Interesting interview from Australia

Story aired: 14 March, 1999 Reporter: Jeff McMullen Producer: Julian Cress

JEFF MCMULLEN: In 291 days, four hours and around 25 minutes, governments and businesses around the world will be very nervously watching Australia. We9ll be one of the first countries on earth to welcome in the year 2000 and find whether all the horror stories about computer meltdown are about to come true. You see, when the new year is counted in, some computers won9t know how to handle the fact we9ve changed centuries, and experts are predicting everything from minor inconvenience to complete breakdown of modern life. The only certainty is that the big reckoning is getting closer as every second ticks by. With the year 2000 coming up, the celebrations on New Year9s Eve should be spectacular. According to some, the biggest gatecrasher of all time, the millennium bug, is going to spoil our party.

REPORTER: Why have you called the millennium bug a time bomb?

ED YOURDON: Because we know exactly when it9s going to occur and unless most, if not all, of the computers are fixed, literally things will blow up.

REPORTER: One of America9s original computer whiz kids, Ed Yourdon is now using his desktop to try to warn the world of what he calls Time Bomb 2000. As the clock strikes midnight and we begin the year 2000, how will this problem affect most of us?

ED YOURDON: Well, the average person may find that the lights go out; that9ll be the first noticeable thing. There may be brownouts or blackouts, which may last for a couple of hours, days or weeks, but the danger for Australia, the US and Europe is that if one or two plants go down they can pull down the rest of the grid with them. And what9s going to pull them down is little microchips. The same kind of technology that you see in your VCR or microwave oven  there are literally tens of thousands of these in your typical modern power plant, and we9ve had four or five simulation tests in the US where they tried rolling the clock forward to see what happened, and in all of them the entire plant shut down.

Snip

REPORTER: So this is the bill I would have got.

PAT MCLAGAN: That bill, for in excess of $12 million for a 99 year, 23 hour, 30 minute phone call; that9s pretty good.

Dr ED YARDENI: I would have to believe that there9s going to be some major companies that are going to be disrupted and may not be able to produce for several days, probably several weeks, maybe a few months. I think a lot of small mid-size companies that are not taking the problem seriously enough will also be at risk of actually failing, not being in business.

REPORTER: Dr Ed Yardeni is one of the most influential forecasters on Wall Street. He believes that the failure of small businesses wiped out by the millennium bug will be enough to trigger a financial meltdown. Are you prepared to forecast that specifically?

Dr ED YARDENI: Well, I9m prepared to say that there9s a 70 percent chance of a global recession as bad as 73-974. I could see the US stockmarket down 30 even 40 percent from its peak.

REPORTER: And as goes the American economy, so too goes Australia9s?

Dr ED YARDENI: Oh, absolutely. A severe recession in the US would feel even more severe in a place like Australia. Its commodity prices would really be knocked even lower and there would be a lot of industries that would be especially hard hit.

ED YOURDON: I would be very concerned if I were in your shoes at this point.

REPORTER: Do you expect a global recession because of the millennium bug?

ED YOURDON: Oh, I certainly do. I don9t think there9s any question at all. For example, we have 11,000 banks in the United States, they9re all working on year 2000. None of them are finished at the moment. And I think there9s a reasonably good chance that 10 or 15 percent won9t finish. Now if 10 percent of the banks, 10 percent of the power companies and 10 percent of the manufacturing companies go down, it9s not the end of civilisation as we know it, but it9s going to be a hell of a recession.

REPORTER: Ed Yourdon has fled his former digs in Manhattan and taken to the hills of New Mexico. He9s not expecting planes to fall out of the sky, or World War III, but this computer expert says it9s common sense to be prepared.

ED YOURDON: Well, I9ve gotten out of the stockmarket and moved out here. I9ve made a number of plans.

REPORTER: Do you think that we would all be better to make some simple preparations?

ED YOURDON: I do. I view a lot of the plans that I9m making as consumable insurance, for lack of a better term.

Snip

REPORTER: And globally?

MAURICE NEWMAN: Globally, when we started this we were told the figure was about $US600 billion. We9re now talking one trillion, two trillion, which in Australian dollars is plus 3 trillion dollars: that9s a lot of money.

ED YOURDON: Some of the calculations that are taking place now are comparing this to the overall cost of World War II, and it appears that we may end up spending more. Certainly, it9s now being acknowledged as one of the most complex problems in modern history, and usually solving complex problems is an expensive proposition.

REPORTER: Is there a danger that by being so alarmist now, you could help bring on a recession?

Dr ED YARDENI: I do struggle with this issue: whether I9m contributing or I might contribute to making the situation more grim than it has to be. But if the policy-makers can9t 100 percent assure us that there will be very few disruptions and the food supply will not be affected and the energy supply will not be affected, if they can9t do that, then I think policy-makers owe it to us to tell us that maybe we should make provision to a certain extent for ourselves.

-- Anonymous, March 17, 1999

Answers

Geeeez Marianne, are you sure this is a legit interview? I have read a lot of Yourdon material and read and listened to a lot of Yardeni statements and have never heard either one talk like this. Maybe I'm being a pessimist, but this material sounds like a hoax.

-- Anonymous, March 17, 1999

If this is authentic, it's got to be old. One statement attributed to Yourdon mentions shutdowns during Y2K testing of power plants, but says nothing of the 50 or 100 or more plants whose clocks have been rolled over and are doing fine (not that that constitutes proof of compliance, but it counts for something).

-- Anonymous, March 17, 1999

From http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000c8R

Does anyone know what specific power plants Ed was talking about? Or do you think they misquoted him?

Ed answered.....

The Australia "60 minutes" interview took place at my house on Aug 11, 1998 and finally appeared on TV some 7 months later.

I don't know whether I actually said that all 4-5 of the utility plants "shut down" after a rollover test was attempted; if indeed I did say that, I should not have. I do know of one utility that did shut down, and I know of another three or four that suffered problems -- but I don't know whether those other ones actually shut down.

As you know in the Y2K field, an enormous amount can happen within a single week, let alone 7 months. The incidents I was referring to took place in the spring of 1998, and one would imagine (or at least hope) that they've been fixed by now. In any case, one should turn to things like the recent NERC report, or information from Rick Cowles, or other such sources, for more up-to-date info on the status of utility plants.

As for the identity of the 4-5 plants I was referring to: no, I won't name them. Chances are that the utility companies would deny the allegation; after all, we live in the land where the determination of truth depends on what the meaning of 'is' is. And chances are that even if the allegations were true in the spring of 1998, the problems have been fixed.

Ed

-- Ed Yourdon (ed@yourdon.com), March 16, 1999.

-- Anonymous, March 18, 1999