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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: C.K. Houston who wrote (1251)	3/22/1998 10:44:00 PM
From: Quad Sevens	Read Replies (1) \| Respond to of 9818

Cheryl: At this point, I don't see big market trouble based on y2k renovation costs. The y2k expense for the U.S., something in the 200 to 300 billion dollar range, has been published for some time--from Gartner to Merrill-Lynch to J.P. Morgan--and is now taken seriously by all corners of Wall Street. We can look at Chase, we can look at Citicorp, B of A, Amoco, etc. .... They are all telling the same story (right now): less than 4% of pre-tax profits per year. That's not a big hit--and a significant chunk of it is being taken out of existing IT budgets, rendering the (apparent) impact on the bottom line pretty small--especially compared with Asia and other market variables. Perhaps Y2k prices will rise and that will cause these estimates to go up, but this is hard to predict (all of the experts have been wrong so far about how the y2k renovation scenario would unfold). Big market trouble will hit when Wall Street realizes that we can't finish the y2k fixes on time. That will be the first phase. (Is it starting? We already have the GAO report, etc. ...) The next phase will be when the Street understands the consequences of not finishing on time. Wade