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To: ScatterShot who wrote (22810)	11/10/1998 5:32:00 PM
From: Alex	Read Replies (3) \| Respond to of 116758

Top economist: Odds of Y2K recession are rising June 30, 1998 3:53 PM ET <Picture>WASHINGTON -- As the clock ticks toward the start of the year 2000, a leading Wall Street economist says the odds have risen that computer malfunctions will send the world into a severe recession. "The fact is, there are only 550 days, and only 377 business days, until Judgment Day for our computers on Jan. 1, 2000,'' Edward Yardeni, chief economist at Deutsche Bank Securities, said in a paper presented at the National Association of Manufacturers. "Progress is occurring, but not as fast as the year 2000 is approaching.'' 70 percent chance Yardeni said the probability of a recession had increased to 70 percent from his previous forecast of 60 percent, and he said inaction on the part of global leaders and slow progress by the U.S. government had increased the likelihood of a crisis. "I can no longer say with any confidence that there is enough time to avoid a severe global Y2K recession,'' Yardeni said. The so-called "Millennium Bug,'' or Y2K (Year 2000) problem as it is known in the computer industry, stems from time clocks in computers that recognize years in only two digits and will not be able to differentiate between the years 2000 and 1900. Power outages and disruptions to telephone service and other vital services could result if the snafus were not fixed on computers that run those systems. Yardeni said firms that have not addressed the problem could be cut off by others that have fixed it, and could fail as a result. A panic could ensue if the problems were widespread and consumer confidence could plummet, he said. Contingency plans needed President Clinton has established a "Y2K Conversion Council'' to look into how the federal government can address the problem. But Yardeni said a more aggressive effort is needed to set goals and priorities and establish contingency plans. Yardeni, named by the Wall Street Journal as the top U.S. economic forecaster in 1997, is well known for his predictions of a Year 2000 recession. He said the downturn could be accompanied by deflation, a cycle of falling prices.