors in the national financial press that the company could default on its debt or even file for bankruptcy.

General Growth on Saturday took the unusual step of issuing a press release taking unnamed media sources to task for "inaccurate" and "irresponsible" allegations and siding with a REIT newsletter that concluded: "the editors signing off on this crap should have their press passes yanked."

"The company would ordinarily not respond to these types of statements and suggestions but in light of the current fragile condition of the real estate capital markets, it believes that it is now ... imperative ... To do so

immediately," the release began.

This reaction – or perhaps overreaction – is the latest sign of just how unstable the markets are right now.