|HSL / Newsletter / Y2K|
Our cartoonist (pg 1) says: "So far, so good." That's true. The worst expectations of many Y2K-watchers didn't occur on Jan 1. That's due to the magnificent global energy poured into Y2K fixes. It was unified human cooperation at its best. It was also partly due to over-the-top assumptions that the world is totally dependent on chips in every aspect of life. That proved to be computer industry bragging. The world is not as computer-dependent as they said. Also, many nation's computers are so old they run simpler software, says Gartner Group. So, is the problem over?
Here are 4 bottom lines for U to choose from:
1. Y2K-related mishaps are occurring everywhere, by the million, mostly small (we've had several inhouse—& ongoing—& everyone we know has too), but not all are small!!
2. We can't tell yet whether these glitches are increasing or decreasing, partly due to reluctance of companies to admit problems in case it hurts their image/biz. Eg, Wells Fargo bank sent clients renewal CD notices for Jan 1900. And WF said it may not be Y2K-related! Mice? J
3. Most serious threat has always been OIL, & a production slowdown seems to have started, with mysterious silence by many oil men. With the crude oil price at a new high, amidst a warm winter, it smells like some insiders know all is not well at the well-head.
4. Most experts have said all along that Y2K means YEAR 2000 not DAY 2000. That it'll be months before we know if the Bug is dead. Oil production figures won't be available til mid-Feb at best. Dr. Gary North finds it totally illogical that everyone in the world fixed every major chip problem. Says probably the Bug has gone inside the system, will eat away like termites, corrupting computer files & ultimately foul up the works. Y2K is internalized. Maybe. No one can say. Even the US govt says: it's too soon to say if the cloud has passed. Boss of US Social Security Y2K-repair program Kathy Adams said "For those who exchange computer data, the worst thing that can happen is if data calculations are done but done wrong. It would be better if it broke." It could be risky to argue with all the above.
Huge bonus from Y2K is: in fixing the bug, companies were defacto modernizing. Remember after WWII how Japan & Germany built new factories to replace bombed ones—& thereby got a big jump on the victorious allies who limped through the war on old facilities. That led to the so-called German Miracle and Japan Inc. Now the allies are getting even, by accident. As the US did the most to fix the Bug, they gain the most. Y2K fears led most companies to leap into the 21st tech-century. Many didn't just patch-fix but replaced aging computer systems with modern ones. Thus they gained potential to do things they couldn't before. They threw out obsolete networks & electronic mail systems, replaced with faster computer programs which create time, formerly wasted. US firms spent billions to modernize. It'll pay off. It's true in every nation, in proportion to how much they spent. Y2K can now stand for Youthmaking 2000 Knowhow. (U can quote me)
That's progress. What we don't yet know is whether the Y2K Bug is dead, dying, or thriving underground. David Eddy, who coined the term "Y2K" in 1995, said on Dec 27: "Nothing will happen on Jan 1. Instead, the Bug will show up in insidious ways in the next few months, creating a tangle of bureaucratic nightmares. It's going to be like death by 10,000 paper cuts. We are going to hit the iceberg, some day in Y2K."
Let there be no doubt Y2K was/is dead serious. US Y2K chief Koskinen reports 3 govt unfixed computers were left running deliberately & all 3 crashed on Jan 1. Says: "The systems became unusable."
Programmer Lane Core says "Y2K is not a 1-time event. It's a chronic condition that will be with us for a very long time."
Also, let there be no doubt the glitches were many, are still going on & some were/are serious. Dr. GN has 44 pages of failure reports, so far. Mishaps include FFA computer failure disrupted east coast airports on Jan 6 for 2 hrs; like problems shut down both Washington airports for a time. US Defense Dept admits to a major Y2K-failure for several hours on Jan 1 when US spy satellites blacked out & vital info lost forever. 150,000 credit card transactions were involved in billing errors in one incident, says GICC.
French satellite lost ability to detect equipment failures. 67 significant computer failures around the world were reported by Y2K Research Centre, UK, set up by KPMG & Brit Bankers Assoc. They warn "Y2K isn't over yet. The most difficult to detect problems could prove a greater threat than dramatic failures like a system shutdown which are spotted immediately."
Information Week reports 25% of IT professionals say their computers had problems since 1/1, ranging from minor to serious. Microsoft had glitches causing wrong date displays on its Internet Explorer Browser & Hotmail E-mail programs.
ABC News (AP): "Y2K risk was never to power grids or phones but the backroom systems on which biz & govts run. So problems won't turn up for wks/mos, IT experts say. Think not of Y2K as an Info Age earthquake avoided, but as a steady stream of gradually more damaging tremors to come. Y2K computer problem will not go away."
20 nuclear plants had Y2K problems, some serious; no injuries.
Most concern is for the oil patch. Iraq lost 75% of its production last wk due to Y2K. An outage in the Mideast affected oil production. Pennzoil closed a refinery. LeMetropoleCafe.com reports steady rumours of refinery, dock, & tanker problems. Recurring ones that prevent preferred production levels. Oil men are normally tight-lipped, but now even more so re: refinery & pipeline conditions. Their silence isn't golden now. The price of oil at new multi-yr high implies there may be a serious oil shortfall ahead.
BUT, from an investment view, as long as the charts are bullish, I would not stay out of stock mkts for Y2K reasons, as I said on our website as 2000 began—provided U use stops. This is always our credo. Stops let U play whatever comes—quakes, crashes, comets or quirks of computers. Play it again, Sam. J