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Technology Stocks : Discuss Year 2000 Issues

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To: Bill Ounce who wrote (2915)	12/10/1998 1:10:00 PM
From: Bill Ounce	Read Replies (1) of 9818

Millenium butterflies USATODAY usatoday.com [...] Millennium butterflies: Sharp eyes have identified this new species in the money market futures pits at the Chicago Mercantile Exchange. Jim Bianco of Bianco Research says the butterflies may be the first quantifiable sign of Y2K fear in a major financial market. He's watching to see how far they spread. "They are the leading edge of Y2K panic in the financial markets," he says. What does a millenium butterfly look like? Alexander Manzara, a Commerz Futures broker in Chicago, identified one Wednesday afternoon. You see their outline by comparing three consecutive three-month contracts spanning the date change on LIBOR, the London inter-bank offered rate of interest on dollar loans. The rates Wednesday were 4.72%, 5.12% and 4.80%. One wing of the butterfly was the 4.72% September 1999 contract. The body was the 5.12% December contract and the other wing was the 4.80% March 2000 contract. The December contract rate is so far out of line with the contracts on either side that it means something is wrong. It covers Dec. 16, 1999, to March 16, 2000. "This implies that banks are not anxious to be lenders over the period covering the millenium turn," Manzara says. "There is fear in the system of not receiving your cash flows." [...]

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