Social Security, banking systems not Y2K readygreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread |
http://www.worldnetdaily.com/bluesky_bresnahan/19991022_xex_social_secur.shtmlPANIC IN THE YEAR ZERO
Social Security, banking systems not Y2K ready
Congressional testimony sheds doubts on fiscal preparedness for year 2000
------------------------------------------------------------------- By David M. Bresnahan ) 1999 WorldNetDaily.com
Thousands of repairs are still needed in order to get Social Security checks out on time in the new year, according to recent congressional testimony. Despite ten years of preparations, the Social Security Administration is still not ready to deal with the Y2K computer glitch.
The banking system is also not ready, while the major Fortune 1000 companies still face major Y2K-related disruptions, according to recent reports.
"The Social Security system is now 100 percent compliant with our standards and safeguards for the year 2000," said President Bill Clinton last December. Recent testimony would indicate that the American public has been deceived.
After the president's declaration there was a great deal of bragging about the agency. They were held up as a great example of what a government agency can accomplish. The SSA began work on the Y2K computer problem in 1989, long before other government agencies.
President Clinton assured older Americans that they have nothing to worry about. Social Security checks would arrive on time after Jan. 1. The Y2K bug would not bite the fixed income of America's elderly, he assured the public.
However, some say problems could emerge. "SSA's work is not yet complete," said Joel C. Willemssen when he testified recently before a committee of the House of Representatives. "Certain tasks integral to ensuring its overall readiness for the year 2000 must still be accomplished," he added, directly contradicting the president's statement.
Willemssen is director of the Civil Agencies Information Systems Accounting and Information Management Division. His warning should not be taken lightly. His statement means parts of the system are not yet Y2K compliant, ready, fixed, or even prepared. Yet the unprepared parts of the system are critical to getting checks out on time, for the correct amounts and to the right people.
One of the problems involves "data exchanges," he said. This is information sent to and received from other agencies and organizations which are known to be less than Y2K ready themselves.
Willemssen also expressed concern in his testimony that contingency planning has not yet been completed. Social Security payments may not get through because of banks that have Y2K disruptions.
"SSA plans to assist Treasury in developing alternative disbursement processes for problematic financial institutions," said Willemssen.
As of July 23, 1999, SSA tested 92 percent of its mission critical applications. Those tests, according to their own reports, revealed 1,565 errors that needed to be fixed. Those errors were found in 283 out of 308 mission-critical systems. Of the 1,565 errors found in those 283 systems, only 44 percent were repaired at the time of the report.
Social Security checks are scheduled to be delivered to local post offices on Dec. 29, 1999, to avoid potential delivery problems after Jan. 1, 2000. Many payments are to be made by electronic deposit and will be transmitted to banks directly before the new year begins. That may serve as a good contingency method of delivery for the January payment, but the same solution will not work for February and beyond if there are Y2K problems at that time.
Banks transfer funds electronically every day, and even if an individual bank functions well within its own walls, the ability to transfer funds back and forth with other financial institutions may be in doubt.
The Bank for International Settlements (BIS), Basel, Switzerland, is the central bank for all other central banks in the world. They are not as cheery about the Y2K outlook as most local banks have been.
"Some problems will be missed," predicted a recent report from BIS, which was sent to other banks. "New problems will be missed; new problems will be inadvertently introduced via the remediation process; even the best test programs may not detect all potential errors; uncertainty will remain up to and after Jan. 1.
"In other words," the report concluded, "it is inevitable there will be Y2K disruptions, although it's not possible to predict how serious or widespread this disruption will be."
The report details the threat of a breakdown of the inter-bank payment system, and clearly states there is no backup.
"Y2K is unlike any other disruption problem where identical backup sites can be activated. But any uncorrected Y2K problem is likely to affect both sites, so the backup would not be a contingency," warned the BIS report.
Individuals who do not engage in transferring funds from bank to bank might be impacted greatly by the problem because businesses and the availability of funds depend on it. Transactions all over the world could be brought to a halt, and with it there will be a halt in business and all types of commerce.
"The inability of a major payment and settlement system to function smoothly, or have procedures for isolating problems, will intensify uncertainty/concern," said the BIS report. "In the extreme case, this could have repercussions throughout the global and domestic systems."
The BIS report advises other banks to get the home phone numbers of regulators and government officials so they can be contacted at night or on weekends to discuss the prudence of "closing markets and declaring an emergency financial bank holiday."
The BIS report needs to be taken seriously. The Social Security checks are not the only financial transaction that are in danger. The world economy is a risk, according to some financial experts.
Financial advisor and author John Mauldin has been warning of a financial recession in America and a depression in much of the world after the first of the year.
The signs are all there. As the last few days of the year slip by, more and more government agencies, commercial businesses, and infrastructure systems will begin to issue revised statements of their Y2K readiness to protect themselves from inevitable law suits next year.
The truth about the BIS report and the failure of the SSA to be ready for Y2K after 10 years of preparations should be more widely reported than it is. If the concerns expressed by Willemssen and the BIS report were made known to the general public, Mauldin believes the public would be better prepared to face the financial difficulties he predicts will come in the new year.
Mauldin points to recent reports by the Security and Exchange Commission, as well as a survey by respected researcher Howard Rubin's Rubin Systems, Inc. The SEC and Rubin report that American businesses are not fully prepared to deal with the Y2K computer problem in a survey of the Fortune 1000 companies.
The most significant finding of the Rubin survey is that 48 percent of the respondents said they will have all their mission-critical systems tested and compliant by New Year's Eve. That means a full 52 percent will not be ready!
Mauldin says that if just 5 to 10 percent of all companies lose business we will have a recession next year. Many of the top Fortune 1000 companies are already becoming less optimistic about business in the new year.
In a supplement to his monthly newsletter, financial expert and advisor Martin D. Weiss says 216 blue chip stocks are "Y2K basket cases."
As an example of trouble ahead, Weiss points to findings in required Securities and Exchange Commission filings from the nation's top businesses.
"General Motors is risking a devastating Y2K shutdown. In its disclosures to the SEC, the company admits it could face significant impediments to (its) ability to carry on its normal operation," warned Weiss as one example of trouble ahead.
The problems reported by General Motors are said to be typical of those reported by at least 219 other major firms. Many of these same companies paint a much rosier picture in their public statements about their Y2K preparations.
Add to the internal Y2K problems of these companies the likelihood that financial transactions could be disrupted and you have a lot of companies unable to do business, and a lot of people out of work.
Mauldin is expecting layoffs sufficient to bring unemployment figures over 20 percent, and a resulting drop in the stock market of 50 percent or more.
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David M. Bresnahan is an investigative journalist for WorldNetDaily.com and the author of "Cover Up: The Art and Science of Political Deception."
-- Uncle Bob (UNCLB0B@Y2KOK.ORG), October 22, 1999
Very soon now, in 70 days, Jack can change his tag:
-- lisa (lisa@work.now), October 22, 1999.
"The Social Security system is now 100 percent
compliant"
"SSA's work is not yet complete,"
Guess they need to be 120% compliant before
they're complete. :-'
-- spider (spider0@usa.net), October 22, 1999.
The Bank for International Settlements (BIS), Basel, Switzerland
http://www.bis.org/BIS Whats New
http://www.bis.org/wnew.htm21 September 1999
New publications: (Click at BIS web-site Whats New link for PDF download)
Year 2000 Cross-Border Communications between Supervisors during the Millennium Period
Summary:
Today's global financial markets require cooperation and close coordination among bank supervisors both within countries and across borders. Such coordination will be especially important in the remaining months of 1999 and early 2000 as banking organisations and markets deal with the Year 2000 challenge. This document outlines an approach that bank supervisors may want to consider as they develop their national and cross-border Year 2000 event management and communication strategies.
(8 pages, 45677 bytes)
###
Gathering Year 2000 Information from Financial Institutions: Recommendations for Supervisors
Summary:
Supervisors will need to be well informed during the rollover period to identify internal and external problems that could disrupt financial institutions and markets and to dispel misinformation. Gathering and disseminating accurate information on the Year 2000 rollover in a timely manner will be a priority for banks and their supervisors. This document recommends an approach for bank supervisors to use in gathering reliable information from their financial institutions in a timely and efficient fashion during the Year 2000 rollover period. The successful implementation of this approach requires that it be properly planned and tested before the Year 2000 event takes place.
(7 pages, 32466 bytes)
###
BIS Joint Year 2000 Council
http://www.bis.org/ ongoing/index.htm
-- (not-here@not-really.no-way), October 22, 1999.
Mauldin points to recent reports by the Security and Exchange Commission, as well as a survey by respected researcher Howard Rubin's Rubin Systems, Inc. The SEC and Rubin report that American businesses are not fully prepared to deal with the Y2K computer problem in a survey of the Fortune1000 companies.Security and Exchange Commission
http://www.sec.gov/The SEC and the Year 2000
http://www.sec.gov/ news/home2000.htmNew Year 2000 Information
Year 2000 Notices and Certifications Filed by Broker-Dealers Pursuant to Rule 15b7-3T Operational Capability in a Year 2000 Environment (September 23, 1999)
http://www.sec.gov/ news/y2k/y2kbdcri.htmYear 2000 Notices and Certifications Filed by Non-Bank Transfer Agents Pursuant to Rule 17Ad-21T Operational Capability in a Year 2000 Environment. (September 23, 1999)
http://www.sec.gov/ news/y2k/y2ktacri.htmRemarks of Chairman Arthur Levitt to the President's Council on Year 2000 Conversion, Financial Sector Group Year 2000 Summit, Washington, D.C., September 17, 1999. (File name: spch297.htm)
http:// www.sec.gov/news/speeches/spch297.htmSpeeches by SEC Officials
http://www.sec.gov/ news/spchindx.htmSEC Congressional Testimony
http://www.sec.gov/ news/tstyindx.htmSEC Special Studies
http://www.sec.gov/ news/spstindx.htm"Third Report on the Readiness of the United States Securities Industry and Public Companies To Meet the Information-Processing Challenges of the Year 2000"
This report presents the SEC staff's current findings on the securities industry's state o readiness for the Year 2000, as well as the Commission's position on issuer disclosure obligations, analysis of Year 2000 disclosure to date, and actions that the Commission and its staff are taking to address the Year 2000 problem. (July 1999. File name: yr2000-3.htm)
http:// www.sec.gov/news/studies/yr2000-3.htm
-- (not-here@not-really.no-way), October 22, 1999.
Respected researcher, Howard Rubin's Rubin Systems, Inc.
http://www.hrubin.com/ index.html(Y2K survey results available for purchase)
-- (not-here@not-really.no-way), October 22, 1999.
Chips test tomorrow, Oct 23.warning, PFD, but some good stuff.
-- lisa (lisa@work.now), October 22, 1999.