The Nikkei estimates that Japan passenger car production in fiscal 2009 will likely decrease to 1979 levels, mostly due to a plunge in exports. The projection, which was compiled based on automakersâ data and interviews with company officials, calls for the eight Japanese passenger car firms to assemble 8.21 million vehicles in the year ending in March 2010, 14% fewer than last year and the second consecutive annual decline, following a 15% fall in fiscal 2008. Toyota Motor Corp. and seven other Japanese passenger carmakers are being forced to lower production because exports, which absorbed 58% of their total domestic output in fiscal 2007, remain weak. While sales are picking up in some areas of Europe, thanks to government measures to encourage car owners to upgrade to new vehicles, demand in the mainstay US market continues to be soft. As a result, the companiesâ total exports in fiscal 2009 will likely plunge by 25.7% to 4.04 million units. http://www.greencarcongress.com/2009/05/japan-1979-20090525.html http://www.nni.nikkei.co.jp/e/ac/tnks/Nni20090525D25JFF03.htm
Japan is in a depression, literally. They claim Ireland's unemployment rate will soon reach 20% - it was 1% in 2006, and is 11% now.
and where should the spooz and other major international indices trade at? This is one of the best trades ...too much complacency...
If the numbers are accurate and Japanese auto production is really back to '79 levels, then I would expect the bad news out of Japan to slow and bottom very soon. I mean, how much further is it going to go? Back to '49 levels? This is why overly pessimistic shorts eventually get crushed. They always see more down side risk than upside risk, no matter how bad the news.
Does that take into account the huge increase in production from transplant factories, or are these strictly "shipped from Japan" numbers? Because in 1979, there weren't any transplant factories...
That assumes that unemployment doesn't get any worse, banks start loaning money out to credit-risky borrowers again, construction picks back up (a lot of pickup trucks were sold to contractors and tradespeople during the real estate boom - I swear the trades that worked me each had a pickup truck AND a Hummer), the global economy heals, and people quit hoarding their cash. I'm definitely NOT on the side that says we've seen the worst in unemployment - not even close. Place your bets while the wheel is spinning.