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Summary and Comments

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1997-07-11 00:00:00


CLOSED FORUM - Reporters



You may think you've wandered into the Twilight Zone, or at least the Virtual Twilight Zone. Well, if the Millennium Bug turns out to be the equivalent of a cherry bomb instead of a thermonuclear device, this Twilight Zone web site will fade away rapidly.

But when you think about it, the story of a handful of long-forgotten programmrers who decided to leave out two digits, and thereby placed an entire civilization at risk, is also a story for the Twilight Zone.

If the Big One really happens -- the short-circuitining of the power grids -- this story will get a chapter in the history texts in a thousand years: the biggest worldwide, overnight event in Western history. If only the banks go down, the story will at least get a paragraph.

Your story may even become be a part of the primary resources of the future. Maybe your story of local denial will become some future historian's anecdotal evidence.

Right now, the best local story is the story of Dick Brich of North Platte, Nebraska. I have posted the Creighton University study of his efforts. Check under "Government." Or check USA TODAY (May 1, 1997).

The y2k story is going to escalate. Millennmial fever will sweep the whole world in 1999. There's no way around it. "Isn't this a repeat of a millennium ago?" Actually, no. We've been told for years that apocalyptic fears swept the West as the year 1000 approached. There is not much evidence for this. The twelfth and thirteenth centuries were the great centuries of apocalypticism until the nineteenth. But it makes for a great story.

This time, apocalypticism will sweep the world. It will not be marked by hordes of terrified faithful Christians poring into the churches for deliverence. It will be marked by hordes of frantic wives standing outside of banks, while their equally frantic husbands are calling their mutual funds' toll-free numbers and getting nothing but busy signals.

You, too. Your wife, too. Not me, however. I'm out of the stock market and out of the city.

Meanwhile, how can you get a piece of this historical drama? By not getting conned by the following flakkery: (1) "That information is proprietary." (2) "Our system will be ready for testing on December 31, 1988." (3) "Our IT department assures us that the problem is manageable." (4) "Our vendors are working on this." (5) "Our suppliers will be fully compliant by mid-1999." (6) "The Association of [ ] is well aware of this problem and has been actively pusuing solutions." (7) "Our bank is well on the way of being compliant well before the year 2000." (8) "The cost of this repair has already been factored into the budget for our IT department."

Here are my translations: (1) "If this leaks out, the short sellers will cream us." (2) "Our legal department says that if we don't target this date officially, we'll be up to our butts in due-diligence lawsuits from 2000 until the middle of the next century." (3) "That's what we pay the CIO to tell us, but his staff hasn't met a programming deadline in 20 years." (4) "Our vendors are planning to file either Chapter XI or Chapter VII; we're not sure which." (5) "Three of our suppliers, anyway: our lawn service company, our janitorial service company, and the guy who repairs the air conditioner." (6) "The Association found out about this last fall, and has run three brief stories on the last page of its monthly newsletter." (7) "Our bank is still running DOS-based micros, vintage 1989, and is hoping that Windows 97 will be compliant." (8) "We aren't giving those idiots in the IT department an extra dime after what they've got us into; they can fund it from their Christmas party fund as far as we care."

Use this forum to share information about what works to get the truth out of these guys, what public sources are available that deal with y2k (such as SEC filings), which regulatory agencies have a vested interest in getting the truth before the whole mess winds up on their desks, which disgruntled Dilbert is willing to spill the beans, which Board member sees the lawyers lining up and is willing to cut his losses early for the greater good of himself, and which competitor is willing to blow the whistle on a local outfit on the assumption that HIS company will meet the deadline -- a man afflicted with a CIO who really knows how to lie.

Now, in a more serious vein -- the jugular vein, actually -- here is a letter sent to me buy a man who is a CPA and a CIA (certified internal auditor) who audits computer systems in large firms. I received this e-mail letter on July 12, 1997. He referred to the dilemma of the large CPA firms in dealing with the y2k liability of companies. This really is scary if you've got a pile of your money in stock mutual funds:

"You might want to check with Partners of the main CPA firms. It is a standard audit requirement by the AICPA that public accountants must consider the "going concern" feasibility of all organizations, and ensure that there is adequate disclosure of any problems in conjunction with the financial statement audit. I have contacts in 4 of the Big 6. All of them tell me that they are dreading looking at going concern issues. Some firms are going to start evaluating Year 2000 compliance from a going concern perspective in conjunction with 1997 year-end audits. I have some indication that at least one firm is already realizing that this is going to substantially reduce the number of unqualified opinions that they can issue. I would expect a large number of poor or qualified audit opinions for 1997 FY, and a flood in 1998. This is what will capture the attention of the financial community. The auditors will be required to publicize the viability questions of noncompliant companies, and no doubt this will trigger a reaction in the markets. It is my understanding that the CPA firms are developing internal guidance on this question. Of course, they will try to evade as much as they can because there will be a lot of unsatisfied companies. (I don't know if the AICPA, the SEC, or the FASB for that matter are drafting any overall guidelines on this issue. I'll check into this and let you know.) I think that the CPAs will blow the lid of this problem earlier than you think, so it will be 1998 when the public panic will hit."

Cheery . . . not!

My suggestion: for a great inside story of a company facing a disaster, you can always start with your own employer. But then where would you publish it?

I don't want to be too blunt about it, but the truth is, if the stuff on this web site is even remotely on target, you probably will be out of a job, come Jan. 3, 2000. Earn your paycheck, send out your resume, and hope that your wife's counsin with that organic farm outside of Tulsa will have a spare guest cottage lying around unused in 2000. That's a more realistic hope these days than 10% increase compounded in your retirement fund until you actually retire, no matter what tenured economists tell you.

Of course, it's not over until the fat lady sings. Right now, she's backstage, wolfing down Twinkies and RC Cola.


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