Atlas, R. D. (2001, November 29). Citigroup and J. P. Morgan are left with exposure to loans. New York Times. Internet address: http://www.nytimes.com/2001/11/29/business/
29BANK.html?ex=1008358605&ei=1&en=1dec69ea5a689094.
Citigroup and J. P. Morgan, two very large bankers associated with Enron, stand to lose as much as $900 million each as Enron heads into serious financial problems. The effect on these two companies is significant not only for their possible immediate losses, but because the companies may be more cautious in their dealings with other large companies in the future. In addition, the two banking companies marketed their success with Enron to other companies, and Enron's spectacular and public failings may cause credibility questions with regard to Citigroup and J. P. Morgan among other potential clients. In addition, the owners are likely to seek greater protection in the future, resulting in increased oversight.
Crutsinger, M. (2001, December 1). Experts divided on recession's length. Los Angeles Times. Internet address: http://www.latimes.com/business/nationworld/wire/sns-ap-recessions-future1201dec01.story.
Companies consider economic conditions when making decisions regarding capital financing, hiring, and marketing. If the company believes that the nation is in a recession or heading for a recession, it may delay capital projects or lay off workers to cut costs in anticipation of slowing business. At this point, news reports indicating that the American economy may be in one of the longest recessions since World War II are likely to cause many American companies to proceed cautiously. This recession, which is generally acknowledged to have been exacerbated--but not caused--by the events of September 11, could ease by mid-2002; reports such as this could cause companies to schedule new projects after that time, a move which could help the economy move out of the recession even faster.
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