[IWAR] Y2K 1999 recession probable

From: 7Pillars Partners (partnersat_private)
Date: Sat May 02 1998 - 09:37:33 PDT

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    Year 2000 bug can spark 1999 recession, experts say
       Chicago Tribune
       The Year 2000 computer problem wields the potential to trigger a
       recession by the second half of 1999, a panel of experts said Friday.
       This information-age gotcha could stymie the booming economy by
       corrupting the quality and flow of information through financial
       markets, interrupting delivery of utilities and halting production on
       factory floors.
       ``You can't spend money with the same efficiency if your systems don't
       work,'' said Dennis G. Grabow, chief executive officer of the Millennium
       Investment Corp., a Chicago money management company.
       Given the potential for problems, investors should evaluate stocks based
       on the company's progress in addressing Year 2000 issues, Grabow argued.
       Corporations should avoid mergers and acquisitions that increase their
       information technology risks, he said.
       Grabow was one of four experts who assessed the economic impact of the
       Year 2000 problem at a management conference held by the University of
       Chicago's Graduate School of Business. Of the 1,500 participants, about
       55 attended the Year 2000 discussion.
       The Year 2000 software issue is rapidly gaining time and attention in
       management circles because it touches nearly every type of business
       whether it is run on a desktop PC or a mainframe computer.
       The problem manifests itself in software that can't accommodate a
       four-digit entry for the current year, or determine the century through
       contextual references. That means when 2000 begins, many programs will
       register only the ``00'' and read the date as 1900.
       While opinions vary on the how severe Year 2000 problems might be, few
       argue that the issue has to be addressed.
       The software glitch is troublesome because of the huge strides that have
       been made in information technology and automation. Computers not only
       sit atop desktops in corporate America, but they run machinery,
       telecommunications equipment, utilities and medical devices. Even if a
       company takes measures to fix all of its own computers, that doesn't
       guarantee it won't be affected by a less proactive supplier or customer.
       As such, a machine tool shop is as vulnerable as a multimillion-dollar
       oil tanker, an amusement park ride or a stock exchange.
       Panelist Bruce Webster of Vienna, Va.-based Object Systems Group, who
       helps head the Washington, D.C., Year 2000 Group, recently conducted a
       survey of technical managers, consultants, lawmakers and others who are
       involved in tackling Year 2000 issues.
       Most of the respondents were pessimistic about progress made on the Year
       2000 problem to date, Webster said. More worrisome, a vast majority
       expect that the lack of progress will translate into an economic
       Eighty-four percent believe the problem will trigger at least a 20
       percent drop in the stock market. Two-thirds said they believe it will
       cause at least an economic slowdown, increased unemployment and some
       isolated social incidents, Webster said.
       The lack of confidence stems from the technology industry's reputation
       for missed deadlines and unanticipated problems.
       Since averting a Year 2000 glitch involves not only years of fixes but
       extensive testing of the key computer systems, there are doubts that
       technicians will be able to deliver fail-proof results.
       ``The odds of every company delivering mission-critical systems on time
       is zero,'' said panelist Sharon Condon-Duffy, vice president, sales, for
       Syntax Communication Modeling Corp. in Wilmington, Del.

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