Central Perk: 22 iun. 2013

sâmbătă, 22 iunie 2013

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

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

Time for Congress to Pass Commonsense Immigration Reform

Featured

Time for Congress to Pass Commonsense Immigration Reform

President Obama discusses the bipartisan legislation in the United States Senate that would take important steps towards fixing our broken immigration system, while growing our economy and reducing the deficit.

Watch this week's Weekly Address.

Top Stories

Watch the West Wing Week here.

Indiana Fever: The 2012 WNBA champion Indiana Fever was in Washington, D.C., on Friday to visit the White House. President Obama congratulated the team on their winning season and thanked them for their service to communities across the country.

Father’s Day: President Obama celebrated an early Father’s Day last Friday with high school students from Chicago’s Becoming a Man program. During a lunch in the East Room of the White House, the President spoke of the importance of fatherhood and mentorship. President Obama met with students in the program, which is based in low-income public schools, earlier this year to reaffirm the importance of education.

Moving Toward Peace: After crossing the Atlantic Ocean Sunday night, President Obama spoke to the people of Northern Ireland from the Belfast waterfront on Monday, praising them for their efforts toward peace and encouraging them to continue to persist.

“From the start, no one was naïve enough to believe that peace would be anything but a long journey. Yeats once wrote ‘Peace comes dropping slow.’ But that doesn’t mean our efforts to forge a real and lasting peace should come dropping slow. This work is as urgent now as it has ever been, because there’s more to lose now than there has ever been.”

Trade Agreement: President Obama met with leaders from the European Union on Tuesday to discuss the Transatlantic Trade and Investment Partnership. Together with U.K. Prime Minister David Cameron, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy, President Obama announced that the EU and the U.S. will begin negotiations on the trade agreement next month. The agreement will increase economic growth in the United States and the European Union.

“[T]he U.S.-EU relationship is the largest in the world. It makes up nearly half of global GDP. We trade about $1 trillion in goods and services each year. We invest nearly $4 trillion in each other’s economies. And all that supports around 13 million jobs on both sides of the Atlantic. And this potentially groundbreaking partnership would deepen those ties. It would increase exports, decrease barriers to trade and investment. As part of broader growth strategies in both our economies, it would support hundreds of thousands of jobs on both sides of the ocean.”

G-8 Summit: On Tuesday, President Obama joined leaders from all over the world in Lough Erne, Northern Ireland for this year’s G-8 Summit. During plenary sessions, the President and the other G-8 leaders discussed the global economy and President Obama announced increased humanitarian assistance for Syria. The President also held meetings with President Vladmir Putin of Russia, Prime Minister David Cameron of the United Kingdom, Chancellor Angela Merkel of Germany, President François Hollande of France, Prime Minister Enrico Letta of Italy and Prime Minister Ali Zeidan of Libya.

German Ties: The people of Berlin gathered on the east side of the Brandenburg Gate on Wednesday, almost 50 years after President Kennedy spoke to the Cold War-divided city, to hear President Obama speak about the strong bond between Germany and the United States.

In his speech, President Obama announced new measurements to reduce our deployed strategic nuclear weapons by up to one-third. He also praised the Germans for their progress since the fall of the Berlin Wall, he acknowledged that the struggle for freedom, security, and human dignity still persists.

“When Europe and America lead with our hopes instead of our fears, we do things that no other nations can do, no other nations will do. So we have to lift up our eyes today and consider the day of peace with justice that our generation wants for this world.”

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Seth's Blog : The lab or the factory

The lab or the factory

You work at one, or the other.

At the lab, the pressure is to keep searching for a breakthrough, a new way to do things. And it's accepted that the cost of this insight is failure, finding out what doesn't work on your way to figuring out what does. The lab doesn't worry so much about exploiting all the value of what it produces--they're too busy working on the next thing.

To work in the lab is to embrace the idea that what you're working on might not work. Not to merely tolerate this feeling, but to seek it out.

The factory, on the other hand, prizes reliability and productivity. The factory wants no surprises, it wants what it did yesterday, but faster and cheaper.

Some charities are labs, in search of the new thing, while others are factories, grinding out what's needed today. AT&T is a billing factory, in search of lower costs, while Bell Labs was the classic lab, in search of the insight that could change everything.

Hard, really hard, to do both simultaneously. Anyone who says failure is not an option has also ruled out innovation.