Gary North's REALITY CHECK Issue No. 45 January 7, 2000

BEYOND THE ROLLOVER: ARE WE OUT OF THE WOODS NOW?

The rollover went by without a major breakdown anywhere in the world, including all those Third World nations, small businesses, and local governments that had done almost nothing to fix Y2K. There was no 72-hour storm. This was unexpected by everyone, most of all, me. There were also no terrorist attacks, no viruses, no nothing. But nobody blames the government for months and months of "fear-mongering" over terrorism.

What there is, is broken code. Peter de Jager, whose Web site just sold for $2.1 million, told the press this week that the computerized operations of the world still have not been proven safe and sound. Glitches are there, waiting to happen, he says, and we should expect to put up with them for months to come. Cory Hamasaki agrees.

But as for a breakdown, we're out of the woods.

Unless. . . .

EXPLAINING THE UNEXPLAINABLE

Here are basic issues that remain unanswered:

1. How did the programmers all finish on time, all over the world, when this had never before happened in any large- scale software project?

2. How did enterprises that started late, spent less, and had less experience in mainframe programming all fix their systems?

3. How reliable are systems that did not receive any final testing?

4. How will industry-wide systems hold up, even though there was no testing of these huge systems?

5. How will the problems of undetected bad data be solved?

Let me remind you of some reports that I find hard to put together logically. They are examples of these overall problem areas.

In May, 1998, a report on Japanese banks appeared. It said that the largest 49 banks planned to spend -- future tense -- $249 million. (WASHINGTON POST, May 20, 1998). At that time, Citicorp had spent twice this. Bank of America had budgeted $350 million. (London SUNDAY TIMES, May 24).

A survey of 97 Japanese banks in August, 1998, revealed that not one was compliant. Five refused to respond. (BUSINESSTODAY.COM, Aug. 27).

In December, 1998, a report appeared that the 19 largest Japanese banks planned to spend (future) a billion dollars on Y2K. (DAILY YOMIURI, Dec. 3).

In February, 1999, another report came out that said that of the top 19 Japanese banks, only two were 75% compliant. Half were 25% or less. (USA TODAY, Feb. 10).

Then, on September 1, the Bank of Japan announced that 674 banks were near compliance. (ASIABIZTECH).

This does not compute. Citicorp spent $950 million, and it took four years. Last fall, we were being asked to believe that banks as large or larger than Citibank went from 25% compliance to 99% compliance in six months. Then there was the matter of final testing.

So, I for one do not believe that the banking system is out of the woods.

Let's talk about final testing. Our entire economy is now in the final testing stage. A year ago -- even a week ago -- there were mainframe computers that were still able to operate in 1999 mode. If there was a glitch that shut one down in a Year 2000 test, the system would not go down. It was still 1999. Now it's 2000. What happens if a glitch shuts a system down this year? What is the fall- back position?

There were no big surprises on January 1, other than the absence of big surprises. But in the future, say Hamasaki, de Jager, and other mainframe programmers, there will be surprises. Maybe they won't all be big. But in the banking world, a little surprise in a large bank can create big problems for other banks.

Y2K's simultaneity problem is now gone. It will be one institution at a time, one bank at a time. This reduces society's risk dramatically. Greenspan's 99+% figure for compliance seems to have been reached. This has to be for the entire international banking system.

And yet . . . how can we explain the success of the Japanese banks? I can't do it. No one else is even asking.

If 100% of the Japanese banks went from noncompliance to compliance in six months, then why did the 20 largest U.S. banks pay over $3 billion over a four-year period years to fix Y2K? I know I am the only person who is asking this question today. I ask it because the answers do not make sense.

I am not trying to play games here. I honestly do not understand the situation. Alan Greenspan in 1997 said that banking could not survive with a mere 99% compliance. So, did it achieve 99+% compliance? We do not know. Does it really need 99+% compliance? We do not know.

My concerns over the Millennium Bug were based on my belief that the interdependent systems could not all be fixed in time, tested in time, and secured from bad data in time. I had the banks in mind, above all. Today, we are told that banking has no problems. The markets seem to agree. But the technical means by which the largest banks on earth -- the Japanese banks -- achieved 100% compliance is not even discussed publicly.

VIOLATING THE LAW OF LARGE PROJECTS

I look around me and think, "How did I get fooled?" Were the press reports on Japan wrong? Did U.S. banks use Y2K as an excuse to upgrade their computers when the old ones would have worked?

I do not believe that Y2K was a hoax. I never read any report by any mainframe programmer who said, "This is a hoax. Nothing will happen if we don't fix this."

I read Ed Yourdon's report, written in late December, on the history of large-scale software projects. A significant percentage of them come in late or are cancelled. Always. Yet this time, all over the world, they supposedly all came in on time. All of them.

How?

I am not a programmer. I have read the words of a lot of programmers since late 1996. Not one of them indicated that this law of large projects is false. Capers Jones said it was true. So did all who commented on it. Many cited Fred Brooks' mid-1970's book, THE MYTHICAL MAN-MONTH. Large projects run late. Always.

But they seem to have finished on time this time.

Am I baffled? Yes. Do I have an explanation? Not a good one. But here is the one, for now, that I believe. They did not all come in.

We are looking at systems that did not get fixed. They surely did not get tested for a year, as promised in 1998. They are incomplete.

Then how can they still be running at all? I have only this answer, made up on the spot to fit the anomaly: Y2K is not a fix-or-die technical problem, but a side problem that has long-term negative effects, but is more corrupting than catastrophic.

The only other answer I can come up with is this: Y2K was always insignificant, but the programmers all lied in order to get the money. This is the old "consultants' hype" argument. The trouble is, across the world, not one full-time mainframe programmer ever sounded the alarm by saying, "Y2K is not a problem worth fixing."

There was money to be made, speeches to be paid well for, and TV interview shows galore for one person to stand up and announce, "Y2K is not a problem worth fixing." There were more than 15 minutes of fame to gain by saying this, but no full-time mainframe did. No CIO did. No government official did.

The systems were not tested. This, we know. Now we must sit back and wait. Will Y2K be a corrupting problem? Systems will start getting fouled up. Noise will increase. Or has Y2K been fixed? Then how is this possible? Or was it never worth fixing? If so, then why did U.S. businesses spend $90 billion to fix it?

I think Y2K remains a problem. But its form has changed. It is now inside supposedly compliant systems, undetected, ready to pass bad information to decision- makers. It is not conceivable that it was completely fixed. Programmers who have spent their lives working on large projects say it has not been fixed, could not be fixed. I believe them. We missed a show-stopping failure. The erosion process has begun.

EROSION AND THE U.S. STOCK MARKET

Y2K will soon fade from the media. Glitches will not be news. On January 6, East Coast airports suffered a major FAA computer failure. Flights were delayed for hours. But there was not much coverage of this. Fox News ran a brief report as its headline. Nowhere in the story was there any mention of Y2K. This is the shape of things to come.

Erosion is not newsworthy. It will not be covered. It will be visible, case by case, in our daily dealings, but these will be non-simultaneous events. This, above all, is THE surprise of Y2K: major problems did not appear simultaneously, despite the deadline date. That fact has killed Y2K as a media topic.

If Y2K is significant -- not a hoax, but not really fixed -- then it will reduce corporate efficiency. This will lower corporate earnings. The stock market will take a hit, assuming, perhaps naively, that earnings affect stock prices. They don't with Internet shares, but they do -- or are thought to -- in the real world.

The Dow Jones Industrial Average touched 11,568.72 on December 30. Then it fell back. Just one decade earlier, to the week (maybe to the day), the Japanese stock market peaked at just under 40,000. It has never come close to 30,000, except on its downward slide.

This 11,568.72 number is curious. Let me explain.

I am not a follower of Elliott Wave theory. It's too complex a system for my abilities. But last May, I received a detailed essay from a Jean Comeau of Quebec, a commodities advisor -- registered, he says, in Chicago. He wanted me to post the essay on my site. It was not Y2K- related, I told him, so I didn't.

Yesterday, he sent it to me again. His essay said that the Dow's top would be 11,550-11,600. He wrote,

"WAVE 5: WHEN DOW JONES HITS 11560 TO 11600 POINTS. END OF MAJOR BULL MARKET, PERIOD.

He then got even more specific:

Wave 5 or 1999 = Fibonacci number 34 times 339 equals 11526 plus 43 (crash low) equals 11569.

I do not pretend to understand this system. Robert Prechter is an Elliott wave theory proponent. I read his book, AT THE CREST OF THE TIDAL WAVE (1995), and I reviewed it in the November, 1995 issue of REMNANT REVIEW. The market has gone far above what he predicted. In fact, he predicted a fall to Dow 1,000, beginning in late 1995 or 1996. But Mr. Comeau's number is highly specific. I do not care that it is 0.28 above 11,568.72. It's close enough.

Mr. Comeau is predicting a fall of over 5,000 points in the Dow in the next two months. I think I will ask him to do more writing for me as soon as it falls by 2,000.

I am no Elliott Wave aficionado. It's too technical for my taste -- strictly numbers-based. I see no reason to believe that Fibonacci numbers control stock market average prices, especially one market, the Dow Jones Industrial Average. I see no reason to believe that this index, and not some other, is THE number to watch in preparation for a worldwide depression. I think the Federal Reserve can still do a lot to forestall a crash, such as buy S&P 500 futures. The money pouring into the stock market from pension funds today is an ocean. Short of an unexpected crisis -- such as a lock-up of a major bank's computer system or default by some heavily leveraged hedge fund-- I cannot imagine a fall this rapid, now that the Y2K rollover is behind us.

Still, I will pay close attention to the Dow. Let's see if it penetrates 11,569. If it does, will it then penetrate 11,600? If it doesn't, I may develop a new interest in Elliott Wave theory -- at least until the end of February.

I also listen carefully to two other men who own sophisticated proprietary stock trading systems that call major reversals. Both of them are out of the market. One of them has shorted it.

I will keep you informed of their opinions if the overall stock market starts down. If the NASDAQ is the leader, it looks bad for the general stock market. But maybe investors are merely coming to their senses about BUBBLE.COM. Of course, if they come to their senses about price/dividend ratios, it's also bad news for the market.

WHY NO POST-Y2K MARKET BOOM?

Most people did not act on Y2K. They told pollsters that they would, but they didn't. I think this is why the rollover's good news has not created a boom in the U.S. stock market. The Dow started down on Monday and continued lower on Tuesday, then reversed. The NASDAQ was up on Monday but hit hard on Tuesday. It was down again on Thursday. In 3 days, it fell almost 10% from its high.

As Y2K optimism grew in the final weeks of 1999, the U.S. stock markets reflected this. But the pessimism had never been deep. So, we are back to fundamentals. The fundamentals are these: The FED pumped up the money supply in late 1999, and now it is unlikely to stoke the fires of inflation. The money spigot will be tightened.

This is a presidential election year. Traditionally, this means more fiat money to fuel an economic boom to get the incumbent's party re-elected. But Mr. Clinton has just reappointed Mr. Greenspan to another term as chairman. Mr. Greenspan's career is going to be longer than Mr. Clinton's. So, I do not expect the FED to play the political game this year, not after the recent Y2K-related expansion of money. Mr. Greenspan is no fan of "irrational exuberance" in the stock market. This market boom -- the NASDAQ especially -- has the marks of a financial bubble. "Infomagic" has called it BUBBLE.COM.

FROM PREPAREDNESS TO COMMUNITY

You have been hit with the standard line: "God will take care of us." The various justifications for refusing to prepare will be with us for a long time. They will be with us until times at last get tough long enough to remind people that there are no free lunches, that easy street always leads to a detour.

I thought easy street would hit a digital dead end. So far, I have been proven wrong. So, I am readjusting for the detour. Clinton's seven fat years are about to end. We may not get seven lean years, but we're going to get several. This debt-based boom has drained Americans of their willingness to save. That is a bad sign.

If you followed the basics of a Y2K preparation program, you are in a good position to deal with a financial downturn. You have basic consumption goods. You lowered your debt. You are out of the stock market. You may have begun a small business. You have battened down the hatches. You are less vulnerable to disruptions than ever before.

Do you see this an advantage?

You have counted the cost. Y2K persuaded you to re- examine your priorities. Things that may have been at the top of your list have moved down. If you really thought through what is most important to you, you are way ahead of almost everyone you know. You are now in a position, emotionally and economically, to begin to re-shape your life. If you got off the consumerist treadmill by stocking up on the basics, don't look back.

You have probably identified friends who are similarly minded. You will be in a position to pull together when times get tough -- and times will not stay in boom mode forever . . . or even through 2000, I think.

You must pursue your plans with like-minded people. Here is my recommendation now. Begin to build relationships with those Y2K activists who demonstrated that they took the problem seriously. Build a mailing list of like-minded people. If you spot an interesting article on the Web, e-mail it. Stay in contact. Have meetings. I don't mean big meetings. I mean meetings with three or four families.

Start sharing ideas on your plans for the future locally. See if your plans mesh with others. Share information.

I think this should be a long-term project. I have already begun. I am planning to get together with the other Y2K activists in our local church. I don't recommend setting up a cell group to take over the church. On the contrary, I recommend that the core group become a major source of help for the church -- Y2K volunteers, if you will.

Y2K has enabled you to identify people who share your view of the world. Don't let this opportunity pass by. I suggest as strongly as I can that you have a meeting soon. Lick your wounds. Admit that the results were not what we expected. But bear in mind that the code is still broken. Broken code will have negative effects, though not the visibly catastrophic ones that we expected, unless a crisis hits a key institution that is deep into derivatives.

Why don't you sit down and call two or three of them? Invite them over to talk about your plans, now that Y2K is officially over, and how their plans might fit yours. It is time to get trustworthy people around you.

If you lost your job tomorrow, who would you call for counsel emotional and support? It is time to start building relationships now.

END

-- Hokie (Hokie_@hotmail.com), January 06, 2000

Answers

Thanks Hokie!

-- Michael (michaelteever@buffalo.com), January 06, 2000.

[And here's the portion of the October 22nd article from WorldnessDaily.com, in which columnist David Bresnahan describes the BIS warning letter...]

"...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."

[ENDS] ---------------------------------------------------------------------- ----------

-- John Whitley (jwhitley@inforamp.net), January 06, 2000.

Sorry...that last article was from "WorldnetDaily.Com"!

-- John Whitley (jwhitley@inforamp.net), January 06, 2000.

Few of us here can throw stones at Gary North. Most of us have as little technical knowledge as he does. Although not to the same dire magnitude, we all got caught up in the apperantly faulty notion that our networks of computers are precarious. Early indications seem to suggest they aren't.

I bought into some of this y2k hype because of the same Elliott Wave factors North partially cites here. I disagree with his charaterization of Elliott's wave principle as being too technical or esoteric. This Bob Prechter he mentions is a psycology major from Yale that focuses far more on societial aspects of the Elliott Wave principle than any technical or numbers perspective. Prechter brought all the Elliott findings and writings and out of obscurity. Just because he's been wrong on the timing of the economic collapse, doesn't mean the theory doesn't have extensive merit. I'm convinced it does. I'm as grateful to Prechter as I am to G North or Ed Yourdon. I've learned alot from all of them.

Our society is in the fifth wave of a fith wave that started with the crash of '29. Our Presidents and our Fed Reserve Chairmen don't drive economic cycles. These cycles drive the popularity of our Fed and political leaders. These business booms and busts are driven by the cyclical tendency of our collective herd mentality. They're huge- much bigger than these little 1/4 % interest rate tweaks that everyone fixates on. They're bigger than any President's policies. Greenspan, the hero, just made his biggest faux pau. He should have stepped aside as the hero we've made him and rejected another term. You watch. Same Fed Chairman and policies and, like George Bush's reelection in '92, his popularity will be taken down by the inevitable cyclical downturn.

I thought y2k would be the catalyst to set this next downtrend in motion. Maybe it still will be. But if one is off on the timing it doesn't mean his underlying contentions are bunk. This 18, no make that this 70 year boom, will bust. It always does. And we're foolish hubristic and pompous if we think we've overcome these cycles.

-- Downstreamer (downstream@bigfoot.com), January 06, 2000.

Downstreamer,

Thanks for the insights into Prechter. This is the first I've heard of the guy, and so your post was more informative than GN's reference.

I keep getting blown away by how quick folks are to say it's over. People have the attention span of the average commercial, so now y2k is old news. GN's prediction of media dropping the issue is accurate. Your post as well as GN lets me adjust to read between the lines of the articles to come.

-- Hokie (Hokie_@hotmail.com), January 06, 2000.

The other half of the story deserves at least a hearing for anyone with an objective mind.

http://www.users.fast.net/~mlorenz/north.htm

-- Gary South (garysouth@starmail.com), January 06, 2000.

Gary South:

Yes, I read that essay. I sounds reasonable but carries alot of judgement in the place of reason.

Why is it that the pollies had to have everything PROVEN to them-- even just beyond a reasonable doubt? There are different standards of proof:

-beyond doubt. -beyond reasonable doubt. -based upon balance of probabilities.

Y2K "GI-ing" did not depend upon proof. It depended upon an accurate risk assessment:

RISK = HAZARD * CONSEQUENCE

-hazard is the chance of occurrence. -consequence is the severity of occurrence.

Once I realized that these things COULD OCCUR and COULD HAVE A SEVERE IMPACT it was imperitive to prepare. If you don't agree, why do you buy insurance? Why do you invest?

I THINK that the pollies have a dependence upon authority to tell them what to do (looking for "proof") rather than reasoning the situation out for themselves. Hence the extreme anger being posted by many pollies on this site.

My decisions were based upon education, reason and experience. My expectations of Y2K impacts have not come true--yet. My timeline extended into autumn 2000.

Don't judge others too quickly.

-- (Kurt.Borzel@gems8.gov.bc.ca), January 06, 2000.

The Elliot wave theory has some merit as an esoteric societal model that focuses gripping small talk over drinks at your neighbor's cocktail party. This "theory" had many revisionist proponents all during this extended bull market (revisionist as to how many times the computations have changed to match the current scenario). I manage 8+billion in funds and I will tell you that this is fringe model. "We are on the fifth wave of a fifth wave"???? What about the fourth wave of the fourth wave or the second wave of the second wave??!! Please remember that for the last 16 - 20 quarters the concensus of economists and forecasters have underestimated the resilience of this market. If markets were so easily forecast then we would no longer need markets. Markets will humble any who think they "have it all figured out". I consistently outperform my benchmarks and use a economic theory that many fail to recognize. COMMON SENSE!!! Please people use yours, how much longer can firms with no revenue no profits and no prospect of making either continue to soar? I have ridden my share of techo returns; but grow increasingly skeptical of the "irrational exuberance" manifested by many. Don't put all your eggs in one basket and trade a few eggs for bread and cheese. One last parting economic forecasting model, "A broken clock is an accurate predictor twice a day".

-- fund manager ($$manager@work.net), January 06, 2000.

The reason Gary doesn't get why it got fixed is because he (and I, and Ed Yourdon, and a whole bunch of other people) USED THE WRONG METAPHOR!

We thought of Y2K as a creative project; the metaphor was pregnancy: "If it takes a woman nine months to make a baby, that doesn't mean nine woman can do it in one." We didn't see any way to hurry things up by throwing money and personnel at the project too late in the game. We hadn't started in time. We were doomed.

Oops. Wrong metaphor. That lady wasn't making a baby, she was baking a pie. Putting nine ladies on the job gave us nine pies. Y2K, with all due deference to the programmers who did a difficult, demanding job, was not a creative project, it was not making something new with a blank sheet of paper. It was busy work. Precise, unforgiving, down to the wire busy work, but busy work nonetheless, with a known problem and known solutions. Why is debugging a new application so hard? Because you don't know where the bugs are! Why is Y2K different? We knew what to look for! That's why a small army of caffeine fueled madmen were able to get the job done. Nice work, guys! Hell of a job! Nobody believed in you, but you did manage it.

And next time, we'll try for the proper literary device to help us un

-- yup (we@gotitwrong.com), January 06, 2000.

Yup:

Best summary I've seen yet of our remidiation work. It really was just dull, predictable, but important work. The other thing to keep in mind is that we didn't have a "soft" deadline. December 31 was coming and there was no slipping. That, and having an almost unlimited budget, is what made the project succesfull.

Jim

-- Jim Cooke (JJCooke@yahoo.com), January 06, 2000.

derstand a complex real world problem. Damn Mac. Thanks, Jim.

-- yup (we@gotitwrong.com), January 06, 2000.

I think a better metaphor would be having nine ladies bake one pie. The amount of communication that has to take place on a programming project increases geometrically as programmers are added.

But perhaps a Y2K remediation task could be partitioned so that the boundaries between programmers tend not to involve dates, thereby minimizing the communication needed. So maybe it's more like having three ladies bake one pie.

-- David L (bumpkin@dnet.net), January 06, 2000.

Kurt,

I appreciate your remarks and I have no qualms with anyone looking at the facts and arriving at different conclusions. I also appreciate the civil presentation of your opinion, and I would like respond to your remarks.

I believe that anyone foolish enough to claim that they categorically knew the outcome of Y2K before it happened, and even now to some extent, is fooling only themselves. I make no claim of having known the outcome of the Y2K rollover, and I am pleasantly suprised at the minimal disruption so far.

My criticism goes to 3 issues: 1. Those who simply want the collapse of our society, and the Y2K becomes a convenient handle. (I'll provide quotes, if requested) 2. Those who would present themselves as an expert in computer systems, when they lack any real credentials. 3. Those who would distort the known facts, or make up facts to convince people to buy their gold, or their newsletter, or their dried food or whatever. It's tantamount to the money changers at the temple selling temple shekels.

Maybe you don't know anyone who pulled all of their money out of the bank, or bought thousands of dollars of food, or generators that they do not even know how to operate. Maybe you don't know anyone who lived with a fear of riots and the collapse of society and threats to the welfare of their family. The people I mention are a minority in society, but none the less they have been needlessly scared some dishonest people who only wanted to make merchandise of them.

I am not alluding to Ed Yourdon, I believe that he was geniunely concerned and with the best motives, he tried to warn others of the dangers he expected, no one can fault those motives. But what about those who circulated false stories about non-compliant railroad yards; "tons" of destroyed meat at a UK cannery; prisoners being mistakenly released from prison? Knowingly lying is bad enough, lying and manipulating and then swindling people is rephrensible.

I've been in the computer profession for over 15 years, I don't know it all, and I never will. But, I do know that some of the FUD that was published, was outright lies, causing many people genuinely needless fear.

It was reasonable for people to prepare for a horrible winter storm, but not a Mad Max nightmare.

Again, I respect Mr. Yourdon and I have used his diagramming method for years. Mr. Yourdon continues to have my respect and admiration. But, for those who have made a business of scaring people into hysterical paranoia for decades, I don't respect them, and I will continue to simply state the facts for the benefit of those who may not have the entire history.

Best Regards

-- Gary South (garysouth@starmail.com), January 07, 2000.

Gary North is a religous extrmist with an agenda of wanting society to fall. Read up on it! He aslo has made quite a business out of fear mongering. Someone in this thread referred to his "technical knowledge". North himself says his education is in hostory, not computers.

This man is a pied piper with his own agenda. Be careful of him! He has predicted the end of the world many times. Y2K is just the latest. It is very possible that were it not for his intelligence, cunning and ability to make a few bucks, he would be one of those folks on the street corner with a tinfoil hat screaming about the end of the world! Because he is articulate and sophisticated, many bought his call to arms. Just because someone is able to communicate their message effectively does not make them credible.

-- DAVID (tdavidc@arn.net), January 07, 2000.

yup and Jim Cooke,
We were mistaken about the metaphor of ladies baking pies. I believe it's actually an analogy. 8^)

-- David L (bumpkin@dnet.net), January 07, 2000.

My reading is that North's confusion continues to hinge on binary thinking. As pure speculation, this has always been true of strongly religious people, who are accustomed to thinking in terms of moral absolutes, and project absolutes onto spectra inappropriately.

North continues to view organizations as being either compliant or not, and if not they should fail. Remediation is either finished or not, and those not finished should fail. Testing was either performed or it wasn't, and if it wasn't they should fail.

Yet worldwide almost nobody was compliant, far fewer than half had completed remediation, and testing was "not done" for the majority. Yet we see (as yet) no organizational meltdowns, and only minor and temporary problems. How can this be?

At this point, North speculates that maybe all those who claimed there were lots of date bugs in code everywhere were lying! More binary thinking -- either there were bugs (calamity), or there were not (lies).

But the world is a messy and complicated place, and spectra must be taken into account. Just as a few examples:

1) Degree of date usage. Some systems (business/financial) make very heavy use of dates, while others (embeddeds, scientific/engineering, etc.) make almost none. So the worst problems weren't nearly as universal as North thinks.

2) Degree of automation. While large companies in the US and a few other contries are heavily automated, very small companies and many larger companies/govermnets around the world are much more manual. (As a footnote, what's regarded in the US as corruption -- special favors for some, special roadblocks for others -- is a way of life in many parts of the world. Corruption in this sense almost requires manual systems).

3) Degree of testing. It's possible that only a small minority of date bugs cause really serious problems, and even casual testing will be sufficient to find them. The remaining bugs simply represent an ongoing maintenance headache, making systems less robust but still functional for all practical purposes.

4) Degree of difficulty of fixing date bugs. By all accounts, these are mostly easy to find and fix. You know what you're looking for, and the code modifications required tend to be minor and not very complicated on the whole. (Another footnote: Some date errors are a lot harder to fix, and these were often cited as a reason to expect Big Problems. They might have done so if they weren't so rare).

5) Degree of resiliance/workarounds when faced with problems. How easily can we live with web sites with dates of 19100? How confused are we with paychecks/ jury summonses/drivers licences with 1900 as the year? How well can we deal with date fields of 00 or 1900 on reports or displays? Beyond the cosmetic, how practical is it to, for example, send out the same bill as last month for power or other fairly constant bills, or to agree to provide product now in exchange for payment later than usual, or to make inventory resupply orders based on past trends if we can't (yet) get our systems to produce reasonable current numbers? Is this being done?

6) Ranges of Mean Time To Repair. We have heard of (by now) thousands of reported bugs (according to Gartner and others). Few of them caused any significant operational problems, and most of them were fixed quickly.

In general, the misjudgment of impacts seems to based on a mechanical view of business operations. Machines have little redundency or flexibility, so almost any problem disables the whole machine. Businesses and governments are far more organic, as they must be to adapt daily to changing requirements, problems and opportunities in a changing world.

(A final footnote -- I'm not using hindsight here. I've said all this in one way or another many times over the last year or more. See, North should have listened to me [grin]. And I admit North has risen significantly in my estimation for admitting he totally missed the boat and struggling to understand how. In distinct contrast to Yourdon, who seems to be claiming he didn't really mean what he said, while simultaneously looking desperately for as many little glitches as he can collect so as to claim he was right all along).

-- Flint (flintc@mindspring.com), January 07, 2000.

Flint,

I'll take exception to your first paragraph suggesting that a religious person cannot be a rational, critical thinker, but otherwise I've haven't seen a better and more reasoned explanation of the Y2K situation anywhere.

Best Wishes

-- Gary South (garysouth@starmail.com), January 07, 2000.