My family discusses who we would like to spend an evening discussing y2k with over a six-pack. Of the many names that come up, Yardeni certainly is near the top.

In a long discussion with Ed Yourdon about his letter you said that Yardeni believed in a 100% probability of a recession, yet dumbed it down for the public. Could you fill in a little detail on this? I'm sure Andy and some of the stockwatchers would appreciate more as well.

As noted before, I like your directness. You are refreshing if not crazed.

-- Dave (aaa@aaa.com), September 20, 1999

Answers

Ed Yardeni, in private, stated that he believed in a 100% chance of a recession due to Y2k. I would violate a confidence if I stated who told me this. The reason that i do not violate a confidence as far as the substance of the issue is that Yardeni himself confirmed it in a conversation of ours.

He said that he would say that there was a 30% chance of recession and then ratchet it up, over time to 100%. The purpose, he stated, was to MAITAIN his credibility. No one , you see, would accept a substantially higher number in regard to Y2k, making him seem a kook. So, he allowed his message to be skewed and distorted by his perception of what his listeners would find palatable.

In my book, this is no more than a bald faced lie. If my wife asks how I liked the meatloaf, I can say that it was great even though it was lousy. This does not apply in the context of Y2k.

His credibility would only be maintain if no one knew that his posture was otherwicse. in other words, those ignorant of his true belief, would find him credible. What credibility does he have in the eyes of those who know that he is lying? None.

Second, he flat out stated last year that after the Group of 7 meeting he would ratchet up his estimate if they did not 'Declare war on Y2k". They did not and he retreated from his promise.

Yardeni has a position to protect. His master is not the truth. You *DO* recall what happens when you serve two masters, don't you? You either love the one and hate the other or vice versa.

The truth is what is important. But not important enough for Yardeni.

-- Paul Milne (fedinfo@halifax.com), September 20, 1999.

Thanks. While I concur with almost all of your points and very much appreciate people who call them as they see them, it is arguable that Yardeni was using his best judgement on how to be most effective. In reality, it is my opinion that he decided he was far enough out on the limb and that any further would represent an unnecessary risk to his career in the event of a BITR (i.e., you're right).

-- Dave (aaa@aaa.com), September 21, 1999.

Paul Milne said:

"Ed Yardeni, in private, stated that he believed in a 100% chance of a recession due to Y2k. I would violate a confidence if I stated who told me this. The reason that i do not violate a confidence as far as the substance of the issue is that Yardeni himself confirmed it in a conversation of ours."

This is an exceptionally confusing statement. At first you say that someone in confidence told you of Yardeni's 100% recession odds. Then you say that Yardeni confirmed it in a conversation you had with him. Why not simply say Yardeni told you this personally?

Another curiousity is when this conversation took place. Was it before or after the infamous VNU story that misquoted Yardeni saying there was a 70% chance of depression? Seems to me, as I recall, you went off on Yardeni as if you believed the information in that story to be correct, which, of course, it was not. Had you already had the conversation with Yardeni in which he confirmed his 100% recession odds, you would have clearly known that.

-- Barry Collins (Hiway441@aol.com), September 21, 1999.