U.S. economic woes just a distraction, the real crisis is in Europe

By David Olive Business Columnist

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Among the leading economic indicators to watch right now is the number of police officers deployed today to prevent a fourth straight night of rioting in London. That number is 16,000. The turmoil beginning last Saturday already has yielded one of the year’s iconic images – a woman engulfed in flames leaping from a blazing building in which she is trapped. That was just one of more than 60 fires set by rioters in London alone.
North American stock markets shed about $1 trillion in value Monday in the worst one-day session since 2008. But market losses of the past few weeks have been a mild and overdue correction to irrational exuberance, which by last May had the markets within hailing distance of the all-time 2007 high.
The markets have now fallen more than 10 per cent below their May high. Technically that marks the onset of a bear market. But in the depths of the global financial meltdown of 2008-09, the markets plunged about 40 per cent. Which is why bargain-hunters emerged on the markets by Tuesday.
The earlier market buoyancy wasn’t supported by fundamentals, given the continued anemic recovery in North American GDP and job creation. The downgrading of U.S. debt Friday by credit-rating agency Standard & Poor’s – which set off the markets’ panic selling Monday – was itself an exaggerated reaction to the admittedly prolonged and acrimonious negotiations to lift America’s debt ceiling.
A much fretted-over default by the U.S. was never in prospect, though it’s still commonly warned of by people who should know better. Tax and other revenues flowing into the U.S. Treasury this month are sufficient to cover America’s debt obligations falling due in August about six times over, absent any change in the debt ceiling.
True, the U.S. may be flirting with a double-dip recession. Then again, a stronger second-half performance may avert that outcome. In any case, after 17 consecutive months of job growth as of July, the U.S. is not the basket case suggested by downcast markets of past weeks.
Yet if the recent antics in Washington were second-rate vaudeville, the debt crises across Europe are real.
Distracted as we were by the painful side-effects of America’s unprecedented housing bubble of the 2000s, we’ve paid little heed to similar insanity in Britain, Spain, Ireland and Iceland during that period, when shakily financed new housing construction went on a U.S.-style tear.
Now Europe’s day of reckoning has arrived.
“The crisis in Europe is quickly becoming on par with the [global] financial crisis of 2008,” David Levy, portfolio manager at Kenjol Capital Management, told CNN Money this week. “The [latest U.S.] jobs report shows that things aren’t getting much worse in the U.S., but the focus is clearly on Europe.”
That’s a reassuring outlook for Canada, far less reliant on the $16-trillion (U.S.) European market than exports to the slightly smaller U.S. economy. “We can continue to see a slow rebound in the economy,” said an upbeat Prime Minister Stephen Harper, in Brazil this week for trade talks.
There even are a couple dividends for Canada here. One is that the central bankers of Canada and the U.S. have each signaled they will effectively freeze interest rates at least until next spring. That rules out a long-rumoured increase in borrowing costs by the Bank of Canada.
And there’s talk of a reverse brain drain. With many forecasters plotting a flat line for U.S. GDP growth over the next few years, and with much of Europe fiscally in extremis, the world’s best talent has that much more reason to choose Canada in seeking work abroad.
Close-hand observers don’t yet know what to make of the tens of millions of pounds’ worth of what British PM David Cameron calls “sickening” damage to vandalized buildings and vehicles in London, Manchester, Birmingham, Liverpool and other British cities.
Is this Britain’s version of an Arab Spring, driven largely by university graduates without a job for several years? College students and graduates are indeed prominent among those detained by British police, who’ve taken a dim view of BlackBerry use by social-networkers in organizing coordinated protests.
Or is it just spoiled brats venting? BlackBerry is an oddly high-end tool of choice for rioters. “They’re not homeless, these blokes,” said a cabbie calling in to a BBC news show last night. “They’ve run out of bling, is all.”
Anti-austerity protesters have already been taking to the streets of Athens and Madrid for months. Yet the powers that be in European capitals, at the European Central Bank and the International Monetary Fund are moving at a glacial pace in devising a way out the continent’s fiscal crisis.
Which suggests that social unrest in Europe will intensify before it subsides.

Impact of recession in American economy on India

Past recessions

The US economy has suffered 10 recessions since the end of World War II. The Great Depression in the United was an economic slowdown, from 1930 to 1939. It was a decade of high unemployment, low profits, low prices of goods, and high poverty.

The trade market was brought to a standstill, which consequently affected the world markets in the 1930s. Industries that suffered the most included agriculture, mining, and logging.

In 1937, the American economy unexpectedly fell, lasting through most of 1938. Production declined sharply, as did profits and employment. Unemployment jumped from 14.3 per cent in 1937 to 19.0 per cent in 1938.

The US saw a recession during 1982-83 due to a tight monetary policy to control inflation and sharp correction to overproduction of the previous decade. This was followed by Black Monday in October 1987, when a stock market collapse saw the Dow Jones Industrial Average plunge by 22.6 per cent affecting the lives of millions of Americans.

The early 1990s saw a collapse of junk bonds and a financial crisis.

The US saw one of its biggest recessions in 2001, ending ten years of growth, the longest expansion on record.

From March to November 2001, employment dropped by almost 1.7 million. In the 1990-91 recession, the GDP fell 1.5 per cent from its peak in the second quarter of 1990. The 2001 recession saw a 0.6 per cent decline from the peak in the fourth quarter of 2000.

The dot-com burst hit the US economy and many developing countries as well. The economy also suffered after the 9/11 attacks. In 2001, investors' wealth dwindled as technology stock prices crashed.

Impact of an American Recession on India

Indian companies have major outsourcing deals from the US. India's exports to the US have also grown substantially over the years. The India economy is likely to lose between 1 to 2 percentage points in GDP growth in the next fiscal year. Indian companies with big tickets deals in the US would see their profit margins shrinking.

The worries for exporters will grow as rupee strengthens further against the dollar. But experts note that the long-term prospects for India are stable. A weak dollar could bring more foreign money to Indian markets. Oil may get cheaper brining down inflation. A recession could bring down oil prices to $70.

The whole of Asia would be hit by a recession as it depends on the US economy. Even though domestic demand and diversification of trade in the Asian region will partly counter any drop in the US demand, one simply can't escape a downturn in the world's largest economy. The US economy accounts for 30 per cent of the world's GDP.

Says Sudip Bandyopadhyay, director and CEO, Reliance Money: "In the globalised world, complete decoupling is impossible. But India may remain relatively less affected by adverse global events." In fact, many small and medium companies have already started developing trade ties with China and European countries to ward off big losses.

Manish Sonthalia, head, equity, Motilal Oswal Securities, says if the US economy contracts much more than anticipated, the whole world's GDP growth-which is estimated at 3.7 per cent by the IMF-will contract, and India would be no exception.

The only silver lining is that the recession will happen slowly, probably in six months or so. As of now, IT and IT-enabled services, textiles, jewellery, handicrafts and leather segments will suffer losses because of their trade link. Certain sections of commodities could face sharp impact due to the volatile nature of these sectors. C.J. George, managing director, Geojit Financial Services, says profits of lots of re-export firms may be affected. Countries like China import commodities from India, do some value-addition and then export them to the US.

The good side of US recession

US recession may be a boon for Indian offshore software companies. Infact, even as America is moving into recession, Indian offshore companies are getting more business than ever before.
The impact of recession is undoubtedly higher to small and medium sized enterprises whose bottom lines get squeezed due to lack of spending by consumers. These thousands of small and medium enterprises are increasingly waking up to cash in on the outsourcing wave, a market opportunity explored by their big daddies for a couple of decades now.

BEST JOBS IN AMERICA Money/Payscale list of great careers.

Top 50
Money and pay scale rate the top 50 careers with great pay and growth prospects.

Rank	Job title	Job growth (10-year forecast)
1	Software Architect	34%
2	Physician Assistant	39%
3	Management Consultant	24%
4	Physical Therapist	30%
5	Environmental Engineer	31%
6	Civil Engineer	24%
7	Database Administrator	20%
8	Sales Director	15%
9	Certified Public Accountant	22%
10	Biomedical Engineer	72%
11	Actuary	21%
12	Dentist	15%
13	Nurse Anesthetist	13%
14	Risk Management Manager	24%
15	Product Management Director	12%
16	Healthcare Consultant	24%
17	Information Systems Security Engineer	23%
18	Software Engineering / Development Director	17%
19	Occupational Therapist	26%
20	Information Technology Manager	17%
21	Telecommunications Network Engineer	53%
22	Environmental Health & Safety Specialist	28%
23	Construction Project Manager	17%
24	Network Operations Project Manager	23%
25	Emergency Room Physician	22%
26	Information Technology Business Analyst	20%
27	Director of Nursing	16%
28	Information Technology Consultant	17%
29	Psychiatrist	24%
30	Test Software Development Engineer	20%
31	Information Technology Network Engineer	23%
32	Senior Sales Executive	15%
33	Information Technology Program Manager	17%
34	Primary Care Physician	22%
35	Computer and Information Scientist	24%
36	Hospital Administrator	16%
37	Programmer Analyst	20%
38	Applications Engineer	34%
39	Research & Development Manager	15%
40	Regional Sales Manager	15%
41	Project Engineer	24%
42	Training Development Director	23%
43	Human Resources Consultant	21%
44	Speech-Language Pathologist	19%
45	Business Development Analyst	24%
46	Physical Therapy Director	16%
47	Structural Engineer	24%
48	Nursing Home Director	16%
49	Systems Engineer	13%
50	Healthcare Services Program Director	13%

From the November 2010 issue

How To Tie a Tie for BEGINNERS

How to Dress for an Engineering Job

Wearing the right clothes on the job is important to success and advancement. The general rule is to dress according to the written or unwritten dress code of the engineering company. Many firms even include dress guidelines in job listings. The trick is figuring out the subtle stuff, especially if there is nothing in writing!

Instructions

1. • 1
     Ask the Director of Human Resources if there is a formal dress code. If so, read through it carefully.
   • 2
     Whether there is a written dress code or not, look around at other people working in the engineering firm. Most firms allow what is known as "business casual" clothing, though some will be dressed in suits (and ties for the men). Make notes of what you see, such as the kind of slacks women wear, types of blouses or knit tops, and whether men seem to favor collared golf-style shirts or cotton button-downs.
   • 3
     Sit in front of your closet and bureau with the dress code, or notes of what you have observed in the office. Organize clothing that will fit in with the style in the firm.
   • 4
     Make sure there are at least two formal business outfits in the closet for special meetings, especially with firm partners and client meetings out of the office. Take a cue from what the partners wear.
   • 5
     Check your hairstyle. Long hair on men is usually acceptable if it is well groomed. Women should avoid extreme styles or unusual hair colors (lose the hot pink streak)!
   • 6
     Double check before going to work. Make sure clothes are clean and pressed and look professional, even if they are casual. Ladies: leave the low-cut and tight stuff at home and make sure the heels are not too high. You should be able to stride down the hall or visit a job site. Guys: keep tie and suit combinations to the classics (striped tie and white shirt) if you are not sure. Of course, remember socks should match!

Things You'll Need

• Business casual clothing
• 2 formal business outfits
• Shoes (such as loafers, brogues--but not sneakers)!

Tips & Warnings

• Dressing for the job interview is not the same as dressing for the job! Most engineering schools tell their students to put on a suit for an interview. Wait until the interviewer tells you to lose the tie or take off the jacket.
• Classic styles are never wrong. A cotton button-down shirt with a subtle stripe, paired with khaki slacks and loafers, is perfect business casual for men. A well-tailored blouse and dark slacks with mid-height pumps are perfect for women.
• Color is good. Business casual does not mean it has to be black and white. A pink shirt or a red blouse works great!
• Unless others wear them (and no one comments), leave the jeans at home.

 

Science News!!!Your Brain On Androids!!!

ScienceDaily (July 15, 2011) — Ever get the heebie-jeebies at a wax museum? Feel uneasy with an anthropomorphic robot? What about playing a video game or watching an animated movie, where the human characters are pretty realistic but just not quite right and maybe a bit creepy? If yes, then you've probably been a visitor to what's called the "uncanny valley."
The phenomenon has been described anecdotally for years, but how and why this happens is still a subject of debate in robotics, computer graphics and neuroscience. Now an international team of researchers, led by Ayse Pinar Saygin of the University of California, San Diego, has taken a peek inside the brains of people viewing videos of an uncanny android (compared to videos of a human and a robot-looking robot).

Published in the Oxford University Press journal Social Cognitive and Affective Neuroscience, the functional MRI study suggests that what may be going on is due to a perceptual mismatch between appearance and motion.
The term "uncanny valley" refers to an artificial agent's drop in likeability when it becomes too humanlike. People respond positively to an agent that shares some characteristics with humans -- think dolls, cartoon animals, R2D2. As the agent becomes more human-like, it becomes more likeable. But at some point that upward trajectory stops and instead the agent is perceived as strange and disconcerting. Many viewers, for example, find the characters in the animated film "Polar Express" to be off-putting. And most modern androids, including the Japanese Repliee Q2 used in the study here, are also thought to fall into the uncanny valley.
Saygin and her colleagues set out to discover if what they call the "action perception system" in the human brain is tuned more to human appearance or human motion, with the general goal, they write, "of identifying the functional properties of brain systems that allow us to understand others' body movements and actions."
They tested 20 subjects aged 20 to 36 who had no experience working with robots and hadn't spent time in Japan, where there's potentially more cultural exposure to and acceptance of androids, or even had friends or family from Japan.
The subjects were shown 12 videos of Repliee Q2 performing such ordinary actions as waving, nodding, taking a drink of water and picking up a piece of paper from a table. They were also shown videos of the same actions performed by the human on whom the android was modeled and by a stripped version of the android -- skinned to its underlying metal joints and wiring, revealing its mechanics until it could no longer be mistaken for a human. That is, they set up three conditions: a human with biological appearance and movement; a robot with mechanical appearance and mechanical motion; and a human-seeming agent with the exact same mechanical movement as the robot.
At the start of the experiment, the subjects were shown each of the videos outside the fMRI scanner and were informed about which was a robot and which human.
The biggest difference in brain response the researchers noticed was during the android condition -- in the parietal cortex, on both sides of the brain, specifically in the areas that connect the part of the brain's visual cortex that processes bodily movements with the section of the motor cortex thought to contain mirror neurons (neurons also known as "monkey-see, monkey-do neurons" or "empathy neurons").
According to their interpretation of the fMRI results, the researchers say they saw, in essence, evidence of mismatch. The brain "lit up" when the human-like appearance of the android and its robotic motion "didn't compute."
"The brain doesn't seem tuned to care about either biological appearance or biological motion per se," said Saygin, an assistant professor of cognitive science at UC San Diego and alumna of the same department. "What it seems to be doing is looking for its expectations to be met -- for appearance and motion to be congruent."
In other words, if it looks human and moves likes a human, we are OK with that. If it looks like a robot and acts like a robot, we are OK with that, too; our brains have no difficulty processing the information. The trouble arises when -- contrary to a lifetime of expectations -- appearance and motion are at odds.
"As human-like artificial agents become more commonplace, perhaps our perceptual systems will be re-tuned to accommodate these new social partners," the researchers write. "Or perhaps, we will decide it is not a good idea to make them so closely in our image after all."
Saygin thinks it's "not so crazy to suggest we brain-test-drive robots or animated characters before spending millions of dollars on their development."
It's not too practical, though, to do these test-drives in expensive and hard-to-come-by fMRI scanners. So Saygin and her students are currently on the hunt for an analogous EEG signal. EEG technology is cheap enough that the electrode caps are being developed for home use.
The research was funded by the Kavli Institute for Brain and Mind at UC San Diego. Saygin was additionally supported by the California Institute of Telecommunication and Information Technology (Calit2) at UCSD.
Saygin's coauthors are Thierry Chaminade of Mediterranean Institute for Cognitive Neuroscience, France; Hiroshi Ishiguro of Osaka University and ATR, Japan; Jon Driver of University College London; and Chris Firth of University of Aarhus, Denmark.