Hoarding, not computer bugs, may bring Y2K woes

By Raymond Hennessey Dow Jones News Service

NEW YORK - Whether or not computers fail when the clocks hit midnight at the end of this year, the so-called Y2K problem has already begun to make its mark on the U.S. economy.

By Dec. 31, the vast majority of U.S. businesses will have sufficiently upgraded their technology to prevent systems disasters from occurring when computers, programmed to recognize dates in two digits, such as ``99,'' have to deal with ``00,'' as in 2000.

Still, a level of uncertainty remains, and consumers and businesses are increasingly indicating that long-standing buying habits will change.

That, in turn, will change the way many companies do business.

``What's been described as a technological issue is not. Actually, it's a social and political problem'' as well, said Andy Kyte of Gartner Group Inc., a consulting firm in Stamford, Conn.

The non-technological ramifications of Y2K are being overlooked, Kyte said, and they are likely to affect businesses and customers in ways most companies haven't yet contemplated.

From a technology standpoint, no one knows what will happen at year's end. From a human standpoint, however, some effects of Y2K are more predictable.

The Federal Reserve expects people to pull so much money out of their bank accounts - just in case - that the country could run short of cash.

The Fed has asked the U.S. Treasury to print $50 billion in additional currency for U.S. use, plus and extra $20 billion to be distributed internationally. The currency will be added to the $150 billion the Fed keeps in its reserves.

Average consumers consistently have shown that they are worried about Y2K - and many plan to do something.

A USA Today/Gallup Poll of 1,032 consumers conducted last December found that 65 percent planned to confirm or document bank balances, retirement accounts and financial records before Dec. 31.

An additional 31 percent planned to keep large amounts of cash on hand, and 16 percent said they'd empty their bank accounts.

Grocery stores and gas stations look especially vulnerable to Y2K.

Worst-case scenarios see supermarket shelves being swept clean and drivers filling their garages and basements with jugs of gasoline to keep their sport utility vehicles running.

San Antonio's H.E. Butt Grocery Co., the country's 12th-largest grocery chain, is trying to head off hoarding by providing customers with information about the year 2000 readiness of itself and its suppliers.

But there are risks in doing that, said Gavin Nichols, the company's Y2K coordinator. ``There's a fine line that a retailer has to walk so the public isn't pushed into stocking up,'' he said.

Non-consumer products could be hit by stockpiling, too.

Hospitals, for instance, won't dare run out of medical supplies; they'll be sure to have plenty of syringes, oxygen, drugs and paper products on hand to tide them over if orders can't be filled for a few weeks after Jan. 1.

For pharmaceutical companies, paper-products makers and other hospital suppliers, that could push significant amounts of sales ahead a few quarters this year.

It could mean overtime pay and factories running flat-out by late summer or early fall and practically no sales at all in the first quarter of next year as hospitals use up their bulging inventories.

The scenario could cut across U.S. industry.

Among U.S. companies surveyed in November by consulting firm Cap Gemini, 38 percent said they planned to stockpile supplies, and 68 percent said they were looking for alternative sources in case their usual suppliers have Y2K problems.

All this could add up to some palpable effects on the U.S. economy.

Dean Croushore, assistant vice president and economist at the Federal Reserve Bank of Philadelphia, earlier this year polled 33 economic forecasters for the Fed's quarterly Survey of Professional Forecasters.

He found that 27 percent of them expect to see a decline in gross domestic product growth in the first quarter of 2000 because of sales pushed ahead into the third and fourth quarters of 1999.

Most economists surveyed by Croushore don't expect widespread computer systems failures.

``There's a feeling that these businesses have too much money on the line and are too risk-averse, so they've gone out of their way to make sure their systems will work,'' he said.

Perception can be more important than reality, and it's harder to predict, said David Blitzer, chief economist at Standard & Poor's.

Even minor problems unrelated to Y2K, such as a coincidental shutdown of an airport, ``could create some kind of dramatic change in public opinion that could easily alter the economic outlook,'' Blitzer said. ``Economics is always more reliant on emotion than we would like.''

In many ways, companies have contributed to the uncertainty by ignoring for too long the economic impact, some say.

``It's obvious that there's so much focus on computers and not enough on the consumer,'' said Fred Talbott, professor at the Owen Graduate School of Management at Vanderbilt University.

Too many companies' ``policy is to not say anything to anyone, and that's just not smart business,'' he said.

Talbott said companies are giving customers legalistic explanations that the technological situation is under control instead of straight talk.

His suggestion is simple: Be forthright with customers. ``It's really not rocket science,'' Talbott said. ``Just tell the truth and don't make any promises you can't keep.''

-- Norm (nwo@hotmail.com), April 25, 1999

Answers

Unless the Butt Store has walked its WHOLE supply chain, as a company that is a customer of mine has, they are NOT Y2K OK, or compliant, or ready, choose your term.

RELTEC has walked its WHOLE supply chain, and it's distributor chain to verify compliance. And they did it with high level corp execs.

Chuck

-- chuck, a Night Driver (rienzoo@en.com), April 25, 1999.

Help me out here Norn, is that good news or bad news?

Regards,

-- Mr Deedah (oncebitten@twiceshy.com), April 25, 1999.

If people would prepare over a period of time, there would be NO hoarding. It is the NO BIG PROBLEM people that will be doing the hoarding, not the preparers.

-- SCOTTY (BLehman202@aol.com), April 25, 1999.

Mr.Deedah,

It's both good news and bad news. Have you noticed how Koskinen does this same thing? Lately, he will tell the press that the US is looking real good for Y2k readiness, BUT he will also say that it doesn't look real good *over there.* He recently mentioned the real risks to our oil imports and drug supplies, then said this would probably only affect a few companies here that depend on those sort of things. Go figure!

-- Gordon (gpconnolly@aol.com), April 25, 1999.

Hey Norm. I know less about economics than just about any other topic, admittedly. I am having trouble, however, wrapping my head around a subject that I read on this forum. I am a paramedic who also works in the purchasing dept of our local hospital (working extra jobs saving up for an emergency that might happen some time in the future?). I'll use the hospital as an example in my question. At this hospital, the management may decide to stock up on extra supplies in the event of supply shortages or outages. So assume that we normally use up X amount of supplies: syringes, gloves, IV fluids, etc in one month. So the management gets together and decides to purchase one months supplies in advance and in addition to what we normally use. So if Y2K turns out to be no big deal, and our patient census does not drastically change, then we can simply ride out the month of Jan 2000 using up the supplies that we purchased in advance. Our suppliers still make the same amount of money from us in two months that they would have, only they make it all in one month instead of two. The same amount of money, however, still changes the same hands from the same hospital to the same supplier. So, except for a few variables that I'm not seeing, but I'm sure exist, could someone please tell me how the economy can be adversely affected by stocking up on supplies. One might think that the economy would be boosted even further by all that commerce goin' round.

-- A.P. (grim2k@hotmail.com), April 26, 1999.

Before mind control it was normal for families to stock up for the winter...not much growing in the country during that time. Did you know that?

When I was a kid we always "hoarded" fruits and vegies for the winter.

Let me guess...the government is counting on grocery stores to purchase daily rations for a possible event. Don't think so!

Norm, I think the people are starting to think and this has the System Managers Worried, I think! You one of them?

-- Mark Hillyard (foster@inreach.com), April 26, 1999.

ah,the subjectivest standpoint.It's not that the code is broken,and that the embedded systems won't be fixed in time,it's that people will make decisions based on their own judgement and ask for THEIR money will crash a fraudulant banking system.If fractional banking is that insolvent,then maybe it's better that it crash and we move on...and if demanding what is rightfully yours makes you an "enemy of the people"like DeJager says,then the people have been lied to and it's time to start putting people up against the wall.

"Those that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." (Ben Franklin)

"If you believe everything you read, you better not read." (Japanese proverb)

"It is better to remain silent and be thought a fool than to open one's mouth and remove all doubt." (Abraham Lincoln)

"Most people would rather die than think; in fact, they do so." (Bertrand Russell)

-- zoobie (zoob@aol.com), April 26, 1999.

>"Worst-case scenarios see supermarket shelves being swept clean and drivers filling their garages and basements with jugs of gasoline to keep their sport utility vehicles running."<

Obviously, this guy has never heard of generators.

-- ExCop (ExCop@excop.com), April 26, 1999.

remember folks,until there are problems,we are merely "stockpiling".after problems start and people(pollyannas)get cold and hungry,they will become jealous of people who had the foresight to prepair,they will be angry at those who prepaired for not trying harder to convince them to take personal responsibility.Then the mob mentality kicks in,pollyannas no more they will feel entitled to the fruits of your labors suddenly your "stockpile" is now a "hoard" to be redistributed amongst the masses of sheeple.those people that said "christ will provide"really mean "you will provide"

-- zoobie (zoob@aol.com), April 26, 1999.

zoobie - you show your true self when you refer to people as 'sheeple' and brand moderates as 'pollyanna'. get a life please.

if you were intent on hoarding, you would be out doing it right now, not jaw-jacking on some stupid forum. I think you just hate your boring life and are hoping to 'rise to the top' in the aftermath...nice dream, harsh reality.

-- dislike for those contemptous of fellow man (.`.`@.`.`.), April 26, 1999.

On Christian "myopia" - preparation is a sign of lack of faith - e.g. "lilies of the field." I am reminded of the modern parable of the man of faith and the flood. As the flood waters reached his front door step, a large National Guard truck picking up evacuees came by. "Hop on board," the driver said. "No, thank you. God will provide," said the man.

As the waters covered the first floor of the house, a man in a boat came by. "Waters are still climbing. You better evacuate now," said the boatman. "I will take to to higher ground."

"No, thank you." Said the man in the house. "I trust in Him and He will provide."

As the man sat on his roof, waters lapped at his feet. A heliocopter hovered above him. Above the din of the rotars, a soldier yelled; "Grab the ladder !"

"No," shouted the man on the roof. "I am staying. I know He will save me. This is a test if my faith." After entering the gates of heaven, the man was ushered into an audience with his maker. The Lord said: "Joe, welcome home. There is so much to reveal to you."

Joe looked at his maker. "I am indeed wondering...I was faithfull to you to the end. Why did you forsake me at my final hours? I waited and waited for you, but the waters overcame me."

"My dear child," said the Lord, "your faith did not go unnoticed. I knew you were in great peril. So, I sent you a truck. I sent you a boat and I even sent you a heliocopter."

-- lessons (lessons@blindfaith.com), April 26, 1999.

I like my zoobie a l'orange under glass. Tastes like a cross between Spotted Owl & Bald Eagle.

zoobie - the ultimate polly?

-- Poacher (zoobiew@anna.crackuh?), April 26, 1999.

I'm currently working overtime so I can continue stockpiling my supplies.I am leaving the city so my stockpile does not become labled as a "hoard" as to my contemt for fellow man,yes,cynicism is a threat to our spiritual well being,a price we pay for choosing worldly life.But,y2k would not have as much potential to cause personal harm if people(masses) would take PERSONAL RESPONSIBILITY,alas,people are gregarious,social,group animals.It need not be with contempt to see how MAN is a herd animal.I have no doubt that if y2k preparation was the zietgiest then we'd all be down at the "watering hole" discussing better ways to store beans rather than the Packers,or who is sucking off the president,or if the non-conformists have had enough and plan to take some bastards with them.this is not the case,the masses are encouraged to not worry(and they won't T.V. has spoken)leaving only grassroots efforts like this one to wake people up,do you think the masses want to wake up? You can take offence at the word "sheeple" but that does not mean the word has no basis

-- zoobie (zoob@aol.com), April 26, 1999.

A wise company will recognize that a big increase in sales late this year could be Y2K related. A wise company will save some of this extra money to pay bills early next year if sales slow. An unwise company deserves whatever it gets. <:)=

-- Sysman (y2kboard@yahoo.com), April 26, 1999.

y2k/grifter companies will be non-existant next year. they will make a bundle, then go under and take the tax beeny's. win/win for them. the people they shafted? who cares. caveat emptor.

-- Long Time Lurker (NOYB@TTis.time), April 26, 1999.

yeah, right Zoobie-goobie! Don't make me laugh. Overtime? that's why you can spend all day in this nuthouse bantering the latest dehydrated baloney around? puuuhleeez. get a life.

I got rhino's to git.

-- Poacher (zoobiesm@kegood.eatin), April 26, 1999.

as an isp tech-support agent,idle web surfing is pretty much what I get paid for,and it's probably giving tech support to certian recurring personality types that I get my impatience with my fellow man.I'm very patient with customers,no one should be made to feel "stupid" for not being computer savy any more than not knowing about anthropology or how to drive a truck but your average person is really terrorized and intimidated by techno babble,which often seems to be needlessly thrown around just to confuse people.speaking as someone who does speak with hundreds and hundreds of BARELY computer literate people...the powers that be should be trying a heck of a lot harder to increase y2k awareness oh,well,nutbag conspiracies come to mind

-- zoobie (zoob@aol.com), April 27, 1999.