What will we know, and when will we know it?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I'm not a polly, but clearly Y2K is not all or nothing. The longer we go without bad news after the 1st, the better the situation has to be. Along that line of reasoning, my predictions follow.
Based on current surveys and normal reaction to things like hurricanes, we will get the usual last minute preps in the days before 12/31. Stores empty out. Probably a run on ATMs, possibly a bank holiday if it gets bad (or banks offering just travelers checks, instead of cash.) Probably a gas shortage, causing endless trouble for holiday travelers. Government pleas to stop "hoarding". Not a real panic though, based on what a joke Y2K has turned into for the general public. The real action starts on 12/31.
In my mind, the only thing that can cause a 10 (starving in the dark, looting by roaming bandits, etc.) is a long-term failure of utilities, particularly electricity, water and communications.
Given that there will be workarounds for Y2K system problems, the only thing that could allow long-term utility failures is a state of complete panic, so bad that even martial law does not allow engineers to get back to work. This strikes me as next to impossible. Oil shortages are possible and could do serious economic damage, but not a collapse of basic services. There are reserves, and domestic supplies. A depression might result, but not a 10.
So if the lights don't go out on 12/31, it's not a 10. If you don't hear about lights off in Japan during the evening of 12/31, it's probably not going to happen in the U.S. or Europe either. Enjoy your New Years party.
A short power failure could cause some rioting, arson and significant property damage. Needless to say, the longer power is out, the worse this kind of damage will be. If the lights do go out, I would hunker down in my home and wait it out. Given that you won't know if this is a bump in the road or the beginning of the end, expect a long night.
On the 1st, wake up and turn on the TV (assuming power is on). The reports will cover any power outages, refinery/chemical plant explosions, etc. All due to embedded systems failures. One sleeper will be water system failures. These won't be immediately obvious, and there may not be an announcement. It could take a couple of days of improvising behind the scenes before a water utility admits to being out of service. If there aren't any utility failures, then there probably will be no fatalities due to Y2K. But wait for the economic impact!
You probably won't hear about the less obvious embedded systems failures until later in the week. This includes refineries, power plants, etc. shut down to avoid disaster at rollover. Some of these will take a long time to restart. (I've read estimates of 90 days for refineries, or "when the weather warms up" for pipelines.) The more of this there is, the worse the economic impact. The economy could definitely handle a six-month drop of even 20% in electrical supply or oil though (working suppliers would run at higher capacity.) So it will be hard to distinguish serious from annoying based on these news reports.
On Saturday and Sunday, deliveries to stores and gas stations would be reassuring, but not a definite indication that supply chains are OK. There is probably a couple of days worth of supply in the system, even with previous stockpiling.
Look at reports on shipping, trucking, FedEx/UPS, airlines, and especially the Post Office. A week of downtime by any major form of transport probably means a recession. 3 weeks means a severe recession.
See if your local Safeway is getting deliveries. Check out the superstores like WalMart. If anyone is getting service, they will be. And since they get supplies from so many companies, you should be able to practically take inventory of the entire economy by walking the isles.
On Monday the 3rd, banks and stock exchanges should be opening, and we'll see if they have their act together. Again, Asia opens first. If their banks or exchanges are a mess, expect a bank holiday worldwide. If they aren't open for business by Wednesday (I guess), expect a recession. If they don't open at all during the week, expect a severe recession. If it gets bad enough (cascading cross-defaults), expect governments to step in and offer credit like its going out of style. That will let each solvent institution open up when ready, backed by government guarantees. At some point, the laggards get closed by regulators. Of course, the regulators are currently promising us that there will be no systems failures in banks or exchanges. So they will open Monday and only crash later due to foreign system failures, or customer failures. Same story, only months later.
It will probably take at least a couple of weeks (maybe a couple of months) to size up the extent of supply chain disruptions. Large companies will have some stockpiles. It took GM something like a month to shut down completely due to that strike last year. And it didn't have a really huge effect on their bottom line. This is assuming that big company systems are intact, and it's only a problem in the small and medium sized companies. This is the best we can hope for, even based on the current happy-face reports. Look for big companies to send their IT staffs out to suppliers to fix their systems. Some of that has already been done.
A general slowdown in the economy for two weeks probably only produces a recession. As delays stretch out, expect small businesses to start layoffs, followed by bigger companies with more reserves. Eventually, the small companies fail, personal bankruptcies follow layoffs, spending contracts and we're into a deflationary spiral. Mortgages are going to be a particular problem, since so much credit has been issued in the last couple of years. A 95% or more mortgage leaves so little equity in the house that it really will make sense to just walk away and give the house to the bank.
Governments probably keep slogging along despite failures, though they might be slow to issue checks to suppliers and employees (messed up accounting systems.) Benefit checks will be their first priority.
Any problems with Medicare funding will probably be handled with emergency grants to hospitals, etc., based on the amounts billed during the previous year. Lots of hassles, but no mass closings of hospitals. Same thing with Social Security. The priority will be to get some money to recipients, and to patch up systems as quickly as possible.
The financial reaction to all this is anyones guess. Even if you think current stock prices are reasonable, a Y2K slowdown should cut profits and sales, cutting stock prices. If you believe current prices are a bubble (I do), then Y2K should eventually pop the bubble. Of course, if utility failures are minimal, and banks/exchanges are up on Monday, there could be a surge, until supply chain failures become obvious. On the other hand, it could crash before the end of this year for non-Y2K reasons, or at the end of the year if Y2K panic gets serious.
Some of the stuff I read says that the U.S. trade deficit is being funded by dollars coming back from foreign investors into the U.S. stock market. If stocks drop, for whatever reason, the dollar should drop due to inability to finance the trade deficit. If it looks as if this is going to happen, foreign money would leave to avoid getting clobbered. The U.S. would be a victim of hot money flows just as Asia was last year. So it wouldn't take much bad news to cause an outflow, either before or after Y2K. On the other hand, a slowdown or a stock drop would reduce U.S. imports, which would remove some of this pressure. Also, the U.S. might be regarded as relatively Y2K safe, especially by Japanese investors.
If Y2K does cause a serious recession, I would worry that the U.S. budget would go into deficit. There are only three ways to fund this deficit -- raise taxes, borrow the money, or print the money. Raising taxes during a slump is going to be impossible, and borrowing it might be. If the whole world is in recession, it's not clear to me that anyone would want to lend to the U.S. at reasonable interest rates. Of course, if the slowdown is deflationary everywhere, then interest rates would be low and there would be no problem borrowing. But if there is, then I would expect the U.S. to resort to printing the money, both to reduce the burden of transfer payments, as a way to avoid deflation and jump-start the economy. This is what some economists are recommending for Japan now.
Finally, the reactions of the public are anyones guess. Will there be runs on supplies or cash at the end of the year? (according to surveys, yes.) Will there be panic at rollover? (if there are even short power failures, I would think so.) If there is a bank holiday after the first, to get systems back on line, or to coordinate a response to international liquidity problems, I would think people would take it badly, and demand even more cash. If there's a drop in confidence, that alone can contract the economy. Any serious contraction should drop the stock market. If it's overvalued, it should drop by quite a lot, feeding back into this whole mess. And of course the media will be feeding the frenzy if there's anything dramatic to report.
But all of this could (probably will) play out very strangely over the first few months of the year. With the right circumstances, we could see a real roller-coaster. A crash in the stock market this year, followed by a surge if Y2K looks minor in the first week, followed by another crash when supply chain problems become evident. Then serious inflation as the government tries to liquify its way out of debt and restart the economy. Then an election to top it all off.
It would be really useful to have a roadmap of possibilities for the first six months of next year. I encourage you to add your predictions, in the form of "if A happens around date X, then it means B." Let's avoid the usual rants, please.
-- Michael Goodfellow (firstname.lastname@example.org), October 03, 1999
that even martial law does not allow engineers to get back to work. This strikes me as next to impossible. Oil shortages are possible and could
Do you remember the Watts riots in 1965? I do...the rioters were shooting the firemen right off their ladders. I thought that as things got closer to rollover there would be news coming in that would make me rethink my position of an 8. It has caused me to rethink...I am closer to a 10 now. If only half the things that you predict happen it will cascade into a 10. Everyones computer doesn't have to go down...just the main frames and from what I have been reading, too many are going to go down.
-- Taz (Taz@aol.com), October 03, 1999.
I have over 800 pounds of Sam's popcorn stored in my bonus room over my garage for grinding with my Amish grinder. It makes good hush- puppies and corn pancakes. It keeps for years. If my house catches on fire during the riots, how high will the white mound be. Is it edible? On a serious note, here is how I think this is going to play out. It will be just like the "Godfather" story. After his dad died, Mike Corleone' elimnated the five NY mafia families and got his total revenge in one night. He killed them all. On or about November 15th, Yasser Arafat is going to tire of the stall technique and declare Palestine a free and independent state. He will claim old Jerusalem and the Muslim Holy Temple site as Palestinian forever. To celebrate this, Osama Bin Laden and the two eldest sons of Sheik Omar Abdel Rahman will detonate a Chechniyan Russian suitcase bomb in front of the United Nations. (World Tribune August 9th.)+(Revelation Chapter 18) This will kill or injure 800,000 Jews. Within 48 hours, all five of the rogue nations will be eliminated forever. Tripoli, Damascus, Bagdad, P'yongyang, and Tehran and all people in them will be vaporized. It will take 10 years to clear up the rubble. We will survive somehow and freedom and democracy will prevail.
-- don (email@example.com), October 03, 1999.
Don: I am curious what the source or basis of the predictions you wrote? And why November 15th or thereabout? So many predictions around for this ominous year!
-- wondering (firstname.lastname@example.org), October 03, 1999.
Say! Now THERE's an image to curdle your wrigglers...you awaken and hit the ol' remote and nothing appears but snow...you get up and turn on the light and it doesn't work. Hmm...it certainly is cold in here... You go to the window and nothing is moving outside-and it's REAL DARK. You turn on the radio and all you get is static and a FEMA message here and there that repeats: "Remain calm, there is no problem..." Then you hear a faint crack! Was that a rifle?
-- chairborne commando (email@example.com), October 03, 1999.
Not a chance with Komrad Klintonoff in command. The Arabs might get mad at us and shut down their oil exports to the US.
-- Elskon (firstname.lastname@example.org), October 03, 1999.
the Arabs have no choice but to stop imports, especially if they can't get them out of the ground and shipped to us.
-- Porky (Porky@in.cellblockD), October 03, 1999.
Michael: I see things a bit differently than you do. I don't expect much to happen on January 1, 2000 or shortly thereafter, so if most things seem to be working it doesn't tell me anything in particular. What I do expect is a gradual but increasing number of failures everywhere as the corrupt calculations of thousands of non-compliant systems spew out bad data. In other words, I expect conditions to worsen as January goes on, getting worse in February and even worse in March. The question is how many critical failures can the economy and the culture absorb before it all goes belly-up?
The other fly in the ointment is the oil industry, which is reported to be crammed with embedded systems at all levels, from drilling to refining, and which has apparently decided to fix on failure. We do have reserves here but how long will they last if our oil supply is cut off for a year, as is quite possible?
-- cody (email@example.com), October 03, 1999.
Don, I suggest you look into the wisdom of grinding popcorn. I have read before that this is not a good source for corn meal as it is different type of corn. You don't want to be stuck with only one type of corn if it is the wrong kind.
-- smfdoc (firstname.lastname@example.org), October 03, 1999.
We have our imaginings based on a mix of fear and hope, but NO ONE KNOWS. Prepare for the worst, hope fot the best.
-- Mara Wayne (MaraWayne@aol.com), October 03, 1999.
And there is, of course, the interplay of the "home fort" mentality. If some portions of the infrastructure appear to be malfunctioning, am I going to risk comuting to work? Will I leave my family? Will I risk being stranded in the city? Will I risk being caught in city chaos and violence? Will I want to waste my precious gasoline on a comute? If enough workers did this, who will repair the problems that the companies plan to "fix on failure"?
I predict that if there is even one major infrastructure problem in an area, there will be a "cascading cross default" based on the human element of free will. Working mothers will not be dragged from their homes if their children could be in jeopardy. (This probably goes for men too, but I am not a man so am not sure.)
-- marsh (email@example.com), October 03, 1999.
You made some excellent points in your post, although, just because the lights remain on 1/1/00 doesn't mean we are completely out of the woods. I tend to believe that the effects of y2k are cumulative, gradually getting worse as we move into the new year. That's just MHO though, but don't become complacent on Jan 1st if you have power. I really appreciate your advice about checking on the deliveries to Wally World and other major retailers. It's probably a good idea to start checking sooner like in November and gauge any problems that may arise. A stock market crash may occurr sooner than jan 1st, so keep your eyes on the market numbers. I've only been posting here since today, but have been "lurking" for a couple of weeks. I have got a lot of information on y2k preps from this forum. I hope I will be able to make a contribution.
-- Bill Stievers (firstname.lastname@example.org), October 03, 1999.
Let me congratulate,and thank, you for an excellent summary/sample/introduction to the kinds of analyses that we need to get the habit of doing as we approach the rollover.
As has been mentioned many times, we do not know what will happen. There are many possible scenarios. It would seem, therefore, that we need to try calmly to think through various plausible scenarios, what kinds of early indications each may have, and what kinds of implications each may have.
Such contemplations will be open to error, as will any approaches that we may take, but they may nevertheless help us in gauging events as they occur, and in adapting our actions as appropriately as we may, as events unfold.
-- Jerry B (email@example.com), October 03, 1999.
I expect things to be very uneven depending on where you are. If you have the misfortune to be near a plant that uses chlorine gas in its processes you could easily be dead before you had a chance to check the light switch.
If you are somewhere else everything could seem "normal" for days or even weeks.
The only thing I am sure of is a baby boom in September 2000 as well as a serious rise in STD infections. STDs which will be impossible to test for, let alone treat. There will be masses of hungry abandoned children and packs of ravenous dogs who used to be pets.
For those who survive there will be lots of clean up to do. Lots of children to take in. Lots of pregnant young women to protect. Lots of dogs to shoot.
Its a dismal picture I know. If you want to survive in Y2k be prepared to love big. Without our children we are nothing. Without our children we are truly doomed. Loving everone's children is the only way to create a loving society. I, for one, don't really want to live in any other kind.
-- R (firstname.lastname@example.org), October 03, 1999.
Good points, Michael and sane responses. Just as well you did not send this out on Friday or last night! There must have been an early run of Animal Farm.
I am more in agreement with the respondees Cody, Mara, etc. who think there will be a cumulative effect. I also think there will be places of calm and places of chaos. I was living in Detroit in 1967 and my kid was in LA during the unfortunate Rodney King mess. Better to prepare and give some provisions to the food bank.
-- Nancy (email@example.com), October 03, 1999.
Your reasoning and guesswork seems sound enough. I hope things are as mild as you prognosticate. Certainly, if people remain largely calm and blaze' re: the rollover and if there's no big terrorist attacks, we can look forward to "only" a recession.
I've got a bad feeling about gas and oil imports, though. I've got a bad feeling about imports, in general. A mild inventory recession + stock market correction is INEVITABLE here in the states already. What will make the economy worse are severe show-stoppers in international trade.
The wild cards are if the power stays on (prob'ly will) and if we aren't subjected to horrible terrorist attacks (maybe--if they believe that we will be reeling from computer problems, riots).
I suspect very strongly, by reading between the lines in government statements and reports, that y2k's impact has been downplayed for national security reasons. We don't want any terrorists to get the idea that we will be blind, deaf, and dumb after 12/31. If national security is at stake, I have little doubt that we will be told that the infrastructure will hold just fine when, in fact, it will be foundering.
-- coprolith (firstname.lastname@example.org), October 03, 1999.
If discussions of national rationing plans for gasoline begin to appear, take it as confirmation of severe disruptions. In WWW2 the basic allotment for a private car was 3 gallons per week.
-- Tom Carey (email@example.com), October 04, 1999.