I don't know where all the financial engineers are employed but at the top of my head, i would think of the rating agencies, SP, Moody, Fitch where we can see some change. Who would really trust the AAA ratings from those agencies anymore. They probably would not get away with their Excel/Matlab model to rate deals anymore. With the increased pressure for more transparent in how rating, risk is measured, I'm really not sure if it would call for more FE or less.
One field I can see an acute need for FE : algo trading (or any kind of trading for that matter).
I agree with the second point : as the number of MFE programs rapidly increases, we will reach a point where a number graduates will be unemployed no matter how much they pay. Or we have reached that point already ?
What this means is programs will have to work harder to place its students. Students will have to fight harder to get into a few top programs. By then, top programs wouldn't mean well known, Ivy programs, but those who have established a good reputation and network among recruiters, managers.
As if it hasn't happened, I think in the future, we will hear more stories about graduates from certain programs that are not able to find employment.
What we will try to do on Quantnet is to separate truth from myths among MFE programs and hope that the filter process itself will get rid of those who don't belong.
