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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion -- Ignore unavailable to you. Want to Upgrade?


To: Steve Woas who wrote (13217)11/5/1998 6:22:00 PM
From: BigJake  Read Replies (1) | Respond to of 13949
 
I have to jump in and agree that there is still a great deal of Year 2000 denial going on. Self reporting by these organizations allows some "truth stretching" about their Y2K progress. I believe during 1999 we may see some real panic to catch up by the slower companies and government organizations. Tools could well come back into favor in 1999, as a means to expedite progress.



To: Steve Woas who wrote (13217)11/5/1998 6:31:00 PM
From: SOROS  Respond to of 13949
 
NEW REPORT AVAILABLE Y2KNEWSWIRE.COM has just completed a new report, available free of charge, entitled, "Y2K
Frequently Asked Questions." You can access the report at: y2knewswire.com

90% OF COMPANIES MISSING Y2K DEADLINES Cap Gemini, a large player in the financial services automation industry, has
been tracking the Y2K progress of 127 public and private companies. Last week, they announced that 90% of the companies being
tracked had missed Y2K-related deadlines. And the trend is looking ugly: the number was only 78% in April. And 44% have already
experienced Y2K-related disruptions of some sort.

The story goes on to say: Local organisations have also seen deadlines blow out as the full scale of their projects is revealed,
according to the Y2K industry program chief executive officer, Mr Graeme Inchley. "It is going to be tight right up until the final
deadline as companies realise it is going to take much longer than first expected, " Mr Inchley said.

"Blow out" is the right phrase here, of course, because that's what we're going to see approximately a year from now. Companies
and federal agencies are currently making baseless assumptions about large-scale software remediation timelines, and as with all
large software projects, the spokesperson can claim everything is on track right up until the day it needs to work: and then, there's a
"sudden and unforeseen failure..." More on this below, with cited evidence.

Link at: afr.com.au

CONTINGENCY PLANNING For an excellent article on the need for contingency plans, visit:
it.fairfax.com.au

And then remember, the IRS has no contingency plans.

SURVIVALISTS AWAIT Y2K This Associated Press story appeared yesterday in the North Carolina "News & Observer." It's worth a
read: news-observer.com

GOVERNMENT MISSES THE GRADE The federal government's Year 2000 Progress chart, updated in September, shows us who's
behind schedule and who isn't. Lets look at the good news first:

WHO MAY MAKE IT
: Social Security Administration Small Business Administration Dept. of Commerce Environmental Protection Agency FEMA

WHO IS IN THE "MAYBE" CATEGORY: NASA Dept. of Agriculture Dept. of Treasury (includes the IRS) Dept. of Transportation

WHO WON'T MAKE IT: Dept. of Defense Dept. of Labor Dept. of Interior Nuclear Regulatory Commission HHS (Health and Human
Services) Dept. of Energy Dept. of State Dept. of Justice Dept. of Education

In fact, the Dept. of Justice is scheduled to by compliant no later than the year 2030!

Remember, this is the claim by the federal government. Given that most large-scale software projects fall behind schedule by at
least six months, and that various government agencies have proven their inability to tell the truth about Y2K compliance, we must
always remain skeptical and vigilant about claims of compliance.

WHERE DO THE FIGURES COME FROM? Here's the scary part. The "grade" given to these agencies is based on information
supplies by the departments themselves! To quote the report, "The primary determinant of grades is Mission-Critical Systems -
specifically, the estimated completion date based upon agency self-reported current rate of progress."

The key phrase here is "self-reported." Logistically, this is equivalent to allowing a classroom of high school students to assign their
own grades. "Yeah, we deserve an A+!" Any study based on self-reported figures should automatically be suspect.

But that's part of the problem here, see. There's no agency that runs around verifying compliance claims. So through 1999, as we
begin to hear proclamations of compliance from both the private sector and government agencies, we really have absolutely no way
of knowing if we're being lied to. And in many cases we've already seen, deceit is the default. This is unfortunate, because there will
undoubtedly be some companies and even a few government agencies that will be fully (internally) compliant, and yet trusting their
compliance pronouncements will be extremely difficult.

BUT INTERNAL COMPLIANCE IS MEANINGLESS Remember, however, that isolated compliance is worthless. Unless the data
interchanges are compliant, and unless the majority of the other systems in society are compliant -- including power, banking, and
telecommunications -- isolated, internal compliance does no good. For example, suppose FEMA declares and verifies Y2K
compliance sometime in 1999. Does that mean FEMA will then function at 100% after January 1, 2000? Of course not; not unless
the rest of society is running at near-perfect levels as well. FEMA can't do much of anything without telecommunications and
transportation.

HOW TO KNOW WHEN THEY'RE REALLY DONE No company is really done with Y2K repairs until they
fire the programmers
. That's right. If you hear a company claiming Y2K compliance, immediately ask, "Did you fire the programmers?" Because if they
are TRULY finished, tested, implemented, and fully confident of the repairs, there's no chance those programmers will stay on the
payroll (unless they're moved to a different project).

When a company declares Y2K compliance and
doesn't
fire the programmers (or move them back to non-Y2K projects), you can correctly assume they are lying. In fact, this is the best
external compliance check we've come across.

TAKE A LOOK AT SOCIAL SECURITY The SSA began Y2K repairs in 1989! They had almost 400 programmers on staff, fixing
millions of lines of code. In six years, they finished almost six million lines of code. The SSA is the "success story" of the Y2K
repair debate. They started early, they hired the resources, and they plan to finish all critical systems by March of 1999.
(Remember, though, they're STILL not finished!)

Now figure this: if the SSA took
ten years
to fix around 60 million lines of code, what makes these other government agencies think they can do it in two or three years?
Most agencies didn't even begin repairs until 1997 or 1998, and many have a lot more code than the SSA.

Apparently, the "unlimited compression" theory mentioned yesterday is alive and well at federal agencies. They seem to think any
process can be squeezed into whatever time is remaining. Imagine the questioning by a reporter:

Reporter: How long will it take your agency to finish Y2K repairs?

Agency spokesperson: Ummm... how long do we have left?

Reporter: Fourteen months.

Agency spokesperson: Ummm... yes, that's it. Fourteen months.

Reporter: The repairs will take fourteen months? Exactly fourteen months?

Agency spokesperson: Yep. Fourteen months. That's our schedule. I believe we will be fully compliant in fourteen months, and I'd
like to add that public safety is our number one priority.

Reporter: Shouldn't Y2K be your number one priority?

Agency spokesperson: Well, that too.

.. and so on.

Link at: freedom.house.gov

TESTING DOESN'T MEAN THE REPAIRS ARE FINISHED Y2K remediation has often been described in "phases." You typically
hear:

planning and assessment
repairing the code
testing the code
implementing the code

Problem is, this is a gross oversimplification of what really goes on. Understanding what really goes on in a large-scale software
project is critical to understanding why the timelines offered by government agencies are entirely inadequate.

First of all, you never know if the code was "repaired" correctly until you test it. So when you enter the testing phase, you are going
to -- without a doubt -- return to the repairing phase... probably hundreds (or thousands) of times.

Remember, too, that this testing takes place in a simulated environment. At this point in the game, the system hasn't even been
implemented in the "real world."

After the software works fine in the simulated testing environment, it is "implemented." This means replacing the "old" software on
the live computer systems with the "new" software. This act alone will cause disruption. You can't replace the software without
bringing down the systems. So Y2K "experts" who claim there will be no disruptions are simply clueless. This implementation
phase alone will cause disruption. Minor, yes, but still very real.

Now you have the system implemented. It's up and running on the live hardware, and now supposedly crunching numbers in the real
world. Now, if the testing environment was a perfect rendition of the real world, the new software will work perfectly. But in almost all
cases, software that is implemented in the real world -- even after it has been rigorously tested -- still needs to be tweaked. There
will be overlooked circumstances related to data, processing time, or hardware differences. Or the testing environment might have
been a poor representation of the real-world operating environment.

In almost all cases, even after the software is implemented, it must continue to be repaired and tested. Thus, you don't have
isolated phases; you have a loop. You repair, test, implement. Then you find a bug and repeat the whole process.

In a large-scale software project, this whole process is enormously complex. Doing it right requires
years
, not months. This is how software really works.

AND HERE'S THE BOTTOM LINE: When companies and government agencies begin shouting, "We're compliant!" in 1999, you can
be sure that in most cases, they will be announcing their completion of the FIRST round of code repair and testing. In most cases,
they will not have implemented the systems in the real world, and they will not have been through the repair, test, and implement
procedure more than once.

As a result, when you hear, "We're compliant!" ...you'll know they've only begun the real process of replacing the live software and
letting the fixes churn on data in the real world.

WHAT EVIDENCE DO WE HAVE TO BACK THIS UP? Just yesterday, we released a report about how the FAA's new computer
systems, designed to combat Y2K problems, are causing havoc over the Chicago O'Hare International Airport. The software is
miscalculating airplane speeds and positions, and in more than one instance, pilots have had to take evasive action. The link was
at: chicagotribune.com. html

You can bet this system looked "just fine!" when it was in the development phase. The code looked good, the tests worked fine. But
then it hit the REAL WORLD. The real world is not some testing lab. It is not some software simulation of a mainframe computer
with a random data set. The real world is unpredictable and inconsistent, and as the FAA is finding out, their new systems simply
aren't compliant with the real world.

(Yet, that doesn't stop the FAA from claiming the system is "certified as safe!")

Y2KNEWSWIRE also reported a few weeks ago on a successful Y2K test of a Tomahawk missile. The test, which was conducted
in a software-only format in a laboratory somewhere, was heralded as a demonstration of the military's ability to conquer the
Millennium Bug. As Y2KNEWSWIRE pointed out, this test is certainly wonderful if wars were fought in simulated environments, but
real missiles have to guide themselves in the real world, over real terrain. And until you actually launch missiles after January 1,
2000, you really don't know if they're going to work.

Furthermore, most military missiles use the GPS systems for guidance, and GPS works fine in 1998. But a year from now, on
August 22, 1999, the Global Positioning System is going to lose 1024 weeks when its "week" register rolls over to "0000." And so
any test of any GPS-dependent missile in 1998 is almost meaningless. How will those missiles fly in 2000 when they think it's
actually 1981? Their little missile-brains will be thinking, "Gee, these stars look funny..."

Be extremely wary of claims of compliance on systems that have not yet met the real world. Because in the end, only real-world
implementation counts. Everything else is hype.

- Webmaster alert@y2knewswire.com



To: Steve Woas who wrote (13217)11/5/1998 6:33:00 PM
From: SOROS  Respond to of 13949
 
CORRECTIONS:

Y2KNEWSWIRE stated in a previous alert that China was America's #1 trading partner. This is incorrect. Actually, Canada is
America's #1 trading partner. China is America's #1
Asian
trading partner.

Today's news alert comes to you in a special essay / editorial format. Tomorrow, it will return to the regular news format. Enjoy!

BLAME EUROPE The chameleon-like Gartner Group, which earlier in the year seemed to be shouting "Fire!" and then last week
suddenly recommended that nobody take money out of the banks, is now pointing their finger across the Atlantic: it's Europe's fault!

This Reuters story quotes Andy Kyte, a Gartner Group analyst:

"European governments and public sector organizations have only spent between 5 and 10 percent of what it needs to fix their
systems. The public sector is the biggest danger here. They're not doing the [Y2K repair] work at all."

Link at: news.com

Ouch! As you know, Europe is busy working on the conversion to the Euro, and that's tapping a large chunk of the experienced
programmers. There are still plenty of ex-welfare COBOL programmer running around, though. For some reason, companies are
afraid to hire these people. You mean eight weeks of training isn't enough to turn an ex-welfare recipient into an experienced Y2K
repair programmer?

OH YES, WE LOVE TO BLAME Remember something else, too: Americans love to blame everybody else. Dropping corporate
profits aren't the fault of half-brained CEOs who chose to ignore the law of business cycles. No, it's the fault of those darn Asians
who crapped out their economies. The drug problem isn't due to crack-happy American consumer buying up the stuff on street
corners; no, it's the fault of those darn South American countries that keep growing the stuff! And now, we see the seeds of blame
that will soon blossom into, "Blame the Europeans!"

BLAME SOMEBODY, PLEASE! In all seriousness, failed American companies and government agencies are going to have to find
SOMEONE to blame. The Dept. of Energy figured this one out a long time ago: they dragged in the NERC to take the heat. Hardly
anyone had heard of the NERC (North American Electric Reliability Council) until Y2K came along. Now, they're spearheading the
repair efforts among electric utilities. If the effort fails, the Dept. of Energy people have a scapegoat. That's a good thing, too,
because the Dept. of Energy is currently receiving an 'F' grade on their own Y2K repairs, and according to the House report (link
below), the Dept. of Energy won't be ready for the Year 2000 until the year 2002. Nice timing. Link:
freedom.house.gov

BLAME GOD There's also the strategy of blaming God! The insurance industry, in particular, is practicing their favorite wallet-saving
mantra, "act of God!" Now, how exactly the missing two digits can be blamed on God is still a mystery, but with enough spin, it will
no doubt make sense to a jury somewhere.

OR JUST BLAME NOBODY! Both Congress and the President, under intense pressure from the business community, managed to
agree on the "blame nobody" strategy, and they passed the Good Samaritan Act that indemnifies companies against just about
anything that happens (or is learned) as a result of them disclosing Y2K compliance information. (In fact, this daily alert is protected
by the Good Samaritan Act!)

JUST DON'T BLAME AMERICANS Just don't blame Americans or you'll be called a radical fear-monger. The very idea that
Americans could have screwed this thing up is so foreign to most of us that we simply can't accept it. After all, we won World War
II! And heck, we sent a man to the moon, and that rocket didn't even HAVE computers! (Hint: that's why it worked!) We balanced
the budget! (Not really, that's a numbers game played by politicians who raid the social security trust fund.) How could we possibly
make such a dumb mistake as overlooking two lousy digits?

This isn't trying to be anti-patriotic. We love this country. This country has basically worked pretty well for a long time. The problem
is that over the last twenty years, we all participated in a mad rush to replace skilled people with automated computer systems. We
yanked people from highly-skilled real-world jobs (such as metal working) and replaced them with software-controlled programs. We
walked every mile of railroad track and removed the manual levers, replacing them with automated, remote-controlled track
switches. We dumped the accounting books and instead created virtual "records" stored on magnetic tape and solid-state FLASH
RAM chips. We traded everything for nothing, essentially, as real-world records and procedures were stuffed into computers as fast
as possible. All the while, the idea of the paperless office was cheered as one of the most important goals we could attain. The
more we could turn over parts of our lives to computers, the better off we'd be. One movie, Lawnmower Man, even played with the
idea that we could LIVE inside a computer, abandoning the physical world for good!

And we did this in a state of mind that completely ignored the very idea that someday, computers might not obey our commands
anymore. We were oblivious to the possibility that these machines of our own creation might one day go awry. Frankly, we were
blinded by technology, and our belief in computers to this day far surpasses even our belief in God.

What was wrong with this, really?

REMEMBER THE POTATO FAMINE? How many million Irish citizens died in the Great Potato Famine of 1845 - 1848? Millions!
And they died because they all depended on a single crop. Nearly the entire population shared a single, shared vulnerability: they
depended on the measly potato.

When that potato failed them, the population perished. Over three million people died not only from the crop failure, but also from the
resulting disease and dislocation that shook the nation to its knees.

You can bet, before the black rot began to spread, almost nobody thought those simple little potatoes, just buried there in the
ground, could have such a profound effect. Almost nobody saw it coming. The famine was a complete surprise.

Read more, if you dare, at: avery.med.virginia.edu

NOW IT'S COMPUTERS, NOT POTATOES The world is now poised for the same result from a similar oversight. But this time, it's
the computers, and it's global. Almost everything on which we depend for life is made possible by highly complex virtual interactions
between computers. From the electricity that runs your house to the food on your table, almost everything you consume depends
on the near-perfect operation of computers somewhere.

Just like the 19th century Irish, we have little by little placed our lives on the roulette wheel, and in fourteen months, on January 1,
2000, that wheel is taking a spin. Should computers fail us like the Irish Potato did, we may be lucky to lose only three million
people. After all, the Irish at least knew how to grow other crops. How many Americans actually know how to grow and harvest their
own food? Not one in ten. Probably not one in fifty.

Computers are the "shared vulnerability" of the 20th century. We have once again placed all our eggs in one basket, and that basket
is teetering on the edge. Should it fall, the ramifications are almost unimaginable, in precisely the same way the simple Irish farmer
could never imagine his family would die because of a microscopic fungus. The very idea was ludicrous. Anybody who said the
black rot could wipe out half the country was considered a loony.

The Millennium Bug is the black rot of modern times.

They say history teaches us all the important lessons. But only if we're willing to listen. And frankly, America has been reluctant to
hear the long-past echoes of dead Irish peasants who, if they were alive today, would most certainly say, "Beware the shared
vulnerabilities of civilization. For the very thing that served you well for decades may turn against you."

ENTER THE TERMINATOR This idea isn't really foreign to movie-goers. Remember the movie, "Terminator?" The national defense
was turned over to super-smart computers. They removed ALL the humans from the chain of command (and chain of actions) and
let the computer handle every decision. As the computer's "brain" learned and grew, it became self-aware and decided it would
really prefer a world
without
the humans, so it launched all the nukes and began manufacturing Terminator units to exterminate the humans.

Science fiction, for sure. But the person who wrote this movie speaks to a very real, legitimate fear that is now actually coming to
pass with Y2K: that as humans, we should NEVER turn over our entire lives to machines. To do that could result in a betrayal of
sorts. While Y2K isn't a conscious betrayal by computers, it is nonetheless a betrayal of technology.

The underlying theme of the movie is actually unfolding: we have turned over huge portions of our lives to computers -- our food,
medicine, electricity, telecommunications, transportation, water, money, and social protection. In fact, we have leveraged the
efficiencies of computers to allow unprecedented specialization of skills and unprecedented creation of wealth and prosperity.

Should that pyramid of efficiency come tumbling down, we're going to find ourselves in a society where specialization is
meaningless. Only through mass communication, free markets, transportation and the free flow of information can specialists exist.
(And we are ALL specialists at something.) The collapse of specialization, in any civilization, means a return to self-reliance. But
Americans are not self-reliant.

And that is exactly why it's time to stop pointing the finger at Europe. It's time that we, as Americans, faced up to the situation we
have created. We are not going to make it to full compliance by January 1, 2000. We are not going to be able to uphold the same
lifestyle, the same (seemingly) unlimited wealth and the same annual 25% stock market returns. These are not normal times, these
are extraordinary times built on extraordinary efficiencies and interdependencies.

And perhaps what will be recorded as the most amazing part of it all is that, once again, we never learned from history.

- Webmaster alert@y2knewswire.com