Sun Chief Spooks Y2K Guru
Wired News Report
8:00 a.m. 9.Feb.99.PST Ed Yardeni, the Wall Street economist who most fears Y2K, is out with another gloomy forecast.
The Deutsche Bank chief economist said discussions at the World Economic Forum in Davos, Switzerland, last week "confirmed my number one concern about Y2K -- that it will seriously disrupt the global just-in-time manufacturing system, thus causing a severe worldwide recession."
Yardeni posted the comments on his Web site on Monday.
Yardeni has long prophesized the possibility that the millennium bug could lead to a sharp global economic decline, most recently setting the chances at 70 percent. His latest words came in reaction to comments Sun Microsystems chief Scott McNealy made at Davos.
McNealy "said that everyone in the room should buy the computers they need this year because his company might not be able to produce them in 2000," Yardeni wrote. "He assessed that his component suppliers in Asia are 'one to three years behind in fixing their Year 2000 Problem.'"
Yardeni conceded that McNealy is known for making provocative -- even outrageous -- comments. "Some Y2K skeptics have told me that they suspect Mr. McNealy may be simply drumming up more business," he wrote. But that, Yardeni said, "is ridiculous, in my opinion."
Hearing McNealy's assessment of Sun's suppliers, Yardeni was hardly sanguine about the prospects for other computer heavyweights.
If Sun can't produce computers in 2000, he wrote, "neither will Dell, Compaq, and IBM.... These stocks are among the leaders of the current bull market. They aren't cheap. They are likely to plunge if earnings expectations are dashed by Y2K disruptions."
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