The stock market is part of a system: the securities industry. It is also part of other systems: banking, government, and telecommunications. If any of these systems fails, the securities industry simply disappears. Sayonara. (Given the capitalization and solvency problems of Japan's banking system, I think "sayonara" is the appropriate word.)

The securities industry is not Year 2000-compliant. Of course, neither is banking, government, or telecommunications. Tom Lehrer back in the 1960's wrote and sang a song: "We'll all go together when we go. Every Tom, Dick, Harry, and every Joe." The song was about nuclear war. It applies quite well to y2k. Systems are systems. They are interdependent.

The securities industry's rating services such as Moody's, Dun & Bradstreet, and Standard & Poor's, have not yet used y2k compliance or y2k repair costs as categories in estimating the future performance of a company. This may seem peculiar at first, but think about it. If they all go together when they go, then why single out any company? Why call attention to the problem of one company if everyone is equally at risk? Why create a panic prematurely?

At some point, perhaps one of these services will begin to highlight y2k in its assessment of particular companies. Perhaps companies will even begin to advertise, "We're Year 2000-compliant." But I doubt it. This is the problem that airlines face if they start promoting themselves with ads saying, "We're a safe airline." First, any airline may experience a plane crash next week. Second, no airline wants to remind people that planes do sometimes crash.

When I think of the securities industry and y2k, I think "crash."

(Other categories: "Litigation," "Banking," "Too Late?")

Updated -	Subject
24-Feb-97	Securities Industry Deadline to Begin: 1/31/96 (Too Late!)
05-May-97	Securities Industry's Deadline for Testing: March, 1999
03-Jun-97	J. P. Morgan Securities Warns: It's Worse Than We Thought
10-Jun-97	Prudential Insurance Gets Rolling: June 2, 1997
10-Jun-97	Merrill Lynch: Late 1998 Deadline (The Familiar Promise)
27-Jun-97	Securities Industry's Estimated Y2K Repair Cost: $5 Billion
27-Jun-97	Merrill Lynch: $200 Million for Y2K Repair
28-Jun-97	Earnings Are Begining to Sag a Little: Y2K Expenses
30-Jun-97	An Optimist: Dow 4000, 5-Year Recession
02-Jul-97	Another Optimist: 6-Month Crash, Then Boom
11-Jul-97	Nasdaq Stock Exchange: $20 Million to Get Compliant
14-Jul-97	CPA Firms Will Begin Waffling on Audits in 1998
16-Jul-97	Senator Bennett Warns of a Stock Market Sell-off
16-Jul-97	Senator Dodd Spells Out the Risk: Total
17-Jul-97	FORBES Warns: Corporate Disclosure Is Coming
28-Jul-97	The Insurance Connection
06-Aug-97	Merrill Lynch Warns: Y2K Is Not Trivial
06-Aug-97	Computer Glitch: Nikkei Falls 3% in One Day
14-Aug-97	Millennium Bomb May Cripple Wall Street (London Times)
14-Aug-97	Big Six Accounting Firms Fear Havoc in 2000
11-Sep-97	A $2 Trillion Hit Will Not Help the Market
19-Sep-97	Bullish Economist Switches: Predicts Mild Recession in 2000
19-Sep-97	Britain: 6 Million Jobs Will Disappear, Guenier Says
22-Sep-97	NY Fed President Warns of Major Risk to Markets
23-Sep-97	Economist Yardeni Offers Paper on Y2K: Growing Pessimism
30-Sep-97	No Coordinating Agency for U.S. Securities Industry's Repairs
30-Sep-97	When Will the Accountants Tell the Truth? Maybe in 1998.
21-Oct-97	SEC Legal Staff Warns Companies, Sort of
23-Oct-97	Senator Warns: Companies Are Resisting Y2K Disclosure
01-Nov-97	A Y2K Chain Reaction in the Securities Industry: Meltdown
04-Nov-97	SEC Chairman Says Y2K Should Be Top Priority
06-Nov-97	Senator Bennett Proposes Legislation: Disclosure of Y2K Costs
07-Nov-97	Day of Reckoning, 1998: Accountants, Earnings, and Y2K
13-Nov-97	An Extra $30 Billion to Fix the Euro
18-Nov-97	Yaredeni Interview: More Risk Today Than in Past 10 Years
22-Nov-97	Up to $6 Billion to Fix U.S. Securities Industry
03-Dec-97	Insurance Industry: Nowhere Near Compliant
03-Dec-97	The Senate Bill to Force Y2K Disclosure by Corporations
04-Dec-97	Why a Y2K Depression Will Be Worse
11-Dec-97	London Sunday TIMES: Warning on Share Prices
13-Jan-98	Corporate Disclosure Non-Rules from SEC
14-Jan-98	Merill Lynch's Problem: 170 Million Lines
15-Jan-98	60 Companies Had Y2K Disclosures in Their 1997 Corporate Reports
10-Feb-98	No Second Chance in 2000, Warns Securities Spokesman
11-Feb-98	Toronto Exchange Tells Firms to Inform Investors on Y2K
20-Feb-98	Mild Economic Problem Possible, Says BUSINESS WEEK
21-Feb-98	SEC's Rules on Y2K: Don't Bother to Tell Investors
24-Feb-98	One-Sixth of British Organizations Won't Make Deadline: 40% of GNP
10-Mar-98	Fidelity Fund: 100 Million Lines, $100 Million Bill
11-Mar-98	How to Make $19 Million Overnight Without Risk: Smith Barney
20-Mar-98	FORBES' Hatchet Job: The End of an Era
20-Mar-98	FORBES: Market High, Journalistic Low
20-Mar-98	Call Me Irresponsible!
06-Apr-98	60% Chance of Recession: Yardeni
07-Apr-98	Typical Economist: We Can't Say Anything Specific
07-Apr-98	70% of Businesses in Asia Will Fail, Says Y2K Expert
24-Apr-98	Washington Businessmen Predict Bad Times
29-Apr-98	Japan Is So Far Behind: Secondary Depression in 2000
29-Apr-98	Toronto Stock Exchange: Loss in 1998 Because of Y2K
29-Apr-98	Leasing and Finance: Y2K Is Worst Problem in 25 Years
04-May-98	American Century Fund on Y2K: We've Got It Under Control!
11-May-98	SEC Chairman: Old-Fashioned American Business Survivalism
12-May-98	Chicago Merc Has Just Begun Its Code Repair
13-May-98	Securities Industry Will Be Fine, Says Securities Industry Agent
14-May-98	Australia's Economy Could Lose 1% (If They're Lucky)
15-May-98	SEC Offers a List of Y2K Questions for Your Broker
18-May-98	Stock Market Woes in 1999, Predicts Dutch Banker
27-May-98	No Big Problem, Says Abby Cohen
10-Jun-98	Freeze Stock Options, Bonuses until 2001
15-Jun-98	U.S. Companies Are Stonewalling the SEC
15-Jun-98	Law Professor Warns of Stock Market Fall Due to Y2K
15-Jun-98	The High Cost of Not Fixing Y2K: Yardeni