Mish's Global Economic Trend Analysis

---

Million Engineers Struggling to Find a Job Posted: 22 Jun 2013 12:43 PM PDT It's tough to find a job everywhere: in the US, in China, in Europe, and in India. Think education is the answer? I don't. Economic Times reports a million engineers in India struggling to get placed in an extremely challenging market Somewhere between a fifth to a third of the million students graduating out of India's engineering colleges run the risk of being unemployed. Others will take jobs well below their technical qualifications in a market where there are few jobs for India's overflowing technical talent pool. Beset by a flood of institutes (offering a varying degree of education) and a shrinking market for their skills, India's engineers are struggling to subsist in an extremely challenging market. According to multiple estimates, India trains around 1.5 million engineers, which is more than the US and China combined. However, two key industries hiring these engineers -- information technology and manufacturing -- are actually hiring fewer people than before. For example, India's IT industry, a sponge for 50-75% of these engineers will hire 50,000 fewer people this year, according to Nasscom. Manufacturing, too, is facing a similar stasis, say HR consultants and skills evaluation firms. According to data from AICTE, the regulator for technical education in India, there were 1,511 engineering colleges across India, graduating over 550,000 students back in 2006-07. Fuelled by fast growth, especially in the $110 billion outsourcing market, a raft of new colleges sprung up -- since then, the number of colleges and graduates have doubled. Engineers Churned Out in Spades So what does India do with those excess engineers? Some end up in the US on work visas because the US citizens purportedly do not have the right skills. In reality, there are plenty of skills here, but foreign workers will work for a lot less. Since companies can hire a programmer from India or Russia for 1/3 the cost of a US worker, that's what happens. Training more engineers, here, or in China, or in India will not help. There is a glut of high-tech talent. On Tuesday, wrote Epic Glut of Graduates Depresses Wages; Fake Job Offers Taint Hiring Statistics. The article was about a glut of graduates in China with no job, but it could just as easily been about India or the US. This is what I said: How is [the situation in China] different than the average liberal arts major in the US expecting the world at their doorstep just because they have a useless degree that prepares them to do nothing more than work as a part-time retail clerk, 25 hours a week, dumped into the Obamacare system? Yet, we are told education is the answer, without ever addressing the questions "for who? at what cost? in what field?" These articles were purportedly about China. Change the names and faces and the stories are not much different than you can find right here in the US, in Italy, in France, or anywhere else in a slow-grow global economy. After growing at an astronomical rate for years, the cost of education is going to plunge. Job statistics will force that outcome. If education was the answer, there would not be millions of engineers looking for jobs. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com  Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Fairy Tale Investing: "Believing in Bernanke is like believing in Father Christmas" Posted: 21 Jun 2013 11:30 PM PDT Marc Faber, publisher of the Gloom, Boom and Doom Report, told Bloomberg Television's Trish Regan and Tom Keene on "Street Smart" today that believing in Ben Bernanke is like believing in Father Christmas. Faber  said, "If you say that if he means what he says, then you believe in Father Christmas… As I said already three years ago, we are going to go with the Fed to QE99." Faber said, "I think the market is on the high side, corporate profits are inflated and we could easily, from the recent high, May 22 at 1687 on the S&P, drop by 20% to 30%, easily." Link if video does not play Faber: S&P 500 Could Fall 20% to 30% Faber is correct. Of course I said the same thing two years ago, and so did Faber. Yes, believing in Bernanke is like believing in Santa (or the tooth fairy), but those believers have fared well to this point (at least from a cherry-picked starting point of March 2009). Will the believers all suddenly become disbelievers? Hardly. It's never happened before and will not happen this time either. People who rode the fairy tale up will ride it back down again. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610