Monday, December 22, 2008

Toyota records first loss ever -- underscoring just how bad economic times are going to get

Today's stunning corporate news from Tokyo has left financial markets here reeling in a week when they were expected to drift mindlessly in a narrow range of light trading.

The report from Toyota simply underscores what President-elect Obama has been trying to tell us: things are going to get a lot worse economically here and around the world. And that is going to promote instability, domestically and abroad.

Now what Obama has to decide is if he needs to give away the fiscal bank in an economic stimilus plan that will alleviate some suffering in every American household but not fix an economy now destined for decline through 2010.

And the declining economic situation demands answers from each of us if we want to save our investment portfolios. If you're still in the stock market, you're putting your entire fortune at risk.

Here is what The New York Times reported this afternoon about Toyota:

On Monday, Toyota said it expected an operating loss in its auto operations of 150 billion yen, or $1.7 billion, for the fiscal year ending March 31. That would be the company’s first annual operating loss since 1938, a year after the company was founded, and a huge reversal from the 2.3 trillion yen, or $28 billion, in operating profit earned last year.

Analysts said Toyota’s downward revision, its second in two months, showed that the worst financial crisis since the Depression was threatening not just the Big Three but also even relatively healthy automakers in Japan, South Korea and Europe. Many other companies will also soon be reporting losses.

No comments: