Healthcare and Financial sector headed for recession while high tech can boom
Fred Day
Oct. 1, 2007

Something interesting is happening in the economy. Sectors that have automated their operations without outsourcing are prospering. Look at the tech sector. After building solid bases it is going steadily. At the same time the Healthcare and Financial sectors are showing signs of real troubles.

The relative cost of employment to revenue earned from services and finished goods are increasing. The higher healthcare costs, marginal wage inflation and lower consumer discretionary cash are the culprits. The cost of outsourcing especially from service providing nations like India is also rising rapidly. In this environment the sectors that depend minimally on the number of employees, and have Web and other automated selling channels are booming. The software and high tech sectors have no problem. The problem lies with healthcare and even more with the financial sector.

You can expect massive unemployment in the healthcare sector, and in the financial institutions. The brokerages, the banks, the mortgage bankers and investment bankers are badly affected.

Healthcare and Financial sector headed for recession while high tech can boom
Fred Day
In this environment the sectors that depend minimally on the number of employees, and have Web and other automated selling channels are booming. The software and high tech sectors have no problem.
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Whenever you see that something is happening without any reasoning or people are acting just crazy without looking at the fundamentals, you can detect a bubble. Eventually bubbles burst and create a vacuum in that sector.
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