Cheryl--A follow up to the Yardeni statement from Davos courtesy of csy2k. Darn those pesky global linkages!
This has just dropped on the South African Press Association's wire
service:
MILLENNIUM BUG 'COULD END WALL STREET BULL RUN'
By JEREMY WARNER in DAVOS, SWITZERLAND
The millennium bug could prove to be the shock that ends Wall Street's
12-year bull market, a senior US economist warned yesterday (Monday).
Edward Yardeni, chief economist of Deutsche Bank Securities in the US,
told participants at the World Economic Forum in Davos, Switzerland,
that a build-up of negative news on the year 2000 problem might cause
stock markets to dive.
Separately, Scott McNealy, chief executive of Sun Microsystems, said
that Asian companies making PCs and computer components lagged the US
and Europe by several years in dealing with the bug.
Advising consumers to ''buy lots of computers in the second half of this
year,'' he warned of severe supply problems after the turn of the
century.
''We believe Asia is way, way behind,'' Mr McNealy said at the WEF
annual meeting. ''Intel, Sun and Hewlett Packard have done quite similar
surveys of their supply base in Asia and they confirm the region is
significantly behind in dealing with the problem.''
However, the effects of the bug were played down by Bill Gates, head of
Microsoft, who said he thought the problem had been much exaggerated by
the press. There were bound to be some problems, he conceded, but he did
not foresee a general systemic breakdown.
Mr Yardeni predicted a build-up of bad news on the bug from June onwards
as companies began to make their SEC filings on whether they were
millennium bug compliant.
''There are already 34 millennium bug lawsuits outstanding in the US and
we'll see a lot more of that,'' he said.
Mr Yardeni said he thought the present euphoria in Internet stocks was
symptomatic of ''one of the greatest speculative bubbles on Wall Street
of all time''.
''If the stock market dives, which I think it will do in the second half
of this year, then it will take the US consumer and economy with it,''
he warned.
''I don't know when exactly it will top, but I have no problem at all
with lightening up and taking profits right now,'' he added.
A number of executives from the computer and Internet industries said
that they thought the frenzy in Internet stocks was casting a cloud over
legitimate high-growth companies.
//copyright 1999 The Independent, London |
