[DOF_power]

Toyota triples year loss forecast


snip:

The world's biggest carmaker, Toyota, has widened its predicted loss for 2008 after demand for its cars slumped.
In December, Toyota predicted it would make a full year operating loss of 150bn yen ($1.65bn; £1.13bn).
The Japanese car giant has now tripled that figure and expects to make a 450bn yen operating loss, the first annual loss at the firm in 70 years.
...
Toyota is cutting work to a single shift on 17 production lines lines out of its 75 around the world at different times in January and February.
It is also closing all Japanese factories for a total of 14 days between January and March.







>
^ It's not pretty at all.

[Racer Duck]

guess when they all started using the abacus again (cost cutting measure #37) they found all kinds of mistakes with their computer forecasts...

[Bob Tanner]

This isn't surprising but there is a genuine up side to it all. Americans, and I suspect people all over the industrial nation globe, are spending less and saving more (http://news.yahoo.com/s/ap/20090201/...rugal_society).
Since the 50's, people have unfortunately operated their family budgets based on deficit spending and easy credit and the chickens have now come home to roost. There are a growing number of people who realize the Social [[In]Security System is NOT going to provide for their retirement and the only hope for a comfortable retirement is to not spend but rather save.
More and more folks see that fleecing (leasing) a car, or buying one with a five or six year mortgage IS NOT a good idea. Hopefully there will be growing number of people who realize that financing a Whopper at Burger King with a credit card isn't a sound fiscal policy.
No, they aren't buying new cars but if the trend continues, down the road they will be, and hopefully they'll be doing it with cash, or 50%-75% down and a short term of payments. If this is true, the country, and the world be be much better for it.

[DOF_power]

>
^ You are right, no doubt about it.
But there's also the reverse of the coin, (relatively) high savings and/or the obsession with saving.
Like in Germany this resulted in a (relatively) high unemployment rate (even in the west) and economic growth based mostly on exports of old industries/companies witch also scared off investors, and there's no new companies in new industries like Microsoft, Apple, Oracle, Google.
Also China is suffering because it's an export country.

[Racer Duck]

Originally Posted by DOF_power

>
^ You are right, no doubt about it.
But there's also the reverse of the coin, (relatively) high savings and/or the obsession with saving.
Like in Germany this resulted in a (relatively) high unemployment rate (even in the west) and economic growth based mostly on exports of old industries/companies witch also scared off investors, and there's no new companies in new industries like Microsoft, Apple, Oracle, Google.
Also China is suffering because it's an export country.

the problem with new industries is there's no new revolutionary technology like the computer to exploit. I suspect there's a lot going on in the cell phone area with technologies and "melding" it into our vehicles, homes and workplaces. And there will be some big players to come out of it, but as far as I can tell the next big "breakthrough" has yet to be identified... without that, I don't see any entrepreneurs jumping with glee at the prospects of billion dollar futures.

[DOF_power]

>
^ Agreed, but my point was then when the above mentioned industries where new, the american success stories remained just american, the opportunities being ignored/neglected/lost.

[Bob Tanner]

Originally Posted by DOF_power

>
^ You are right, no doubt about it.
But there's also the reverse of the coin, (relatively) high savings and/or the obsession with saving.
Like in Germany this resulted in a (relatively) high unemployment rate (even in the west) and economic growth based mostly on exports of old industries/companies witch also scared off investors, and there's no new companies in new industries like Microsoft, Apple, Oracle, Google.
Also China is suffering because it's an export country.

In the short term (a decade or so) you will have what you describe above. Unemployment will rise and economic growth will slow BUT, in the long run people will buy once more and they will buy with cash, or short term loans after they have discovered the value of the dollar. Plus, credit will tighten, and credit will be extended only to those who can pay it back (Unlike the mortgage fiasco we just went through which was a direct result of Jimmy Carter's 1977 Community Reinvestment Act - CRA) thus interest rates will decrease drastically.
With the exception of the Great Depression (which was brought about when government interfered with trade (re: Smoot-Hawley Bill), the industrial nations prospered with the average person not living on extended credit until post WWII. Then the economy lived with a false prosperity bubble created by easy credit for all. It's taken half a Century but that bubble has pretty much burst and what the industrial world is feeling now is the result of that burst bubble.
I hold fast to the theory that a more stringent personal credit atmosphere might hurt now but, for our grandchildren it will be a Godsend.

[DOF_power]

>
^ The Smoot-Hawley Bill came after the depression begun, and deepened it, and in many ways the signs of 20s prosperity bubble/burst are here again. There was speculation and credit (though in other forms) issues back then too.

And there's no more colonial empires and/or semi-colonies to export manufactured goods like the "old days" and get cheat stuff/resources in return.
That's how the old economic belief/system worked, before easy credit it was easy exports and easy (vital) resources from the colonies and semi-colonies.

My belief is this will happen again in a somewhat altered form.

[Bob Tanner]

Originally Posted by DOF_power

>
^ The Smoot-Hawley Bill came after the depression begun, and deepened it, and in many ways the signs of 20s prosperity bubble/burst are here again. There was speculation and credit (though in other forms) issues back then too.
.
That's how the old economic belief/system worked, before easy credit it was easy exports and easy (vital) resources from the colonies and semi-colonies.

My belief is this will happen again in a somewhat altered form.

Yeah, you're correct about Smoot-Hawley being signed into law after the Depression began, but the general feeling concerning tariffs were being felt at least a year before October, 1929. The enacting of the bill was just a knee jerk reaction which helped to spread our depression to the rest of the world.

Of course, now we're on an identical path, with the government making activist policies to "stimulate" a free market economy (Keynesian Economics - a short term fix causing very long term problems), which is exactly what a free market economy DOES NOT need! But you already are aware of this, I'm sure.

This entire subject is a really sore point with me and I'll cease and desist, or else I'm just start to rant and rave and my BP will shoot skyward.

[DOF_power]

The thing is, that there never was a truly free market.

Bubble/bursts scenarios can be tracked hundreds of years back, and currency manipulation, inflation, budget deficits thousands of years back.
Every industry historically always had a bubble and when it burst something needed to be done.
And budget deficits/government overspending and measures to deal with it go back to the greek city states era.
And let's no forget the robber barons scenarios where the president/top man has to step in to bust the monopolies and reduce the abuses (authority corruption allowing abuses combined with poorly made laws).

[Bob Tanner]

Originally Posted by DOF_power

The thing is, that there never was a truly free market.

Bubble/bursts scenarios can be tracked hundreds of years back, and currency manipulation, inflation, budget deficits thousands of years back.
Every industry historically always had a bubble and when it burst something needed to be done. I agree but bubbles are a natural product of the supply & demand way of doing business. I still think government involvement isn't the way to fix market-related problems.

And budget deficits/government overspending and measures to deal with it go back to the greek city states era. My Greek history is a bit lacking but financial and budgetary problems certainly helped the downfall of the Roman Empire. It lead to the Empire splitting into two sections under...??? I forget which emperor but he preceded Constantine by a couple of reigns, I believe.
And let's no forget the[ robber barons scenarioswhere the president/top man has to step in to bust the monopolies and reduce the abuses (authority corruption allowing abuses combined with poorly made laws). For all their faults I think the "Robber Barons" (Gould, Vanderbuilt, Morgan, Carnegie, et.al.) get a bad rap by groups which suffer from wealth envy. True, there was corruption but it was the government (elected and appointed officials ) who took the bribes. Corruption is always a two-way street. Besides, can you imagine how much longer the westward expansion of this country would have taken if left up to ingenuity of the government? My guess is the golden spike driven at Promontory Summit to complete the transcontinental railroad would have been tapped down around 1900, instead of 1869

But then, keep in mind that my opinions are based on probably the most radical conservative ideals you have encountered. So, as they say in da' hood, go figure.

.

[DOF_power]

>
^ The supply and demand alone doesn't explain the bubble-burst situation.

I remember watch a TV show about the internet and communication bubbles.
One those involved explained this. He knew that most of the ".coms" where not viable, but to get their hands on stock of those (very) few good companies spreading the money all over was needed, as there was no crystal ball. Then the heard mentality kicked leading to insane speculation, many thinking they found an easy way to get rich, the bubble inflated and then it busted.

Agreed that corruption is a 2 way street; but without intervention from the president elected himself, there was no way to bust those monopolies as the robber barons had bought judges, politicians, police staff and had expensive lawyers.

And that's why I'm not a adept of any radical approach (and all radical approaches have failed) of any side of the specter, as none properly take into consideration (the very flawed) human nature (meaning corruption, heard mentality, naivety, and emotional instead of rational driven decisions).

Theories about the economy are fine in theory, but none has has worked properly in practice, not by a long shot, as the human flaws (of either big government and/or private investors, average people) have always defeated the rationality.

[Weird harold]

Originally Posted by Racer Duck

the problem with new industries is there's no new revolutionary technology like the computer to exploit. I suspect there's a lot going on in the cell phone area with technologies and "melding" it into our vehicles, homes and workplaces. And there will be some big players to come out of it, but as far as I can tell the next big "breakthrough" has yet to be identified... without that, I don't see any entrepreneurs jumping with glee at the prospects of billion dollar futures.

You may not like it. You may not believe in global warming, or that it is man made. You may even have a problem with government "creating" a need, instead of the free market, but there is no doubt that wind, solar, electric cars, and everything else green, is the next big thing.

Not saying it makes sense, or anything, just that it is happening.

[Bob Tanner]

Originally Posted by DOF_power

>

Theories about the economy are fine in theory, but none has has worked properly in practice, not by a long shot, as the human flaws (of either big government and/or private investors, average people) have always defeated the rationality.

And that just about sums it up. There is no constant because the market is controlled by humans. My position is that I believe in trusting the market system to operate on its own, with minimal outside influences.
Yes, you will have greed, corruption and exploitation but, given time, it will right itself without governmental interference and controls. The number of times the government has interfered and made a bad situation better is outweighed by the times they have interfered and made thing worse, either directly or by unintended consequences.