consequnces of US recession on india job market

[konqueror_vivek]

Originally Posted by aksbond4u

If the US, in response to a slowdown, cuts interest rate drastically, that will widen the differential between Indian and US interest rates. This will have consequences through higher capital flows and rupee appreciation.thus margin of indian exports to US decreases. so naturally there wud be cost cutting and inclination towards higher efficiency. it is natural that if US sneezes then there are strong chances for india to get cold.
but slowdown in US wud force US companies to outsource their work more to countries like india thereby offsetting its some effect.

If US economy slows down, why would they outsource the work, to a country like India, it will be relatively costlier for them, the outsourcing expense will increase. I believe outsourcing will reduce if imbalance continues.

[abhi.sys]

Originally Posted by konqueror_vivek

Yes, US economy will slowdown, growth rate being projected ~ 1% (Goldman Sachs), compared to India (8.9%) for FY'08. Moreover, if dollar depreciates further compared to south asian currencies, definitely it will be negative cues for IT, Textile, Offshore (KPO's and BPO's).
I believe, in second half of 2008, we might see US banks to show better results. Also, if RBI comes forward to save dollar depreciation, against Rupee, the current scenario could change. At this point of time, given the crunch situation, it is expected that there will be serious cost cutting in various sectors.

hey bro if u online...can u please throw some light on...sub prime crisis...like wat is it...coz i dont anything abt it...2) y does rupee apreciates and impact of it on dollar....thanks in advance..

[aksbond4u]

returns from indian market are still high. although ruppee appreciation have decreased their profits from outsourcing to india, yet india is still leaader in providing all kinds of servicing at higf efficiency and low cost. slowdown in US economy would further force their company to cut it down their running cost which could be done by both outsourcing and offshoring their operations more to southeast asian countries including india..it may prove slightly costly at first but in long term its for their own good.

[aksbond4u]

pumping of dollers in indian economy cause ruppee to appreciates. although its a good sign for healthy economy and importers but not for exporters. currently unlike american and west eurpean countries where they have somewhat stagnant economies, our one is dynamic and returns are higher both in long and short terms causes companies of those countries especially to invest more money in fast developing coutries like india and china.

[konqueror_vivek]

Originally Posted by abhi.sys

hey bro if u online...can u please throw some light on...sub prime crisis...like wat is it...coz i dont anything abt it...2) y does rupee apreciates and impact of it on dollar....thanks in advance..

This is a good read for subprime crises
Subprime mortgage crisis - Wikipedia, the free encyclopedia
Various banks reported big losses last ended quarter, to give you some idea how big it is, as of now Washington Mutual Inc (one of the biggest Insurance names in the US) has $57 billion ARMs option portfolio, Wachovia Bank (one of the 5 biggest banks in US) has ARM option portfolio of $117.8 billion, Contrywide Financial (now a subsidiary of Bank of America) has an exposure of $28.8 billion. Even 10% losses from these, going forward will be drastic of these big financial institutions.
There is an old Chinese proverb - When difficulties come they never come alone!

[rohanrun]

Falling interest rates in US - Does it mean that banks will pay less interest on deposits kept in them?

If yes, then it will surely prompt depositors to withdraw money and put them in places where there are better returns. The implications on banks will be that they'll be short of cash. (Just didn't able to grasp this funda )


Why US will still outsource?
Current exchange rate 1US $ ~ 39 IND Rupees. Hence, even if Rupee appreciates it still will remain beneficial to US companies as long as both curriencies doesn't equls and also the cost of additional infrastructure for offshoring along with offshoring doesn't overshoot the operational cost in US itself.

How is Purchasing Power Parity calculated, Is exchange rates derived from PPP?

[Cymba]

Originally Posted by rohanrun

Falling interest rates in US - Does it mean that banks will pay less interest on deposits kept in them?

If yes, then it will surely prompt depositors to withdraw money and put them in places where there are better returns. The implications on banks will be that they'll be short of cash. (Just didn't able to grasp this funda )

in layman's terms
When interest rates falls, there wud be incentive to spend more and save less. Consumer spending fuels growth (not only for US, but the othr countries as well

[newbiedelhi]

Originally Posted by rohanrun

Falling interest rates in US - Does it mean that banks will pay less interest on deposits kept in them?

If yes, then it will surely prompt depositors to withdraw money and put them in places where there are better returns. The implications on banks will be that they'll be short of cash. (Just didn't able to grasp this funda )


Why US will still outsource?
Current exchange rate 1US $ ~ 39 IND Rupees. Hence, even if Rupee appreciates it still will remain beneficial to US companies as long as both curriencies doesn't equls and also the cost of additional infrastructure for offshoring along with offshoring doesn't overshoot the operational cost in US itself.

How is Purchasing Power Parity calculated, Is exchange rates derived from PPP?

i think 1 $= less than 30 in a decade

[knnaik]

Originally Posted by newbiedelhi

hI

can anybody enlighten be the aftermath on india job amrket in the specific sectors if US goes into recession in next 1-2 yrs? will there be job cuts ?

!) kpo
2) IT
3) Banking

In fact it may result in more jobs coming to India since they may resort to cost cutting and transfer some existing jobs to lower cost regions like India.

[coolsteps]

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can anybody tel me the likely group discussion topics????