My recent columns on the Year 2000 problem, in which I suggested we just might have a real problem, drew a lot of comment — much of it, as always, a lot more interesting than my own.
From a friend at the FDIC (the Federal Deposit Insurance Corporation): Did you notice the recent announcement from the Fed that it will increase cash reserves at its banks in ’99 in anticipation of greater demand for greenback withdrawals late in the year? I’d say that is a major wake up call to folks to do a little common sense preparation today.
I’m not a market timer, but I’ve already (back in May) moved the bulk of my retirement portfolios out of equities and into bonds and governments. I plan to dive back in to the stock market sometime in 2000 after either the dust clears, or it appears there is much to do about nothing. I figure at worst I’m trading potentially greater stock run-up for lower bond yields for 18 months, and in my “best case” I’ve conserved my principal and accrued gains of the last few years and can buy back into the market when stocks looks cheap again in 2000.
By the way, credit card servicers are busting their guts to get ready for Y2K. Many of them are not accepting, or delaying for 6 to 8 months, conversion accounts from other servicers. I’ve learned this from a recent bank failure that involves hundreds of millions of dollars in credit card portfolios. (The WSJ is working up an article about this failure as we speak.)
From Emmett Redd, Associate Professor in the Technology Department at Southwest Missouri State University (I had said that if the power went out, so might the ability to pump gas): Gasoline probably won’t be too hard to pump without electricity. On many pumps I am familiar with, just take off the side, loosen the belt between the electric motor and spin the pump by hand. Also, most of the tanks around here are above ground (to avoid groundwater contamination). Just shut the valve, “break” open the lines and gravity fill whatever container you have available. The store owner will like your bag of dimes better than the muzzle of your shotgun. 🙂
However, I have lived through enough ice storms where electricity has been out for 2 or 3 days for neighbors of mine. Even our house got cold after 16 hours without the forced air furnace. Therefore, I have always lived my adult life with at least two sources of heat, at least one of which does not require electricity. Wood has been a great primary source for over half of my life. But now my house has a propane heating stove (with a 300 gallon tank out back), baseboard electric (in case I forget to call the propane truck), and a kerosene heater (purchased back during the high fuel price days of 1985, but now used to keep the apple trees frost-free or to warm up the diesel tractor for starting when electricity is not available).
The advice for multiple heat sources applies for every winter here. And don’t forget Jan. 1, 2000 is likely to be cold.
Most of the rest of your list is fine, but Jan. 1, 2000 is too close to the solstice for a solar water heater. Just heat the water on a non-electricity dependent heater.
Y2K or not, the solar electric fence charger should (and is) keeping my cows in the pasture they are supposed to be in.
From Kevin Rasmussen: A pretty in-depth exploration of personal Y2K preparations can be found at: http://millennia-bcs.com/prep.htm
This is a part of the Cassandra project web site, which is a non-profit organization that discusses “Y2K and the Risks to Public Health and Safety.” It’s a neat source of information and anecdotes.
From John Wildenthal: There are a few verified examples of embedded chip failures. You might look at www.cv.nrao.edu/y2k/sighting.htm for some verified problems, including the valve at a UK nuclear plant (scram/failsafe in 20 seconds after Y2K).
Power generation (except for windmills, hydroelectric, and solar) is a process of boiling water-spinning turbines-cooling water, over and over. The fan problem you discussed is evidently not uncommon in automated water valves. DeJager’s Damocles site mentioned that in the context of a sewer plant until DeJager shut Damocles down.
A.T.: I’m not entirely certain what this means or who DeJager is. Damocles I knew in a previous life. (High school, that is.)
From Jonathan Hochman: No doubt there will be some Y2K disruptions. Last year we had an El Nino weather pattern. How many times did we hear about various problems that were caused by El Nino? Lots of people started joking that every little problem must be the fault of El Nino. Those inclined to ‘pass the buck’ will take advantage of the year 2000 to blame all sorts of failures and lapses on mysterious computer bugs.
Having spent a considerable number of years earning a computer science degree, I can give a quick lecture. Binary computers (virtually every device that people commonly call a computer) store numbers as 0’s and 1’s. Depending on how many switches (bits) are allocated to store a number, the number can range from 0-1 (1 bit), 0-3 (2 bits), 0-7 (3 bits), 0-15 (4 bits), and so on.
Some legacy programs, written in archaic languages like Cobol and Fortran, may show two digit years when they print or input dates. However, I see no reason why the programmers would have wasted their effort to program special arithmetic functions valid from only 0-99. In 1999, a year stored as an 8-bit number (0-255) will be stored in the computer as the binary equivalent of 99. When the computer adds one to the year, the computer’s 8-bit storage slot will contain the binary equivalent of 100. Maybe the computer will print ’00’, but in memory the date will still be valid for many arithmetic functions like adding, subtracting, and comparison. The program’s math and logic functions might continue to provide correct results for up to 155 years!
Recently the FAA determined that its non-Y2K-compliant air traffic control computers would fail in 2007 because they stored dates as (I think) 5-bit numbers, 0-31. Maybe the software was implemented in 1975, so 1975 was represented as zero. Failure is expected in 1975+32=2007.
I doubt that many essential devices care about the year. Clocks in computers count up from 0 to 2*2*2*2*2*2*…*2-1. The year 2000 is nothing special to them, because they use binary math, not decimal. They could ‘flip’ (like a car odometer) any time, depending on when they started counting, and how many binary digits they store.
Logically, we should expect old computer software and chips to produce unexpected date-dependent results from time to time, whenever the date exceeds its storage range. We probably have been experiencing these problems all along. In 2000, the biggest problem will be that various systems will print out funny dates, or fail to understand newly input information. However, it does not follow that math based on dates will fail to calculate properly. I very much doubt that the power grid will go down, or that digital toasters will suddenly start burning toast because they no longer know what time it is!
Please put the problem in perspective, and do not be deceived by those who stand to profit from high consulting fees to re-engineer old software. Anybody using such old software should probably replace it with a modern product. I recently bought Oracle stock (ORCL), because Oracle sells complete software packages for running many different kinds of businesses. Why fix the muffler on an old junker when something else is going to break next week? At some point its [sic] better to replace the whole car than to keep spending money on incremental repairs. Anybody in big business worried about Y2K can call Oracle and buy a sparkling new information system, free of Y2K bugs, much less costly to maintain, and providing all the latest features to enhance efficiency. (For small business, I suggest Peachtree Accounting, which is also Y2K compliant.)
A.T.: I hope Jonathan is right, as he well may be. It’s certainly true that a great way to solve many Y2K problems is to get a new system altogether. I’m told this is why many big companies have gone or are thinking of going to an SAP software system, a hugely elaborate but elegant accounting/inventory/everything system that works wonders. One small problem: The system takes about two years to install. Let’s see. What’s August 26, 1998 plus 24 months ….
From Jerome Payne: I read your article on Y2K today and I find it amazing that people are comparing this to a hurricane or a blizzard or an earthquake. When is the last time any of these events impacted the whole world at the same time (relatively speaking — 24 hours to be precise). There is a major difference between Y2K and any natural disaster we’ve faced to date — there won’t be the rest of the country/world to help dig us out of it, they’ll be digging themselves out.
Hope you will rethink the magnitude of this occurrence. The closest natural disaster this will be like would be for an asteroid 1-mile in diameter or so to impact the earth. The whole world would feel its impact — severely.
A.T.: I highly doubt it will be terrible, which is why I suggested there was an 80% chance 2000 would come and go with little more drama than Kohoutek’s comet. But it would be very foolish not to take simple, cost-effective precautions just in case. (Buying in bulk is a good idea anyway. Having an alternative energy source can be a good idea anyway, although it’s obviously not practical for everyone.)
More of your comments to follow.
PS – Thanks to Peter Yeates for pointing out that “Warren Buffet has sold his zero coupon bonds — see www.berkshirehathaway.com/qtrly/2ndqtr98.html Note 4.” What a nice little trade that was. Why didn’t I put $4 billion into long-term zeroes when long-term rates were in the 7% range? But if he’s out now, that may tell you something, too.
Quote of the Day
You know the old saying, 'Two can live cheaper than one?' It depends who the second person is.~A.T.
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