Recent Yardeni from Yourdon site:
'Ed Yardini Getting Soft? Not A Chance!!!
asked in the TimeBomb 2000 (Y2000) Q&A Forum
Sorry for the length. I had to pull this copy off a pdf file. There is no
direct link. The following is taken from a transript of the CSIS
conference:
Y2K RISK ASSESSMENT TASK FORCE PUBLIC FORUM
TUESDAY, OCTOBER 6
SPEAKERS: SENATOR SAM NUNN, former U.S. Senator,
Chairman, CSIS Y2K Risk Assessment Task Force ROBERT
BENNETT, Senator (R-UT), Chairman, Special Committee on Year
2000 Technology Problem MARIA LIVANOS CATTAUI, Secretary
General, International Chamber of Commerce SHINICHI HOSONO,
First Secretary, Economic Section, Embassy of Japan (Japan) JOHN
IVINSON, Action 2000, (United Kingdom) G.K. JAYARAM,
Chairman, Transformation Systems, Inc., (India) SERGEY ROGOV,
Director, Russian Academy of Sciences (Russia) JOHN SARAZEN,
Senior Year 2000 Consultant, Pi Technologies (Russia)
[...] MR. YARDENI: Well, if you insist. It seems to me that -- people
ask me what's changing and how's my assessment of the
macro-economic issues changing. The one thing that's clearly different
from a year ago is, many countries, many companies, many
governments, have a Year 1998 problem.
I don't know if we want to call it Y8K, but companies are facing severe
stress all around the world, countries are facing severe stress all around
the world, and simply are being totally distracted by the fact that there's
a very serious recession in many countries now.
I was supposed to do a video teleconference with a major bank in
Chile last Monday, and a week before they sent me a letter saying, you
know, thank you very much for blocking out the time but we are so
distracted with the impact of the Asian contagion on Latin America and
Chile on our bank specifically, that we've had to cancel the event. So I
think that's just an example of the kind of distraction that the current
problems are in fact, posing.
Based on what I heard today it seems to me that clearly, the situation is
not improving and it's just as clear to me that we're simply not going to
know -- we're going to go into this thing largely blind as we go into the
year 2000.
Based on what I heard today it seems to me that we immediately need
to have disarmament talks -- nuclear disarmament talks between the
Russians and the United States, with the specific purpose of making
sure that nuclear missiles are not aimed at each other since neither one
of us can completely guarantee that these things are under our control.
Based on what I've heard today I think public officials are at some
point, probably the middle of next year, going to have to tell the public
that they cannot assure them of the food supply, they cannot assure
them that the lights will be on, they cannot assure them that the phone
system will work, and that they need to make preparations at their
community levels to deal with these issues.
I tell all my friends that talk about stockpiling, whatever you do, don't
do it in December of 1999. If you're going to do it, do it in the summer
of next year. And there's nothing imprudent about that, there's nothing
panicky about that; quite the opposite. The worst that can happen is a
lot of us will feel very silly that we have all the spaghetti sitting in the
basement and it was totally unnecessary.
But I don't think it's going to be unnecessary. I think we have to
seriously start to consider having rolling shutdowns for a weekend, or
for a day at least, of the electrical power systems and the
telecommunication systems in our neighborhoods. It doesn't have to be
all at one time across the country.
But the fact of the matter is, we are not going to test our electrical
power system, our telecommunications systems because they are on all
the time. What we have to do is have one day where we push all the
clocks forward in our local phone system -- that means we won't have
access to the phones for one day -- and see what happens. That's
going to happen anyway but it's going to happen basically in an
uncontrollable situation in January 2000. Given what's at risk, why don't
we seriously think about doing that under a controllable situation
looking up ahead here?
With regards to my assessments of a global recession it's still at 70
percent. It's just a subjective assessment, but the fact of the matter is, in
some places there's 100 percent likelihood of a recession because it's
happening right now. And my sense is because of the recessions in
many countries we can pretty much expect that those countries will not
make their Year 2000 deadline.
The Year 2000, by the way, I was reminded by a Fed Governor
recently, starts in April of 1999. That's when state and local
governments move to a fiscal year. A lot of us have been wondering,
when is everybody going to start to get it and when is everybody going
to start to recognize there's a problem?
The public, the media is looking for an event, for some real
breakdowns, for some real problems. I think April 1st, 1999, April
Fool's Day of next year, may very well start to demonstrate the kind of
problems that we have when state and local governments move their
clocks to a fiscal 2000, and that leads to all sorts of disruptions as data
is exchanged with the federal government, with companies, and as these
entities have problems on their own.
The federal government is making progress; 50 percent of their
computers are apparently ready. I don't know what that means. Very
often we're not verifying it. Korea was mentioned. Korea as of August,
was 30 percent ready on its mission critical systems; totally unverified
from self-reporting. Brazil has announced that the deadline for all
companies -- this is the SEC of Brazil -- has announced the deadline
for all companies to be ready is -- get this -- December 31st, 1999.
And there will be fines imposed on companies that aren't ready. Japan,
the banks -- there was an August survey done by the Bank of Japan.
It's on the Internet. You can't find it because it's buried away in one of
their FTP sites. I did link it on my Internet site. And it's all
self-reporting; totally unverified.
And I'm not being critical of Japan. The fact of the matter is we're all
just taking these surveys at face value and the honest appraisal is,
they're not worth anything because they're not being independently
verified.
So I remain very concerned about a global recession. I think it's going
to be wicked and I think we have to recognize that it's going to
combine Y2K with the global banking crisis. This is not an Asian
contagion; it's a banking panic, a banking crisis that's simply centered in
Japan.
Thanks very much for the opportunity to just give you a little u
..
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