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This is from the Dallas Morning News. Any Comments. Seems contrary to recent information.Study finds 94% of S&P 500 firms on track toward Y2K goal 06/04/99
By Alan Goldstein / The Dallas Morning News
Corporate America appears well on its way toward being prepared for the millennium bug, with 94 percent of companies in the Standard & Poor's 500 index expected to have their computer systems compliant by September, a leading investment strategist said Thursday.
Overall, the total bill for S&P 500 companies, which began repairing and replacing computer systems several years ago to fix Y2K problems, is expected to reach between $34 billion and $35 billion, said Peter J. Canelo, U.S. strategist for Morgan Stanley Dean Witter & Co. in New York.
Though the figure represents a substantial investment, it still amounts to only 0.7 percent of revenue for the past 12 months at large publicly traded companies, said Mr. Canelo, speaking with reporters before presenting his new Y2K report to investors in Dallas.
Morgan Stanley Dean Witter gathered most of its data about S&P 500 companies by studying filings with the Securities and Exchange Commission. Total public and private spending in the United States is expected to reach $80 billion to $86 billion, the report said.
The Year 2000 problem was created in the late 1950s when programmers sought to use two-digit shorthand to represent years in computer data. But if computers go unfixed and read 2000 as 1900, that can cause serious problems.
The risk of a recession induced by the Year 2000 problem is diminishing, Mr. Canelo said, as companies and governments have grown more serious about making their systems compliant. He now estimates the chance of a Y2K-induced recession at less than 10 percent.
The federal government's critical systems are 92 percent compliant, Mr. Canelo said, which is farther along than he had expected.
The chance that the millennium bug could cause a bear market is also minimal, Mr. Canelo said, given the expected state of readiness.
Mr. Canelo said he is increasingly confident that critical service companies are well prepared for the Y2K problem, including providers of financial services, electricity, telecommunications and transportation.
Less-prepared companies tend to be smaller and have minimal impact on other businesses, Mr. Canelo said.
The main beneficiaries of all the investment in Y2K remedies have been technology companies, Mr. Canelo said. "What appears to have happened is a Y2K bubble was created in demand for applications software, personal computers and servers."
But Mr. Canelo said he thinks many observers of high-tech companies who have been predicting a "nuclear winter" for computer and software makers later this year are misguided. The theory is that sales will freeze as companies lock down their systems to wait for the new year.
Mr. Canelo said he does not expect a freeze, in part because the technology industry itself is diverse enough that specific product categories are exposed to Y2K issues in varying degrees.
Once companies achieve Y2K compliance by the fall, as expected, financial resources will become available to meet pent-up demand for deferred projects, leading to renewed spending in early 2000, he said.
Concerns about lower Y2K preparedness overseas, particularly in China and certain other parts of Asia, will lead companies to stockpile inventory of components and raw materials later this year, Mr. Canelo said.
But as concerns about Y2K problems in other parts of the world spread, Mr. Canelo said, U.S. investments could benefit if they are perceived as a safe haven.
--------- Appreciate your comments.
-- newlurker (no@no.com), June 04, 1999
The key word here is "expected."Corporate America appears well on its way toward being prepared for the millennium bug, with 94 percent of companies in the Standard & Poor's 500 index expected to have their computer systems compliant by September, a leading investment strategist said Thursday.
It had also been expected that many of these companies would be compliant by December 1998.
-- Linkmeister (link@librarian.edu), June 04, 1999.
94% were going to be done July 1st. We just moved the finish date again. Or was that dec.31st 98, or end of march 99?
-- FLAME AWAY (BLehman202@aol.com), June 04, 1999.
Morgan Stanley Dean Witter gathered most of its data about S&P 500 companies by studying filings with the Securities and Exchange Commission.The commonly used term is "self-reported."
-- Linkmeister (link@librarian.edu), June 04, 1999.
Read this threadMommmmyyy! Are we THERE yet?
-- Dennis (djolson@pressenter.com), June 04, 1999.
While stockpiling extra parts etc. that are necessary to business for after the first of the year, it is inconceivable to me that there will not be at least a recessionary influence on business in general. Look what a minimal 4% drop in oil did in the '70s. Add that to the number of times (anyone count how many?)the Y2K issue was noted as being the cause of why the NYSE is postponing both the digitalization and the addition of trading hours until we "get through the Y2K rollover" would certainly lead me to believe that all things are not right in the marketplace.
-- Valkyrie (anon@please.net), June 04, 1999.
So Triaxsys and Weiss came out with real SEC numbers and said 'tain't good dears'. So a few weeks later Morgan comes out with a counter report for the gang to use against the previous reports. Now its report wars.Transparent, ain't it???
Head em up...move em out! rollin rollin rollin, keep them doggies rollin ... rawhide! (done with suit and dark glasses).
-- -. (dir@dash.dot), June 04, 1999.
Like Cap Gemini, Triaxsys, Weiss, etc., Yardeni also paints a rather darker picture of the Y2K status of the S&P 500 than does Mr. Canelo. And Yardeni studies SEC filings in great detail; see his website at www.yardeni.comI guess you pick your "expert" and you take your chances. By the way, refresh my memory: what business is Morgan Stanley Dean Witter in?
For the sake of the S&P 500, I really do hope Mr. Canelo is right. See my earlier thread on the whopping overvaluation of S&P 500 stocks, according to the Federal Reserve's own valuation model. These boys can't stand any shocks right now--it might give the game away.
-- Don Florence (dflorence@zianet.com), June 04, 1999.
Another important factor may turn out to be how important imports are to the functioning of the S&P 500:"The Year 2000 Problem And The Global Trading System"
-- Linkmeister (link@librarian.edu), June 04, 1999.
Snip:"94 percent of companies in the Standard & Poor's 500 index expected to have their computer systems compliant by September, a leading investment strategist said Thursday."
Let's see, originally 100% of ALL S&P500 companies were supposed to have 100% of their remediation done by 12/31/98 thus leaving a full year for testing. Does anyone detact a problem here?
Peter Canelo is a SHILL for the Investment Industry, guess he decided to do a little SHILLING in the y2k area.
Ray
-- Ray (ray@totacc.com), June 04, 1999.
Ray wrote:"Let's see, originally 100% of ALL S&P500 companies were supposed to have 100% of their remediation done by 12/31/98 thus leaving a full year for testing. Does anyone detact a problem here?"
As a matter of fact, Ray has several problems here. Let's see if we can help him think. Lord knows he needs it.
1) Perhaps a dozen S&P500 companies announced a schedule that had their remediation completed by end of 1998. (Of course, Gary North found everyone of them and harped on it endlessly). But a dozen is more than Ray can count on his fingers, and apparently anything higher than Ray can count becomes "100% of ALL". I don't think Ray is lying deliberately here, he just can't tell "more than his fingers" from "ALL".
2) The "finish remediation completely before doing ANY testing" approach isn't descriptive of anything that really happens. Over the course of the project, systems are in every stage of assessment, remediation, unit testing, system testing, and returned to production. It all happens at once. At best, a few companies hoped (such schedules are no more than hopes) that all further code fixing during 1999 would be fixing bugs that showed up in testing. Not many companies achieved this, to be sure.
3) More importantly, these (few) companies were talking about "a full year for testing." Since you can't declare compliance until you've tested, this means a full year of testing takes them right up til rollover before they're compliant. Yes, that was their original schedule. NOW, they're saying they'll be compliant in September. This is 4 months ahead of schedule. Problem? Hardly.
Is it possible that Ray 'forgot' about that little testing step that falls between remediation and compliance? If "all of 1999" is to be spent testing, shouldn't we expect testing to continue throughout the entire year?
Realistically, how likely is it that only 6% of S&P500 companies will have completed testing in September? When is testing complete anyway? We can only hope that they continue to test for the full year, even after they think they've found all bugs. You never know when you might find another.
-- Flint (flintc@mindspring.com), June 04, 1999.
Flint, Yada .... Yada .... Yada .... Never changes. As time passes your arguments get weaker and weaker.Misleading folks as you have done for SO LONG gets more and more difficult.
Your Pal, Ray
-- Ray (ray@totacc.com), June 04, 1999.
Ray:If *that's* the best you can do, why should anyone worry? When the doomists are reduced to clear distortions and empty attacks, their arsenal is getting mighty thin.
A word of advice: If you read what I write *before* your attacks, you might actually find something to say. Just a suggestion.
-- Flint (flintc@mindspring.com), June 04, 1999.
Flint commented:"A word of advice: If you read what I write *before* your attacks, you might actually find something to say. Just a suggestion. "
Flint, tried that but discovered what many before and after had figured out Yada .... Yada .... Yada.
BTW do you realize that the folks being quoted in the article are Wall Street SHILLS trying to right a sinking ship. These folks would sell their souls for one more Bull Market Leg along with their grandmothers
Your Pal, Ray Your Pal, Ray
-- Ray (ray@totacc.com), June 04, 1999.
(1) The author says that he sees a decreased probability of a recession. That COULD be interpreted as an INCREASED probability of a depression.(2) Author admists that his "research" is just reading readiness in quarterly SEC reports...he has not queried the companies as Gartner Group has. Therefore, I trust their research more than his lack of research.
(3) Author does not evaluate change in readiness and percentage of total budget spent. Both are more interesting than what he did look at.
(4) Author's organization is a stock brokerage that makes its money by getting investors to "see the value" in stocks. Got credibility?
-- Mad Monk (madmonk@hawaiian.net), June 04, 1999.
Mad Monk:Gartner is a puzzle, probably because it's a bunch of people with different opinions, like you'd find anywhere. Paul Milne has been consistent, though. Every Gartner report of bad news is gospel, and every Gartner report of good news proves they're all idiots. I personally wish Gartner were more consistent, but I must regard their inconsistency as a reflection of many variables -- the complexity of the situation, the identity of the surveyor, the nature of the questions, the timing of the survey, and many more.
I'll point out, though, that asking companies directly generates self- reporting, while SEC reports are legal documents and binding. No company has to stand behind anything they tell Gartner. But I think you'd tire after a while, of regarding Gartner as accurate when their numbers agree with your beliefs, and regarding them as mouthpieces for CEOs when their numbers don't.
-- Flint (flintc@mindspring.com), June 04, 1999.
"Will Corporate America Beat Y2K Deadline?"http://www.webcom.com/yardeni/y2kbook_part2.html#2.B5.1
-- Linkmeister (link@librarian.edu), June 05, 1999.
* * * 19990605 SaturdayRe: GartnerGroup credibility.
Status: LOST!
Date of Status: January, 1999!
Reason: US Congress HIRED GartnerGroup to provide reports "directly."
Result: CONFLICTS in reporting from GartnerGroup dependent upon who the client ( payor ) is and what they WANT to hear.
That's the way business as usual is conducted. ( E.g.: My Y2K status reports were always filtered of their "problem issues" before reaching upper echelons of management with virtually only the problems that had been resolved. You know, only solutions score brownie points. )
[ Note: Others that are/have working/worked Y2K projects know this dirty little secret!?! Don't we!?!?]
Regards, Bob Mangus
* * *
-- Robert Mangus (rmangus@hotmail.com), June 05, 1999.
Bob Mangus:Exactly correct. Whoever pays the piper calls the tune. If anyone thinks any of these statistics are collected by 'objective' organizations, all they have to do is realize that surveys aren't free. Someone pays for them. Find out who, and you'll know the results without reading them.
-- Flint (flintc@mindspring.com), June 05, 1999.