Subj: Y2k Recession Almost Certain; Griffith Date: 99-01-23 13:30:44 EST From: [EMAIL PROTECTED] (Tony Toews) To: [EMAIL PROTECTED] Recession 'Almost Certain' Effect of Y2K Bug (Reynolds Griffith, Dallas Business Journal) http://www.amcity.com/dallas/stories/1999/01/04/editorial1.html?h=griffit h A professor of finance makes the case for this conclusion: "the Year 2000 Problem is likely to have significant economic effects, including a recession." Griffith's basic argument is as follows (he supplies evidence for each point). The cost of correcting the problem will be an enormous drag on the economy. And not all companies will get their systems corrected; even those that do may be affected by noncompliant customers and suppliers. As for particular industries, some banks will not be ready at the end of 1999, but (barring bank runs) the banking system won't collapse. Brownouts and some blackouts are expected. The government is lagging far behind. Therefore, given all that, there is potential for major economic dislocations. Strangely, not many economists are taking the problem seriously; an exception is Ed Yardeni, but even he "may be an optimist" in predicting a 70% chance of recession. "I would judge a recession almost certain. Given the interrelationships in our economy, even a small percentage of firms and agencies not being compliant can produce a significant downturn."
