Yardeni predicts small chance of depression.

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Ed Yardini has now said there is a small chance of depression lasting 2-3 years with blackouts. Social and political upheavel. This link requires adobe acrobad reader. CLICK HERE


-- flierdude (mkessler0101@sprynet.com), February 20, 1999


Isn't this what several "Y2K experts," have said? Prepare as if you won't be working tomorrow and the only food and water you have available is what you have stored. CYA all the way!

-- HoHum (HoHum@HoHum.com), February 20, 1999.

Link doesn't work for me

-- Not Found (WebCom@sorry.page), February 20, 1999.

Its at http://www.yardeni.com/yardeni/public/y1999022.pdf


-- flierdude (
mkessler0101@sprynet.com), February 20, 1999.


-- flierdude (mkessler0101@sprynet.com), February 20, 1999.

May be easier just to go to his site and then click on the latest Y2K Reporter (Feb. 22) -

Click here to go to site: Dr. Ed's Y2K Reporter

-- Mac (sneak@lurk.com), February 20, 1999.

I see I am not the only one that has trouble with links.

-- Linda A. (adahi@muhlon.com), February 20, 1999.

Yardeni was never a serious GI. Everything that he ever wrote on the subject of y2k seriousness was a mild to moderate recession. Some failures, all correctible in a few days, which to me does not seem possible.

-- dave (wootendave @hotmail.com), February 21, 1999.

Selected paragraph from the article:

Dr. Edward Yardeni, Chief Economist February 22, 1999 Phone: (212) 469-5715 #36 Fax: (212) 469-5725 E-Mail: yardeni@yardeni.com Web Site: http://www.yardeni.com/ THE Y2K REPORTER


Nonevent? I first started to study and to write about Y2K during the summer of 1997. At the time, there wasnt much information about the subject. But I found enough to conclude that Y2K disruptions could cause a serious global recession in 2000. Given the dearth of data, I gave such a scenario a 30% probability. Back then, most of the available, credible information was limited to the US federal governments quarterly progress reports. As a result, most of my concerns during the last few months of 1997 and the first half of 1998 focused on the possibility that vital government services might be seriously impaired. The most vulnerable agencies seemed to be the Internal Revenue Service, the Health Care Finance Administration (i.e., Medicare), the Federal Aviation Administration, and the Defense Department.

I subsequently raised the odds of a major recession in several steps up to 70% by June 1998. I did so even though I have become a bit less alarmed about the readiness of the federal agencies, the banking and finance industry, the national electrical power grid, and air traffic control. I remain at 70% because I now have more alarming information about the slow pace of progress overseas. At the same time, the Y2K disclosure statements filed by Americas largest companies with the SEC during the third quarter of 1998 were disquieting. Other vulnerable sectors include just-in-time manufacturing, global maritime shipping, state and local governments, embedded microprocessors, gas transmission and distribution, world oil production, and local utilities.

The following table lists the five possible economic effects of Y2K in 2000. The overwhelming consensus of my colleagues is that it will be a nonevent. According to a quarterly USA Today survey of economists conducted September 18-22, 1998, Y2K is likely to add 0.1 percentage point to US economic growth in 1999 as businesses gear up spending on updating their computer systems. The economists surveyed estimate the economy will grow about 2% in 1999. The economists estimate that Y2K disruptions would probably shave 0.2 percentage points off U.S. gross domestic product growth in 2000. I agree with the 1999 forecast, but I see a much more significant downturn in 2000.

Low-Probability Extremes. I think I know enough about Y2K now to give you a more detailed assessment of my subjective probabilities of the five alternative scenarios. I assign 10% and 5% probabilities to the most optimistic and the most pessimistic scenarios, respectively. Unfortunately, most discussions and debates of the subject tend to focus on these two extremes, namely, either it is a hoax or it is doomsday.

[snip] (you really should get Adobe reader ;-))

-- Chris (catsy@pond.com), February 21, 1999.

It's nice to see Dr. Yardeni coughing up what many of us have been saying here for a looooonnnnggg time about manufacturing and global impact.

-- PNG (png@gol.com), February 21, 1999.

This is basically what Yardeni said when he was up against Koskinen on Wall WT Week in January. Several analysts in previous segments of the show said the economy was looking great, Y2K not mentioned at all. Koskinen was about to say everything was great. Yardeni looked alot like a deer caught in headlights and was obviously being *very* careful in what he was saying. 70% chance of major economic disruption (I know he didn't way "depression", I don't recall if he used the word "recession") as a result of global supply chain problems. To me, he looked like he was holding back because he knew what he was saying was so against the grain. So nothing has improved in at least the last month for him.

-- Brooks (brooksbie@hotmail.com), February 21, 1999.


"The overwhelming consensus of my colleagues is that it will be a nonevent"

What the f.. - blazes...

WWW.RUSSKELLY.COM - Experts predictions average a 7.3 on a sacle of 0 to 10.

Does that sound like a nonevent??

Anyway, all credit to Yardeni, as an Economist he's one of the few of that ilk with any common sense at all. And he's had the guts to go against the grain for some time now.

-- Andy (2000EOD@prodigy.net), February 21, 1999.


I believe that when Yardini referred to his colleagues, he was referring to other economists, not to such people as comprise Russ Kelly's group of 10.

As for his new estimate:

Y2K Economic Scenarios Probability

Minor disruptions. Business as usual. Only a few problems, which will be fixed rapidly. Stock market unaffected.


Same impact as natural disaster. Business as usual within a few weeks. Stock market unaffected.


Multiple problems will cause modest 6-month recession. Real GDP down 1%-2%. Stock market down 10%-15%, then soars.


Major global recession lasting 12-24 months. Real GDP down 2%-5%. Stock market down 30%-40%. Flight to quality. Deflation.


Depression lasting 2-3 years. Blackouts. Social and political upheaval. Stock marketyou don t want to know.



-- Jerry B (skeptic776@erols.com), February 21, 1999.

People need to read the whole article before reacting. As someone said, this is pretty much in line with what Yardeni said all along: a 70% chance of moderate to MAJOR recession (sounds an awful lot like a depression if you aren't a stock market analyst). And his statistics are alarming. Remember this warning comes from a very cool-head "Wall Street Week" type. Even with trying to not let my bias color what he says, I find it a VERY convincing report that it is very likely we are in for some deep doo-doo. If he ever wrote about the whole interconnected picture I think he would sound an awful lot like Gary North!

-- Jon Johnson (narnia4@usa.net), February 21, 1999.

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