NHNE Y2K Report 22
Sunday, April 18, 1999
& Consumer Protection
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NHNE Y2K Report 22
Sunday, April 18, 1999
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IT Survey Foresees Global Y2K Crisis
U.S. to Host Global Y2K Conferences
Kosovo Crisis Complicating European Y2K Initiatives
Pharmaceutical Companies Concerned About Access To Raw Materials
Russian Airlines Face Y2K Insurance Rate Hike
GartnerGroup: Most Vendor Software Not OK for Y2K
Dodd/Bennett: Fed Government Running Out Time
White House to Set Up Y2K Coordination Center
Fed Sees Possible Complications from Y2K
Sanger's Review Has New Editor
THE NHNE Y2K ACTION NETWORK:
Fun in the Environment of Opinion
Get On With Life
GAO: Nearly Half the Power Firms Will Miss Deadline
Companies Urged to Prepare for Y2K Power Outages
Jim Lord Leaving Westergaard
Bennett: Will the Federal Government Be Ready for Y2K?
Bears & Bulls Face Off Over Y2K
Demand for Safe Deposit Boxes Rising
Claims of Banks Seizing Y2K Supplier Funds Doubtful
"Windowing" Only a Temporary Y2K Fix
A Better Water Pump
The Microsoft Year 2000 Product Analyzer
"Speaking of Y2K..."
THE LIGHTER SIDE OF Y2K:
THIS WEEK'S NEWS SOURCES
SO YOU WANT TO BE SAFE?
"If you want to be safe during social collapse, you can commit yourself
a) poverty, so that there's nothing to steal, [or]
b) service, so that you become a valuable resource and ally."
--- Tom Atlee, THE CO-INTELLIGENCE INSTITUTE
IT SURVEY FORESEES GLOBAL Y2K CRISIS
(Source: Edward Yardeni's Y2K REPORTER, 4/12/1999)
Information technology (IT) professionals are very concerned about the
Year 2000 bug, according to a survey conducted by the INFORMATION TECHNOLOGY
ASSOCIATION OF AMERICA (ITAA) in December 1998. The poll was directed
at the 11,000 direct and affiliate members "from America's largest corporations
to the entrepreneurs building the blockbuster IT companies of the future."
Eight-seven percent of survey respondents said the Year 2000 problem
is a crisis for the nation and the world; 52 percent think the millennium
bug will hurt their companies; and only 21 percent disagree with this
notion. Over one-third said the bug had already started to bite, triggering
failures under actual operating conditions. Other notable components
of the survey include: 71 percent of respondents indicating their companies
have experienced Year 2000 system failures under simulated or test conditions;
71 percent are performing contingency planning as a top priority, while
only three respondents had actually completed the contingency planning
process; only 18 percent of these organizations have a full-time contingency
appointed executive; 44 percent of respondents will stop doing business
with non-compliant suppliers but half of those will assist those suppliers
who are not compliant in the event they need help; 35 percent of those
surveyed are stockpiling critical materials; and 66 percent are planning
manual procedures to override computer system failures. Perhaps the
most striking result of the survey is that only 19 percent believe their
local communities are taking adequate steps to prepare for Y2K contingencies.
U.S. TO HOST GLOBAL Y2K CONFERENCES
(Source: Erich Luening, CNET, 4/13/1999)
U.S. Secretary of Commerce, William Daley, announced a new international
initiative by his department to join "international partners" in the
global effort to deal with Year 2000 issues. The new campaign includes
Commerce-coordinated Y2K conferences around the world aimed at exchanging
Year 2000 solutions and distributing educational materials to help countries
best deal with the pending global deadline. Some of the materials to
be distributed include 300,000 CD-ROM copies in eight languages of a
"Self Help Tool," and two videos on the Y2K bug for public television
and corporate use. The COMMERCE DEPARTMENT also plans to establish a
Y2K website. Daley said he is addressing the concerns of U.S. executives
from across the country who "are concerned that some nations and some
international companies are not taking the Y2K problem as seriously
as they should, or don't have the tools to identify the problems or
solutions." "We have one simple message," said Daley. "We want to work
with our trading partners to prevent the Y2K problem from becoming the
first global economic crisis of the next millennium." South Africa's
ambassador to the U.S., Sheila Sisulu, is pleased that international
conferences were in the works. "The Year 2000 technology problem can
have far-reaching problems, even for those countries who have made good
progress in their conversion efforts," she said. "No country, no matter
how far along in their efforts, is immune to Y2K problems in other countries."
KOSOVO CRISIS COMPLICATING EUROPEAN Y2K INITIATIVES
(Sources: Erich Luening, CNET, 4/13/1999; Scott Johnson, Y2KTODAY, 4/14/1999)
Dr. Marvin Langston, Deputy Chief Information Officer for the DEFENSE
DEPARTMENT (DoD), has announced that U.S. military representatives will
meet with their Russian counterparts in Moscow about Y2K issues from
April 19-21, ending speculation that the Kosovo conflict had derailed
U.S.-Russian cooperation on the Y2K issue. Langston admitted the armed
conflict in Kosovo was deflecting resources from DoD's Y2K testing effort,
and that if this trend continued, some "rescoping" of DoD's testing
methodology might be necessary. Sen. Chris Dodd (D-Conn.), Vice Chairman
of the SENATE SPECIAL COMMITTEE ON THE YEAR 2000 TECHNOLOGY PROBLEM,
has just returned from a trip to NATO headquarters in Brussels, Belgium
where he discussed the current crisis in Kosovo with NATO members, as
well as Year 2000 technology efforts in the individual countries. "They
have had a lot of complications over there with the introduction of
three new countries into the NATO alliance, but they are paying a lot
of attention," said Dodd. He praised the COMMERCE DEPARTMENT's recent
initiative to host a series of global Y2K conferences as another way
to get the nations of the world on the same page as they deal with the
Y2K bug. (JG)
PHARMACEUTICAL COMPANIES CONCERNED ABOUT ACCESS TO RAW MATERIALS
(Source: Stacy Collett, COMPUTERWORLD, 4/5/1999)
While pharmaceutical companies have outpaced the rest of the health
industry in Year 2000 preparedness, the wild card will be getting the
raw drug materials from abroad after Jan. 1, 2000. According to the
SENATE SPECIAL COMMITTEE ON YEAR 2000 PREPAREDNESS, about 80 percent
of the raw materials needed to produce drugs come from outside the U.S.
A survey by the PHARMACEUTICAL RESEARCH MANUFACTURERS OF AMERICA (PhRMA),
indicates that more than half of U.S. drug companies are particularly
concerned about supplies from Asia and Japan. They fear telecommunications
and power sources will fail and curtail raw material shipments. "If
you're attempting to switch raw-material suppliers in countries where
their bureaucracy is mired down with Y2K problems, you could be hard-pressed,"
said Kenneth Kleinberg, an analyst at GARTNERGROUP. The PRESIDENT'S
COUNCIL ON YEAR 2000 CONVERSION is working with industry groups to determine
how much inventory and raw materials drug companies should maintain.
Most keep a one-to two-month stockpile of raw materials, and once drugs
are produced, wholesalers and retailers keep two- to three-month supplies
of the products themselves. "If we determine there is a need, we're
planning to adjust our inventory levels. We'll make that decision a
few months prior [to year 2000]," said Tracy Stenn, a spokesperson
at MERCK & CO. PhRMA estimated that two-thirds of U.S. drug makers
have completed Year 2000 work on all software applications. Most of
the health care industry, in comparison, has just started testing mission-critical
systems, according to the GARTNERGROUP. (JG)
RUSSIAN AIRLINES FACE Y2K INSURANCE RATE HIKE
(Source: AGENCE FRANCE PRESSE, 4/13/1999)
Several Russian insurance companies, fearful of potential flight disasters
due to the millennium bug, have slapped the nation's airlines with higher
rates. Russia has been singled out as particularly vulnerable to the
potential for disaster at year's end. The nation's top official in charge
of the problem, FEDERAL AVIATION SERVICE Deputy Director Victor Gorlov,
has estimated the transition to Y2K-compatible programming will cost
Russia upwards of $3 billion. The preventative measures for the airline
industry alone are estimated at over $3 million, none of which is expected
to come from Russia's painfully-undersized budget. (JG)
GARTNERGROUP: MOST VENDOR SOFTWARE NOT OK FOR Y2K
(Source: Thomas Hoffman, COMPUTERWORLD, 04/12/1999)
With less than nine months to go until the Year 2000, an astounding
81 percent of vendor software applications still aren't millennium-ready,
according to a recent report from the GARTNERGROUP. Testing shows that
6 percent of vendor software that shipped Year 2000 patches aren't completely
compliant either. Progress is "not happening fast enough," said Lou
Marcoccio, Year 2000 Research Director at the Stamford, Conn.-based
research firm. Of the so-called Year 2000-ready packaged applications
examined by CAP GEMINI's Application Renovation Center, 10 to 15 percent
still contain an average of four to five millennium bugs per program,
said Noah Ross, who runs the Center. The problem for many corporate
customers is that, to receive a free Year 2000-ready version of a vendor's
software, customers have to be using the most current version. "Many
customers don't, and it's a big problem." One of the biggest exposures
for corporate customers is the uncertain readiness of Windows 95, said
Jeffrey Tarter, Editor of "Softletter." MICROSOFT "has been very ambiguous"
about whether it has identified and fixed all the millennium bugs in
Windows 95. (JG)
DODD/BENNETT: FED GOVERNMENT RUNNING OUT TIME
(Source: CNNFN, 4/14/1999)
Senators Christopher Dodd (D-Conn.) and Robert Bennett (R-Utah) of the
SENATE SPECIAL COMMITTEE ON THE YEAR 2000 TECHNOLOGY PROBLEM scolded
U.S. government agencies recently for not doing enough to ensure that
contingency plans are in place in the event of any Y2K-related failures.
"The committee is not satisfied with the level of progress in this area
and has asked agencies to provide more details on their planning efforts
by the end of the month," said Bennett, Chairman of the Committee. The
senators are concerned that there is not enough time remaining for federal
agencies to complete their testing to ensure services will be provided
without disruptions into 2000. Nearly 500 systems (8 percent) missed
the government's March 31 deadline. Those systems include Medicare payment,
air-traffic control and critical national defense systems such as the
Global Command and Control System essential for orchestrating conflicts,
such as the one currently ongoing in Kosovo. Bennett maintained that
while 92 percent of the government's systems are Y2K compliant, that
"doesn't mean the government is 92-percent ready," adding that federal
agencies still need to complete end-to-end testing. (JG)
WHITE HOUSE TO SET UP Y2K COORDINATION CENTER
(Source: Stephen Barr, THE WASHINGTON POST, 4/15/1999)
Analysts have complained for months that not enough data exists to predict
the severity of Y2K glitches in the event computer systems malfunction
or shut down Jan. 1, 2000, because they cannot correctly interpret the
calendar change. Now comes the announcement that the PRESIDENT'S COUNCIL
ON YEAR 2000 CONVERSION plans to set up just such a coordinating center
by the summer. To head up the new center, the White House has recruited
Peter Kind, a researcher at the INSTITUTE FOR DEFENSE ANALYSES and the
Army's top information systems officer from 1992 to 1994. The center
will receive Y2K alerts from major federal agencies, from states through
the FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA), from embassies via the
STATE DEPARTMENT, and from industry groups representing crucial economic
sectors. Reports will be prepared for President Clinton and a "deputies
committee," the details of which are yet to be determined. (JG)
FED SEES POSSIBLE COMPLICATIONS FROM Y2K
(Source: Caren Bohan, REUTERS, 3/25/1999)
The FEDERAL RESERVE is worried about its ability to provide emergency
loans to banks whose computers might seize up because of the Year 2000
bug. Speaking to the SENATE BANKING COMMITTEE, Fed Governor Edward Gramlich
warned that banks' requests for money through the central bank's discount
window could rise "substantially in the future." While Gramlich was
not predicting a bank computer problem, he said it was still important
to be prepared for the possibility that it might happen. To that end,
he asked the lawmakers to support legislation that would permit the
central bank to make the necessary loans without running into technical
constraints on its balance sheet. Balance-sheet constraints have become
a concern in light of a trend of a decline in the amount of reserves
that banks hold with the central bank. (JG)
SANGER'S REVIEW HAS NEW EDITOR
(Source: Patrick Shannon, SANGER'S REVIEW OF Y2K NEWS REPORTS, 4/15/1999)
SANGER'S REVIEW OF Y2K has a new editor and an ongoing commitment of
provide daily links and intelligent summaries of the most important
news articles about the Year 2000 problem. Patrick Shannon, who has
been helping Larry Sanger with the site for two months, has taken over
the day-to-day functions of the Review. He says he will remain accountable
to Sanger and his high standards of quality reporting. Shannon has been
a computer technician and consultant, mostly for small companies, since
1988. In the past year and a half, he has been an advocate of the idea
that the future will unfold in a way that nobody has been able to imagine.
While he admits he personally lean towards the "doomer" camp, he believes
that it is important to be open to all possibilities. Sanger will continue
to serve as Executive Editor of the Review. (JG)
Sanger's Review: http://www.sangersreview.com/
THE NHNE Y2K ACTION NETWORK:
FUN IN THE ENVIRONMENT OF OPINION
By Jonathan Taylor
In November 1998, the WEST KOOTENAY Y2K ALLIANCE of Nelson B.C. produced
a city-wide symposium with 450 people participating out of a town of
9,000. Out of this came several special-interest groups: a core group
of about 25, third-party verification, food and gardens, school initiatives,
elders, community outreach, a consulting group (INSTITUTE FOR TRANSFORMATIVE
LEADERSHIP), website, storefront, miscellaneous events such as satellite
downlinks, and the recent conference and symposia: "Y2K and Beyond"
-- two days of educational displays, expert presentations, debates,
panel discussions, community round tables, story telling, comedy and
music with educators and activists from across North America, including
Peter MacDoran, Judy Laddon and Larry Shook. We seem to have become
the most active Y2K community alliance in British Columbia at this time.
Some municipalities in the Vancouver area are angling for liability
exemption and our local politicians, who are thinking along the same
lines, are just beginning to ask for hard data. As a result, we must
walk the fine line between advocacy and lobbying on the one side, and
straight research reporting on the other. The determination of accurate
information, useful information and planning advice is difficult to
come by, let alone manufacture in this environment of opinion. We have
a few technological facts at the core of the issue. Radiating outwards
from these are multiple scenarios, each in a direction that supports
a particular mythology of social change, or stasis for that matter.
We have taken a position slightly left of the middle of the road, using
a taste of fear to drive an agenda of social change towards community
resiliency and interdependence. We also include a group that is in touch
with the darker aspects of social unrest, with overtones of global conspiracy
and military coup. We have taken the tack that we only engage the issues
that generate personal juice and raise energy. No "shoulds" or "oughts."
Our funding comes from a variety of sources: foundations, the Province
of British Columbia, the City of Nelson and individuals. Much of the
resources are sweat equity and in-kind donations of equipment and supplies.
For the symposium we had wide support from Nelson's business community.
Our greatest challenges remain: Sustaining funding. Holding the interest
and commitment of core members who are juggling full, under-financed
lives with this essential service. Determining which, out of a universe
of possible projects, are the critical ones; and balancing the immediate
material Y2K problem needs with the clearly evident. Underlying spiritual
crisis. Maintaining enthusiasm in the face of indifference, denial,
hostility, and isolation from the community at large. Broadening the
base of support to include a wide spectrum of community members. Discerning
Thank you for the NHNE Y2K Reports and news items. They are a great
help and many of them find their way to our website.
WEST KOOTENAY Y2K ALLIANCE
Nelson, British Columbia, Canada
GET ON WITH LIFE
By Liza Christian
[The following comments are from Liza Christian, former Director
of the ROGUE VALLEY Y2K TASK FORCE, who recently stepped down from her
job and took some time away from the Y2K scene.]
I think there is a tendency to perpetuate the gloomy side of Y2K without
even being aware that we're doing it. These days I'm trying to focus
more on solutions and getting a hopeful, positive, and targeted perspective
rather than rehearsing the problem over and again. When I do share Y2K
information, it's with the view that this is essential information that
will shape your thinking significantly, or provide you with tools and
resources that lead to solutions. This new direction and focus has helped
my mental state and thus my physical state considerably, and has also
made me more effective in communicating the true concerns about Y2K
and other predictions of a changing world scene.
I regard Y2K preparations as "insurance." I don't buy auto insurance
and then wake up every morning wondering, "Will this be the day that
I get to benefit from my policy?" On the contrary, I rarely think about
it unless I'm making my premium payment. Even then, I don't think, "Ahhh,
I wonder if it's worth it to keep paying on this policy?"
I'm more into what we can do (training, getting new resources, building
skills such as first aid, etc.), what should we do, what are we willing
to do, and how many others can we rally to the cause. Then, I don't
have to question de Jager's flip flop, or Yourdon's increased devastation
scenario, or debate whether Y2K will be a blip or a catastrophe. I'm
as prepared as I can be for multiple emergency/disaster situations.
I want to live in hope and freedom. I don't want to be strangled by
depression and melancholy (which unfortunately I see happening to many
people), or put my life on hold. I've worked to marshall the efforts
of my neighbors and friends and community. Now, I get on with life.
Liza K. Christian
Former Executive Director
ROGUE VALLEY Y2K TASK FORCE
Rogue Valley, Oregon
GAO: NEARLY HALF OF POWER FIRMS WILL MISS DEADLINE
(Sources: CNNFN, 4/16/1999; COLUMBIA WATER & LIGHT Year 2000 Readiness
The nation's electric power utilities have completed only 44 percent
of Year 2000-related preparedness and testing, according to a government
report by the GENERAL ACCOUNTING OFFICE (GAO), giving rise to concerns
about the possibility of widespread power failures as the new year approaches.
The GAO reported that 46 of the participating organizations said they
don't expect to be Y2K ready by the industry's June target date, and
16 percent of those organizations said they don't expect to be Y2K-compliant
until the fourth quarter of 1999. Noting that the U.S. electric power
supply industry is comprised of about 3,200 electric utilities, the
GAO expressed concern about the industry's efforts to make their systems
Y2K ready, especially given the fact that power utilities are so dependent
on embedded computer control systems: "All phases of operations in the
electric power industry, from generation to distribution, use control
systems and equipment that are subject to Year 2000 failures....The
industry's analysis of its embedded systems has shown that the Year
2000 problem places the nation's electric power systems at risk."
The GAO findings are particularly troubling when coupled with this edited
excerpt taken from a Y2K Readiness Report prepared by COLUMBIA WATER
& LIGHT in Columbia, Missouri, which indicates that, if portions
of the grid go down, it may be difficult to start up individual power
"'Black Start' refers to the ability of a generating station to be restarted
from a total power failure or blackout. This is generally done either
by batteries that can turn over the prime mover or by compressed air.
An automobile, for example, is black started every time it is started.
A power plant is rarely black started, and many are not capable of being
black started. The Columbia Municipal Power Plant cannot be black started.
The City of Fulton, however, has some diesel engines that can be black
started. We are therefore working with Fulton to use their system to
restart ours in the event of an area-wide power failure. Procedures
to isolate the Columbia/Fulton system from the rest of the world, start
diesels in Fulton, and bring both systems up, are being formulated.
This plan would have to include an alternate form of communication between
the two utilities and plans are underway for a radio link." (JG)
COMPANIES URGED TO PREPARE FOR Y2K POWER OUTAGES
(Source: JOURNAL OF COMMERCE, 4/14/1999)
Y2K-related power outages at the dawn of the new year could result in
costly property damage for unprepared businesses, says FACTORY MUTUAL,
a commercial property loss-prevention organization. What the overall
impact will be is difficult to predict, because each company's facility
is different. "In cold climates, for example, loss of power, even for
a few hours, could cause...building heat loss that could freeze and
burst pipes and render fire protection systems inoperable," said Michael
Polagye, Factory Mutual's Y2K Task Force leader. "At other locations,
outages as short as 15 minutes could interrupt production lines and
damage work in process."
The good news is there's still time to reduce one's risks by preparing
for possible utility outages and other Y2K problems. Following these
nine practical steps can help business owners prepare:
1. Create contingency plans for all critical services and processes
by analyzing the potential risks, developing response methods, writing
a plan and testing it.
2. Shut down processes or minimize operation levels where possible to
reduce the chance of problems.
3. Make sure key employees know what to do if a problem occurs, and
that they will be available in the event of an emergency.
4. Obtain and test backup heat and power well before year end.
5. Check fire protection systems to make sure they are in working order,
sprinkler control valves are open, fire pump fuel tanks are full, and
water reservoirs are full.
6. Eliminate sources that could cause a fire -- such as open flames
and temporary heaters -- and consider shutting down hazardous processes.
7. Don't build excess inventory that your fire protection can't handle.
8. Plan for manual operations of critical systems such as boilers and
processes that cannot be shut down in the event that automatic controls
9. Prepare for post-2000 recovery if you plan to shut down vulnerable
systems and processes. Some systems may experience Y2K-related problems,
and start-up may not happen in the normal manner.
For more information, check with your property loss-prevention consultant.
JIM LORD LEAVING WESTERGAARD
(Source: Jim Lord, WESTERGAARD YEAR 2000, 4/15/1999)
After 81 weekly columns, WESTERGAARD columnist Jim Lord is leaving the
WESTERGAARD YEAR 2000 fold. He seeks to move beyond the constraints
of his former preparedness-oriented "Tip of the Week" in order to broaden
his investigation and analysis of Y2K to other issues such as government,
politics, technology, education, healthcare, the economy, and the environment.
Here are some edited excerpts from Lord's final Westergaard column:
"Two things worry me about the assurances from the big guys that all
is going well. When Woodward and Bernstein, the reporters who broke
the Watergate Scandal, were stuck, their informant, 'Deep Throat,' told
them to 'follow the money.' Applying this same logic to the Y2K picture
is revealing. Specifically, the spending numbers reported to the SECURITIES
AND EXCHANGE COMMISSION (SEC) indicate insufficient progress on a broad
scale. As long as BELL SOUTH, for example, claims to be on schedule
while their most recent SEC report indicates they've spent just 11 percent
of their Y2K budget, I will remain skeptical. Studies by Capers Jones
and others indicate that over the past 30 years, six of every seven
large software projects either finished late or were canceled. Y2K is
the largest and most expensive software project in history and it has
an inflexible deadline. Why should we expect it will be finished on
"And then there's the 'Lucy Factor.' Lucy, of course, is the character
in the 'Peanuts' cartoon series. For years she's been fooling poor Charlie
Brown with a football [that] she holds in position for Charlie
to kick, but at the last moment she pulls away [and] Charlie
falls flat on his back. What makes this gag so funny is that Lucy always
assures Charlie that THIS TIME she won't move the ball. Good old trusting
Charlie always believes her. But she always moves the ball, and down
goes Charlie. John Koskinen is 'Lucy' and you are 'Charlie Brown.' He
wants you to ignore the government's past record and believe them THIS
TIME. He wants you to ignore the fact that, in the past, virtually all
their software projects have been delivered late. He wants you to ignore
an history of technical ineptitude and decades of outrageously bad technical
management. He wants you to believe THIS TIME they're going to beat
the odds. He wants you to believe they'll finish every single one of
6,400 projects on time. He wants you to believe they have pulled off
the greatest technical miracle in history. He wants you to have the
faith of Charlie Brown. If you do that, like Charlie, you'll find yourself
flat on your back on the ground looking up at the sky. And 'Lucy' will
be looking down with the football in her hand saying, 'Gotcha!'"
"The current Y2K strategy has nothing to do with computers. It has to
do with controlling you and your inflamed passions. At a recent MEDIA
STUDIES CENTER forum called 'Y2K: The Press and Preventing Panic,' John
Koskinen urged reporters to be generous with reassuring news and helpful
advice on do's and don'ts (Y2K Report 20). 'The issue to deal with is
panic. The issue is overreaction...that's where the risks are.' No,
Mr. Koskinen, the issue is you and this chilling strategy of using the
media to protect us against ourselves. We don't need reassurance, we
need the truth, just like you promised."
"My greatest single concern, however, is with top management -- there
ain't none. The lack of leadership on Y2K for the past three years is
precisely why half our small businesses and small governments and most
foreign countries are failing to deal with Y2K. That same deficiency
has now put us on the brink of a catastrophe."
"My Final Tip of the Week is the same drumbeat I have been banging out
for three years: assume personal responsibility for your own well-being
and prepare, prepare, prepare."
Lord plans to continue writing weekly columns on a wide range of Y2K-related
topics that he will post on his own website. (JG)
Jim Lord's Website: http://www.SurviveY2K.com
BENNETT: WILL THE FEDERAL GOVERNMENT BE READY FOR Y2K?
(Source: Scott Johnson, Y2KTODAY, 4/14/1999
Senator Robert Bennett (R-Utah) could not have been more direct in the
question he asked three Y2K experts during a recent hearing of the U.S.
SENATE SPECIAL COMMITTEE ON THE YEAR 2000: "Do you believe that, on
January 1, 2000, the Federal government is going to be able to function
without major problems?" Here is how they answered:
John Koskinen, Chair of the PRESIDENT'S COUNCIL ON YEAR 2000 CONVERSION:
"I am confident that any problems with the economy or the American public
will not come from the failure of Federal systems." Koskinen testified
that, according to the latest data obtained from federal agencies, 92
percent of federal systems had been remediated, tested, and implemented.
Deirdre Lee, acting Deputy Director for Management at the OFFICE OF
MANAGEMENT AND BUDGET: "We are confident that every mission-critical
system will be ready for the Year 2000."
Gene Dodaro, Assistant Comptroller General for the GENERAL ACCOUNTING
OFFICE (GAO). "I'm encouraged that everything is being done to minimize
the risks [but] I think it's a little premature to make that
judgment at this time." The GAO warned that much work still remained
and that some "fixed" systems had revealed flaws. "In some cases, independent
verification and validation of compliant systems have found serious
problems. For example...none of the HEALTH CARE AND FINANCING ADMINISTRATION's
54 external mission-critical systems reported...as compliant as of December
31, 1998, were Year 2000 ready, [according to] the independent
verification and validation contractor."
The committee chairman persisted: "I think the American people need
to be reassured that...the Federal government is not going to come to
a halt, and federal services are not going to break down in a massive
way, and it will not be the end of the world as we know it. Are you
all comfortable with that summary?" All three nodded their head, although
Dodaro was a bit slow to join the other two. (JG)
BEARS & BULLS FACE OFF OVER Y2K
(Source: Miriam Hill, PHILADELPHIA INQUIRER, 4/13/1999)
SUN MICROSYSTEMS CEO Scott McNealy is telling people to buy computers
now because he is worried that Y2K problems may disrupt production next
year. He is not the only one raising concerns that the Year 2000, and
the computer problems it is expected to bring, could slow the economy,
corporate earnings, and the stock market. "I think there could be enough
disruptions around the world that it could cause a worldwide recession,"
says Ed Yardeni, Chief Economist for DEUTSCHE BANK SECURITIES in New
York. Yardeni puts the chances of a major recession at 70 percent, with
a 90 percent likelihood of major disruptions of stocks. Yardeni paints
a picture of a recession that unfolds like this: foreign companies,
many of them suppliers to large U.S. corporations, are not ready for
Y2K, causing big problems, making it impossible to stick to production
schedules, pummeling corporate earnings.
However, for every short-term bear, there is an economist predicting
that investors will barely notice Y2K. For example, a recent survey
of 33 economic forecasters by the FEDERAL RESERVE BANK of Philadelphia
found that they expect the U.S. gross domestic product to grow at 2.4
percent in the fourth quarter of 1999 AND in the first quarter of 2000
-- a robust rate. At MORGAN STANLEY DEAN WITTER, analysts Peter Canelo
and Lorraine Wang believe that concerns about the economy are overblown
and problems abroad are unlikely to hit hard. A few analysts are even
bullish on Y2K. Thomas Galvin, Chief Investment Officer with DONALDSON
LUFKIN & JENRETTE in New York, says Y2K could pump up demand for
stocks in the STANDARD & POOR'S 500, as investors seek safety. And
after it blows over, Galvin thinks Y2K could even BOOST earnings as
companies benefit from money they spent improving their computer systems.
What's an investor do? First: Stay calm -- experts say people rarely
make good decisions when they panic. Next, consider your options and
decide whether to stay the course, or shift some money out of stocks
into safer of havens. Study after study has shown that trying to time
the stock market by selling on expectations of bad news and buying on
expectations of good news simply does not pay off.
Philadelphia financial planner Roy Diliberto, President of RTD FINANCIAL
ADVISORS and President-elect of the INTERNATIONAL ASSOCIATION OF FINANCIAL
PLANNERS, recently asked his clients to review their plans in light
of Y2K. Of his 250 clients, only three took him up on the offer. Two
of them made relatively minor changes, and just one client sold everything
and paid about $15,000 in capital gains taxes. "His concern is that
the underlying companies won't be able to do business," Diliberto said.
"That's what it took to make him sleep at night."
Harold Evensky, a financial planner and author of "Y2K and Your Money,"
suggests that people assess their risk tolerance. People who have weathered
previous downturns with little fear have no reason to do anything differently
now. But people who think a decline in stock prices of 20 percent or
more would trigger them to sell in a panic, should temporarily reduce
exposure to stocks, he said. "It is far better to make changes in your
portfolio now than to make changes in panic later." (JG)
DEMAND FOR SAFE DEPOSIT BOXES RISING
(Source: Sheryl Jean, THE BUSINESS JOURNAL (Minneapolis/St. Paul), 4/12/1999)
Some banks are receiving increasing numbers of requests from people
wanting to place their cash in a safe deposit boxes around the turn
of the millennium for fear of Year 2000 computer glitches. LIBERTY STATE
BANK in St. Paul, Minn. for example, has 100 people on a waiting list
for their 2,700 safe deposit boxes, says bank Vice President Joan Peper.
Big banks, according to Peper, "have cut back on services, closed branches
and cut down access to safe deposit boxes to three or four hours a day.
That's where our demand is coming from. Basically, the consolidation
and closings of banks have left people out of the loop." NORWEST BANK,
owned by San Francisco-based WELLS FARGO & CO., plans to convert
at least two bank branches slated to close in nearby Plymouth and Woodbury
into staffed, safe deposit box centers with no other bank services.
The safe deposit box shortage is not universal. Although 14 percent
of Norwest's 160,000 safe deposit boxes throughout Minnesota are available,
there's a definite crunch in the Twin Cities area, said Colleen Ross,
Senior Project Manager for NORWEST BANK MINNESOTA. Some Norwest Bank
branches in the growing, western suburbs have no safe deposit boxes
available, and "there's a two- to three-year waiting period," she said.
Safe deposit boxes are a customer service -- a "safe" place in a bank
vault to put important personal belongings such as jewelry, coin collections,
contracts or family photos. Banks don't make money on the boxes, which
carry a relatively low annual fee of $17 to $150.
Consumers could create even more demand for safe deposit boxes toward
the end of the year, fearing the millennium bug will electronically
wipe out their savings. "The whole taking-cash-out-of-the-bank issue
is very big concern to us," said Connie Weinman, National City Bank's
compliance lawyer. [There are two ironies here: in a safe deposit
box, while the cash stays in the bank, it's not accessible to them;
if the doors and vaults of the bank are shut by Y2K, your valuables
may be "safe" but inaccessible to you. ­p;JG]
CLAIMS OF BANKS SEIZING Y2K SUPPLIER FUNDS DOUBTFUL
By James Gregory
As part of their ongoing Y2K series called, "Panic in the Year Zero,"
WORLDNETDAILY has just published an article entitled, "Banks Seizing
Y2K Supplier Funds," which claims, "As Y2K-related sales skyrocket,
merchants are being accused of fraud and denied payment from banks."
It continues, "Banks claim to be just following procedure. 'A large
increase in sales looks suspicious to us,' says Sal Caruso, a merchant
account representative from U.S. BANK. 'We have to hold these accounts
for review to verify the sales are real.'"
The article then gives specific examples of banks seizing assets of
companies that market Y2K-related products, such as Y2KNEWSWIRE. According
to the article, Mike Adams, creator and editor of the free Y2K news
and analysis service, had over $38,000 in funds seized and was informed
by U.S. Bank merchant officials that no specific release date could
be promised. Adams is quoted as saying, "Banks hate the Y2K preparedness
industry. Because part of preparing for Y2K is taking out some cash.
It's a direct conflict." The article reports: "Adams thinks banks are
retaliating by working to deny Y2K companies their lifeline -- customer
cash. 'They're trying to drive Y2K companies into the Dark Ages,' says
Adams, who adds, 'And that's funny because it's exactly where the banks
will end up if their own computers stop working on January 1.'"
Another example given is that of LUMEN FOODS: "'[The bank] called
me at 8:30 in the morning and said our account had been seized,' says
Greg Caton, President of Lumen Foods, a food supplier that has shipped
over $3 million in orders since last August. 'They indicated fraud.'"
Reaction to the article has been swift, and some of the most serious
accusations come from one of the persons quoted in the article. Greg
Caton, President of Lumen Foods, published the following statement the
same day as the article was published:
"Word of our demise has been greatly exaggerated!...We've never had
money taken from our account. No one has ever accused us of fraud. We
have never had our credit card privileges revoked, suspended, or in
any way tampered with. We have nothing but a spotless 12-year history
of solid relations with our credit card company. I made a few simple
comments to Mike Adams at Y2KNewswire...and my comments have become
more and more misstated every since. No one ever called me from WorldNetDaily
to see if what was said was true or not. I will never again be able
to read something in WorldNetDaily and be sure it is true....The fact
is, they don't even have the good sense to call the very people they
are quoting. Journalism, Internet or print, doesn't sink to any lower
level than this."
For the record, here is an edited version of what was stated by Greg
Caton to Mike Adams in early April:
"In late January, Lumen Foods was contacted by John Smith of FIRST DATA
MERCHANT SERVICES, its credit card processing company. Greg Caton was
told that the Lumen Foods account was being 'reviewed' because of dramatic
increases in credit card deposits, but that this was standard practice.
Smith was courteous in both explaining the credit card company's position
and in his request for documentation, including financial statements.
Lumen Foods complied with all requested documentation. The review was
passed without incident."
Mike Adams at Y2KNewswire was the only source used by WorldNetDaily
in its report on Lumen Foods. At no time was Lumen Foods accused of
fraud, as WorldNetDaily reports. Nor was its bank account ever seized.
According to Caton, "The WorldNetDaily report is totally false, and
Mr. Farah's claim that the report must be true because Mike Adams says
it is, defies all good journalistic practice."
And just to liven up the discussion, WorldNetDaily Editor Joseph Farah
(JF) posted several statements in the <comp.software.year2000>
newsgroup which were later challenged by Lumen Food's President Greg
Caton (GC). Farah's newsgroup statements are followed by Caton's rebuttal,
both of which are currently posted on Caton's "False WorldNetDaily Report"
JF: If my 25 years of credibility reporting and editing news stories
can be tarnished by the lies of one misguided fool, it's not worth restoring.
GC: Misguided? How am I misguided for pointing out a gross violation
of journalistic practice? You continue to deny your culpability even
after I provide indisputable proof that you published false information
-- which must now be recategorized to "knowingly-false information."
JF: Read Caton's comments carefully and you will see he is not denying
unequivocally making his comment.
GC: Is that so? What must I do to make it more unequivocal? You [are]
lying, and now I am providing the proof necessary to demonstrate the
sham that WorldNetDaily is.
JF: He denies talking to a WorldNetDaily reporter.
GC: I most certainly do. It never happened.
JF: He admits making the comment to a Y2KNewswire reporter, who, in
fact, was working for us.
GC: Mike Adams denied this to me in a 4/14/99 telephone conversation.
He did nothing more than send you some email. So that constitutes a
"reporter working for WorldNetDaily?" Sir, you are an amateur.
This is not the first time questionable reporting practices have gotten
WorldNetDaily into hot water. In January, a report of a nation-wide
mobilization of the National Guard triggered a flood of negative comments
because of sensational claims, unverified sources, sloppy reporting,
and a slew of errors (Y2K Reports 12 & 13). Commenting on the latest
kerfuffle, Sheri Nakken, publisher of Y2K REPORT adds: "WorldNetDaily
once again doesn't quite have it right. That's why I don't use them
for a source until verified elsewhere. Y2KNewswire doesn't look too
Lumen Foods is preparing to slap WorldNetDaily with a libel lawsuit.
Curiously, Y2KNewswire has chosen this exact moment to shut down their
operations for a week. (Sources: WORLDNETDAILY, 4/14/1999; Sheri Nakken,
Y2K Network, 4/15/1999; Greg Caton, LUMEN FOODS Website, 4/15/1999)
Original article: http://www.worldnetdaily.com/bluesky_exnews/19990414_xex_banks_seizin.shtml
"WINDOWING" ONLY A TEMPORARY Y2K FIX
(Source: USA TODAY/AP, 3/15/1999)
The most common technique used to fix computers vulnerable to Year 2000
failures is a quick-and-dirty solution that will require expensive repairs
or replacements within a generation. The temporary fix, called "windowing,"
uses a sophisticated twist of logic to fool computers, and is highly
controversial among insiders because it's intended to work for only
20 to 70 years. So why is the technique used at all? Because it's quicker
and easier, even if it only works for a specific window of time. The
permanent fix, called "expansion," requires a tedious line-by-line search
and repair of all six-digit dates. Software experts hope windowing will
prove adequate until these computers are replaced -- or until programmers
can devote enough time and money to make permanent repairs. Industry
analysts estimate the method is being used to patch 80 percent of computers
worldwide. One expert describes computers already fixed with the technique
as "little ticking time bombs waiting to go off."
Using windowing, programmers instruct software to guess the century
for dates that fall within a specific "window" of time, such as the
next three decades. The computer interprets the year based on a future
so-called hinge date, or pivot, that programmers choose arbitrarily.
For example, a software program with a pivot of "30" will interpret
years "00" through "29" as 21st century dates, but will assume years
"30" through "99" are during the 1900s. Some programmers use pivots
of "50" or "70" to buy even more time. Once the pivot date is past,
those computers will need to be replaced or patched again as they begin
quietly contaminating data by making wrong assumptions about the century.
Windowing is fraught with other risks, as well. Different programs assigned
different pivots can cause havoc when companies or governments try to
share information, unless they take complex precautions. Testing typically
takes longer, too. Windowing problems might not appear until January,
when computers start guessing which century to use. In contrast, if
the permanent ''expansion'' fix is done incorrectly, the problem often
is immediately obvious.
"It's a band-aid," said Jim Duggan, a researcher with the GARTNERGROUP
consulting company. "I don't think some people expect to be in those
same jobs," added Michael P. Harden, President of CENTURY TECHNOLOGY
SERVICES INC. consultants. "Fix it now, get everybody off your back...and
if there's a problem, you won't be around to have to deal with it."
The federal government, doesn't discourage agencies from using windowing,
but warns of consequences. "It's like the FRAM oil filter guy: 'You
can pay me now or you can pay me later,'" said Keith Rhodes, a technical
director at the GENERAL ACCOUNTING OFFICE, which monitors repair efforts
at federal agencies. "It's not solving your problem. It's delaying the
inevitable." While some government agencies, such as the SOCIAL SECURITY
ADMINISTRATION, have generally shunned the method. the STATE DEPARTMENT
is using it on nearly half its most important computers, and the FEDERAL
AVIATION ADMINISTRATION freely acknowledges using the technique.
"It's an issue of pragmatism," explained Y2K analyst Ed Yourdon. "Anybody
who had to go through that choice was very much aware of the tradeoffs.
We'd like to do it the right way...but we don't have time, so even though
it's a quick-and-dirty approach, we have no alternative. Too bad." "People
with time and money took the high road and did full expansion," agreed
Duggan. "We'll replace this in 20 years, but isn't that exactly the
same thing we said back in the 60s?" Harden pointed out. "The same people
who created the problem are now fixing it, and installing something
that will have the very same problem down the road." (JG)
A BETTER WATER PUMP
(Source: Steve Troy, JADE MOUNTAIN INC., 4/13/1999)
In Y2K Report 21, we reported on the Stalwart emergency hand pump that
is remarkable in that it can be installed alongside a submersible water
pump. This type of pump is always ready for use in case of a power outage
and alleviates the extra work of removing one to install the other.
Now we hear from Steve Troy of JADE MOUNTAIN INC. that the Stalwart
pump is not that popular because it has some shortcomings: it's overpriced
and made mainly of PVC plastic. According to Troy, there is a better
pump on the market called the "Simple Pump," which "costs about the
same, works much better, and is made of stainless steel and brass."
Simple Pump details: http://www.jademountain.com/handpumps.html (JG)
THE MICROSOFT YEAR 2000 PRODUCT ANALYZER
(Source: MICROSOFT Website)
MICROSOFT is offering a Year 2000 Product Analyzer that performs the
- Identifies installed software products on specified drives by scanning
the drives for executable files.
- Compares the resulting list of products to the products listed in
a compliance database.
- Generates a report of the compliance levels of the products it discovered,
based on the information in the compliance database.
Microsoft Year 2000 Product Analyzer download is compact enough to be
placed on a floppy disk for easy installation on any PC with the following
- An Intel 486 or greater processor
- 25 MHz or faster
- At least 2 MB of free hard-disk space
- One of the following operating systems: Microsoft Windows 95/98 or
Microsoft Windows NT 3.51/4.0
- A mouse
And the good news is that this program is available free at:
"SPEAKING OF Y2K..."
(Source: George E. Tice, Research Dept., HARBINGER INSTITUTE, 3/11/1999)
The HARBINGER INSTITUTE, an organization that consults with groups working
on the social aspects of the Y2K computer problem, has just published
a Y2K guide called "Speaking of Y2K..." for communities and neighborhoods
to open dialogue and create action. The guide includes:
- Questions and background information for two, two-hour small-group
- Suggested "homework" between sessions.
- Basic guidance for running study circles.
- Action ideas for individuals and groups.
- A resource guide that focuses on the social aspects of Y2K.
The guide provides a framework for constructive small-group discussions,
called "study circles," about Y2K. It's meant to be used in neighborhoods,
workplaces, communities, families, groups of friends, churches, and
other places where people might benefit from learning about Y2K together,
and talking about how they might support each other's efforts to be
prepared for possible problems.
The study circle is a simple process for small-group deliberation which
creates a setting for personal learning, building community, and problem
solving. Study circles using the "Speaking of Y2K..." format can help
warm up a group or community to the more intensive community preparedness
activities suggested in UTNE's "Citizen's Action Guide" and by the CASSANDRA
PROJECT. They help create spaces for people with different points of
view to come together to create stronger understanding and action over
the long term.
Copies of "Speaking of Y2K..." are available for $3.50 each from: Harbinger
Institute at: "email@example.com," or as a free downlaod from the Harbinger
Institute Website. (JG)
HARBINGER INSTITUTE Website: http://www.harbingerinstitute.org
THE LIGHTER SIDE OF Y2K:
(Source: Ashleigh Brilliant, NANDO TIMES/CHRISTIAN SCIENCE MONITOR,
1/29/1999, thanks to Michael Sohaski)
An atmosphere close to panic prevails throughout Europe as the Year
1000 approaches, bringing with it the so-called "Y1K bug" -- a menace
that, until recently, hardly anyone had ever heard of. Prophets of doom
are warning that the entire fabric of Western civilization, based as
it now is upon monastic computations, could collapse, and that there
is simply not enough time left to fix the problem.
Just how did this disaster-in-the-making ever arise? Why did no one
anticipate that a change from a three-digit to a four-digit year would
throw into total disarray all liturgical chants and all metrical verse
in which any date is mentioned? As well, all tabular chronologies with
three-space year columns, maintained for generations by scribes using
carefully hand-ruled lines on vellum sheets, will now have to be converted
to four-space columns, at enormous cost.
Stonemasons are already reported threatening to demand a proportional
pay increase for having to carve an extra numeral in all dates on tombstones,
cornerstones, and monuments. Together with its inevitable ripple effects,
this alone could plunge the hitherto stable medieval economy into chaos.
A conference of clerics has been called at Winchester to discuss the
entire issue. Many families, in expectation of the worst, are stocking
up on holy water and indulgences. (JG)
THIS WEEK'S NEWS SOURCES:
The stories in this week's NHNE Y2K Report were drawn, in part, from
the following news sources:
SANGER'S REVIEW OF Y2K NEWS REPORTS:
YEAR 2000 INFORMATION CENTER:
GARY NORTH'S LINKS AND FORUMS:
Sheri Nakken (Y2K NETWORK):
Copyright 1999 by NewHeavenNewEarth
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