All the essential and non-essential things

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All the essential and non-essential things.

During the y2k repairs, many organisations and companies decided to focus on repairing the "core" or "mission critical" aspects of their systems.

This type of analysis will be made by consumers in a different way. America spends a lot of money on leisure activities or services. (Examples: vacations, home cleaning services, meals eaten out, evenings out, magazine and television).

To a travel agent (dealing primarily in vacation travel), a compliant system for accurately booking airline and hotel reservations is a core system. But if travel is not a core requirement for a population experiencing economic hardship???

The good news is that we have a certain amount of reserve if we just limit ourselves to the essentials.

-- Thom Gilligan (thomgill@eznet.net), August 14, 1999

Answers

Thom,

Yeah, the good news is that we can "cut back" to the essentials -- unless, of course, our employment is associated with one of those non- essential industries!

Here's something else to keep in mind: the Christmas shopping season accounts for as much as 50% of the annual revenues of a lot of retail stores. I know that the season starts earlier and earlier each year, but I think it's fair to say that it peaks during the period between Thanksgiving and Christmas Eve.

If it turns out that the population-at-large finally tunes into Y2K at about that same period of time, what are the chances that a family might decide to shift its purchasing resources from Furbie dolls to a case or two of Spam?

Similarly, if a certain percentage of yuppies start worrying about the likelihood of being unemployed in the first few months of 2000, will that decrease their Xmas spending, and will it also cause them to delay or cancel their winter vacation down on the Club Med beaches?

Here's another one to watch: Wall Street bonuses are usually paid out at the end of January each year, based on profits through the end of the previous calendar year. What will Wall Street look like at the end of 1999, and what shape will it be in to actually pay the bonuses in Jan 2000?

Ed

-- Ed Yourdon (HumptyDumptyY2K@yourdon.com), August 15, 1999.


I guess that for Y2K optomists, late fall/early winter this year and all of next year would be a great time to buy Disney stock. Now I'm not a Y2K optomist. But I'll throw out a few thoughts on what impacts a "mostly economic" Y2K will have.

When it's all said and done I see where entire industries will be destroyed or at least decimated. Travel/tourism is an obvious one. When your every penny and effort goes towards keeping fed and sheltered, you can only dream of vacations.

What other "non-essential", entertainment activities will be dropped form America's lifestyle? Broadway shows and major sports events each with ticket prices at or near $100 a seat look like dinosaurs. Home internet hook-ups, cable and satellite TV, cellphones & beepers, even home phone service are likely to be dropped by lots of households who are belt-tightening.

Then there's the world of disposable income, "spur of the moment" purchases which so many businesses are now geared for. How empty will the malls of America be if there are no disposable dollars to be spent there? Nail and hair salons, book and record stores, just jeans and just sneaker stores, hobby and craft stores, the list goes on.

It's interesting to me just how much of our economy has become oriented towards catering to non-productive uses of peoples time. And now here comes Y2K to re-prioritize the economy. The results will be long-lasting in any Y2K outcome. If we see Ed's recession then I'll say we won't see Disney as part of the Dow Jones benchmarks. If what I see comes about, well don't worry about the stock market for a generation or two.

WW

-- Wildweasel (vtmldm@epix.net), August 16, 1999.


Agreed, on all accounts.

However, WW, do remember that, short of a 10, there will be people with money. The chances are, it will help them make more money. Conspicuous consumption is a VERY old fact of life. Those who have it will flaunt it, unless there are very strong social/legal sanctions against doing so. (At one time in what is now the Netherlands, I believe, an attempt was made to regulate what styles and fabrics could be worn by the various "classes", to keep the *newly rich* from getting above their station...)

Look at Russia today. Money can be made as easily (by the bold, the well connected and the ruthless) in a collapse even easier than in a strong economy.

-- Jon Williamson (jwilliamson003@sprintmail.com), August 17, 1999.


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