You Say Toyota, I Say Toyoda

Akio Toyoda, grandson of the founder of Toyota Motor Corp. (TM), has officially been handed the reins of his family's auto empire after a 25-year apprenticeship, Reuters reports in an in-depth look at the issues facing Toyota as it tries to find its footing amid the global recession. The move has long been anticipated—and has been previously explored at length by the New York Times and Wall Street Journal in articles published in the past six month—but upon the handoff actually taking place, analysts interviewed by Reuters expressed doubts about 53-year-old Toyoda's ability to make any real difference.

"A drastic reform at Toyota would involve cutting back its domestic production base," Kurt Sanger, a Tokyo-based auto analyst at Deutsche Securities tells Reuters. The company builds about half of its vehicles in Japan, "which works against it with the dollar squarely below 100 yen," he says. In addition, Toyoda's promise to get back to basics and the company's overall unwillingness to make drastic changes will prevent it from experiencing a V-shaped recovery, which would otherwise be possible. The company is expecting last year's losses, its first-ever loss in its 80-or-so-year history, to "balloon to about $8.8 billion in the year to March 2010," though experts say it will probably be half that.

Leading the WSJ's front page is a look at the drastic slide in stocks and industrial commodities yesterday, as "investors are showing doubts about the prospects for global growth." Simply put, fundamentals, such as the housing industry and joblessness (which have improved but are still not looking great), didn't support the paper gains, and "a growing number of investors decided to take some money off the table." Fueling the sell-off, according to CNNMoney, was the World Bank's modification to its 2009 forecast, which now predicts "global growth will shrink by 2.9 percent versus its earlier forecast for a 1.7 percent contraction." What's more, "global trade is expected to plummet 9.7 percent this year."

Until now, the market had experienced three solid months of gains—"in the three months through June 12, the Dow industrials had soared 34 percent," according to the WSJ—which had infused consumers, not to mention investors, with renewed hope. The Dow Jones Industrial Average yesterday fell 200.72 points to 8339.01. The day's loss equated to 2.35 percent but to a total of 5 percent when taking into account the past six trading sessions. "Monday's performance represents the Dow's sharpest point and percentage drop since April 20 and its lowest close in almost a month," the Journal says. The S&P 500 fell 3.06 percent to 893.04 for a 1 percent loss for the year so far. "The S&P 500 has now lost 6.6 percent off the highs from 2 weeks ago," CNNMoney points out. An analyst interviewed by the site says he thinks "the broad index could end up pulling back a total of 10 percent to 15 percent before the sell-off runs its course."

Topping the NYT's business coverage is word that Stanley Chais, a California money manager and one of Bernard Madoff's earliest investors, had been charged in a civil suit filed by the Securities and Exchange Commission for helping Madoff perpetuate his massive fraud. The lawsuit was just one of three filed yesterday, offering insight into the "who, what, why and how" of a scheme that fleeced investors of some $65 billion. "The second civil fraud case, also filed by the SEC, contended that three senior executives at the Cohmad Securities Corporation, a small brokerage firm co-founded by Madoff, knowingly helped finance the Ponzi scheme and conceal it from regulators for years. The third suit, filed in federal bankruptcy court by the trustee seeking assets for Madoff victims, also named Cohmad and its three senior executives, along with more than a dozen of its current or former employees," the paper writes. In each case, the defendants deny knowing anything of the scheme and claim that like the other victims, they, too, lost a handful (and pocketful and wallet-full) of money. The WSJ supplements its coverage of the suits with a 10-minute video titled "Inside the Madoff Scandal: Chapter One."

CNNMoney turns its eye on the criminal charges Madoff is facing, reporting that in less than a week the 71-year-old is scheduled to be sentenced by Judge Denny Chin of the U.S. District Court in New York, and asks, rather rhetorically, if Madoff will die in jail.  According to the article, the maximum sentence is 150 years in a federal prison. In recent months, Madoff's victims have pleaded with the judge in letters to put Madoff behind bars for the rest of his life, and legal experts interviewed by CNNMoney say that is likely. "Generally, pending sentences carry a minimum-to-maximum range. But in Madoff's case, the list of legal offenses is so severe that there is no mandatory minimum sentence listed in legal documents filed by the Justice Department," the site says, adding that "through his crimes, Madoff tallied up an ‘offense level' of 54, far exceeding the requirements for a life sentence."

Finally, Bloomberg reports that Ben Bernanke, chairman of the Federal Reserve, will be put on the hot seat as he seeks reappointment to the agency that could possibly become an even larger governing force in coming years. His term is set to expire Jan. 31. So far, President Obama has not said anything about reappointing Bernanke. And Treasury Secretary Timothy Geithner, "in reference to a possible candidacy for Obama economic official Lawrence Summers, told a lawmaker last week it wasn't ‘appropriate' to pledge that top advisers weren't in the running for the job." In Bloomberg's analysis, taking into account input from experts, "odds favor the former Princeton University economist." Bernanke has doubled the central bank's balance sheet to $2.1 trillion and helped "thaw credit markets and put the economy on a path toward recovery."

However, "the vultures are circling," David Jones, a former Fed economist and president of DMJ Advisors LLC in Denver, tells the site. "Bernanke is ‘going to be on the defensive,' even after ‘turning confidence around' since the depths of the crisis, he predicted." Other contenders include Summers or Janet Yellen, "both among the most prominent Democratic economists and veterans of the Clinton administration."