I can understand why the banking industry is mounting such a massive PR campaign, with poll results like this.

-- z (z@z.z), April 20, 1999

Answers

Critical mass anyone? When will the herd move? Will they be allowed to move?

-- David (C.D@I.N), April 20, 1999.

Banks' computer systems suffer failures fairly often. The system somehow absorbs these terrible blows and staggers on without anyone being the wiser.

Interestingly, Gary North read about this survey and somehow entitled this: 55% expect banks to fail! Well, computer failure, bank failure, what's the difference? Seen one failure, you've seen them all, I guess.

-- Flint (flintc@mindspring.com), April 20, 1999.

Flint -- I'm confused. You have said on this forum you are/will be withdrawing all/significant sums from your banking accounts in 1999. I assume you would obviously recommend this to others as well, such as those 55% surveyed who are concerned about whether banking computer systems will fail on 1/1/2000?

Given your consistency, the answer is, "of course", as is mine.

-- BigDog (BigDog@duffer.com), April 20, 1999.

Big Dog:

Yes, I recommend having a few thousand in cash on hand (if possible), at least pending a great deal more clarification of the situation than I've seen so far. Like a *whole lot* of interbank and ACH testing, including at least major European and Japanese banks.

But again, you should recognize that this is insurance. The probability of serious bank problems is high enough to justify this in my opinion based on current information. ANY measurable probability of such serious problems is enough for me. Doesn't mean I'm by any means guaranteeing bank failures or big problems. Right now that probability looks low and diminishing. Not nearly enough for my comfort, but still...

-- Flint (flintc@mindspring.com), April 20, 1999.

Flint -- (and which Flint is this, pls?), I guess we're both "banking" on only a small percentage of Americans doing this. To my mind (maybe yours too, but which one ;-), this, like utilities, is one of those cases where FULL disclosure of unvarnished facts would have been wiser all along. Why should the public be blamed (or this forum, for that matter) for doubting the meaning of "Y2K ready" when we have been given little-white-lies so often (no, not always, by any means, THAT would actually make life easier) by paternalistic figures.

I'm SINCERELY wondering what info the FDIC/Banks/Fed could supply that would be meaningful enough to keep you or me from withdrawing 'x'. Not "could", technically, or legally, but could, credibly. I suppose meaningful tests would qualify, but would they really be communicated in a way that was, again, credible? There is something endemic in the way even facts are spun these days by PR/legal that breeds skepticism in many cases, rational skepticism.

-- BigDog (BigDog@duffer.com), April 20, 1999.

Let me give you one small personal example that, surely, could be multipled thousands of times. I had a Y2K column for six months in our county newspaper as a part of my "doing good for the community." I interviewed a local bank president who made a big show of frankness-openness in his comments, but then told me off-the-record that he was scared and intended to (get this) take cash home at roll-over from the bank! Not to steal it, obviously, but in case of failures so he could help people.

The point here isn't whether failures will take place (he's not an idiot, but, then again, who knows), but the disconnect between "spin" and "honesty". Spin is simply taken-for-granted so much so that small-town bankers are nearly as slick and unthinking at applying it as big Slick.

So, to what degree should I have believed his protestations that their tests were "wonderful", but that he couldn't, uh, give me details.

-- BigDog (BigDog@duffer.com), April 20, 1999.

Big Dog:

As I think you're trying to say, the biggest problem with y2k is that it's so damn borderless. The banker's own jurisdiction can be spotless and he can get just as wiped out as if he'd done nothing. Combine this with the utter unpredictability of almost every date bug, and the unguessable number of those bugs, and the unknown overlaps and interactions among them. Then add in genuine disagreements about where they stand by geeks working on the same project. Stir in the often hidden agendas and motivations of every source of information we have. What you end up with might be incredibly explosive. And it might be a few local inconveniences. And we CAN'T TELL WHICH, or where between them we might fall. Very troubling.

So I just try to make sure my BS detector is always operating, and do my best not to filter all my inputs through my conclusions and end up with my conclusions. If this makes me look inconsistent to the committed, so be it. I do try to evaluate everything as realistically as I can.

Along those lines, North equating computer errors with bank failures raises a red flag. He jumped from an unwarrented assumption to a foregone conclusion without traversing the space between. I see a lot of that here. Reread Art Welling's Great Disconnect post. He nailed it.

-- Flint (flintc@mindspring.com), April 20, 1999.

Flint --- Drop scary Gary for a moment. What I'm driving at here is that the RATIONAL response to the inherent uncertainty is to withdraw "ample" money to meet one's individual requirements. BTW, even $5K to $15K would not be the least unwise (for many famiies, that represents somewhere between one and three months of required funds). As we fundamentally agree.

This being true, Greenspan and bankers are fundamentally misleading the public, because THEY claim it is IRRATIONAL to do this, implying (heck, saying) that the level of uncertainty is utterly trivial. Omitting the ESP effort to read their minds (too boring), I only illustrate the gap between spin and reality (it's hardly radical to point to uncertainty as we, who often quarrel with each other, are both doing).

Leaving that for a moment to speak for itself, the question is, how RATIONAL is the American public? My bet: surprisingly more rational than the planners like to think (cf the poll that started this thread). It is HIGHLY PLAUSIBLE that some serious percentage of that 55% are going to withdraw serious funds between September and December, not to mention many of the businesses for which they work.

Consequently, it is at least possible, if not likely, that one of the surest early consequences of Y2K, pre 1/1/2000, will be a banking lockdown.

Your turn, Sherlock.

-- BigDog (BigDog@duffer.com), April 20, 1999.

My crystal ball is no better than yours. I think your concerns, while rational, are unlikely (certainly not ruled out -- let's say 20%?)

In the first place, 55% of the people have nowhere near 5-15K in the bank. 55% of the people live from paycheck to paycheck, and fall a little short every time. In the second place, I think simple regulations would inhibit a massive bank run -- limits on cash withdrawals or whatever. In the third place, I think runs are unlikely because they're too far outside people's habit patterns. Not many people have big piles of currency sitting around anymore. Lots of direct deposit, automatic payments, etc. Finally, I expect that the Yourdon response will occur if conditions require -- that is, massive disclosure of positive information, just like your banker.

Yeah, I know, I'm also hoping that few people will be as rational as you or I.

-- Flint (flintc@mindspring.com), April 20, 1999.

Wait a minute! You guys are missing the really OBVIOUS question that this statistic begs!

If 55% of Americans really do expect bank computer systems to fail, how come apparently veryveryveryveryveryvery FEW are actually taking out money? (If that many had, the banks would already be in pain -- I've read the statistics on how little it actually takes to create a problem, thank you Federal Reserve system).

For that matter, if 55% expect the banks to fail, why wouldn't they expect other things to fail? Thus far preparation seems darn near invisible to me.

This number just seems ridiculously high, considering that there is no sign in any other area that 55% of Americans even have a CLUE. Most people I mention Y2K to, their eyes glaze over.

PJ in TX

-- PJ Gaenir (fire@firedocs.com), April 20, 1999.

PJ -- Most of the execs and wealthy people I know pride themselves on their ability to get out just ahead of the sheeple. I think they're nuts (though, mind you, they are wealthy and I'm not, which tells you something) but they are thinking November for exiting the markets and the banks, maybe even early December.

Flint -- There is a lot of money to be withdrawn by those 55%, more than you project. Then, add in business as well ......

-- BigDog (BigDog@duffer.com), April 20, 1999.

Thought I would throw my 2c in from north of the border.

At this point in time 55% of the (American) people may think that there will be Y2K related bank computer failures, but they are obviously not concerned enough about it to be taking much cash out of circulation at the moment.

What will raise their concern to a sufficient threshold that they skedaddle down to the local bank and cash in their accounts? And will it happen to enough of them at the same time that the snowball effect takes over?

I think there would have to be some really, really bad Y2K news for people to stampede down to the bank. As I posted on an earlier thread, taking money out of the bank (assuming, of course, that one has money to take out) as a Y2K precaution ranks right down there with sorting out the junk in the garage on the old "to do" list. If we get through to November without upset, then there is a good chance that nothing will happen, bank run wise. By November the utilities and the telcos should be citing chapter and verse about Y2K readiness/compliance.

Don't forget that electronic forms of payment will still be working up to 31 Dec - debit cards, credit cards, EFT, even the cheque clearing system. So don't spend paper money in Dec, use the alternatives. (I happen to think that electronic forms of payment will still work after 31 Dec, but that probably puts me a minority here.)

As a final point: there has been discussion about corporations giving out the unvarnished truth. I received a newsletter from the Toronto Dominion Bank (one of the big 5 in Canada) that related their Y2K status. They have completed everything up to and including Enterprise testing. Presently they are working on industry wide testing, which they say is on track to be completed in June. Do I believe them that this is the unvarnished truth? Yes, I do. Enough that I will leave the majority of my cash in the bank. I will have enough cash on hand at 31 Dec for a couple of weeks of groceries, gas and, most importantly, beer. If the majority on this forum is correct then I can at least get hammered as I prepare to deal with TEOTWAWKI.

-Keep your stick on the ice-

-- Johnny Canuck (nospam@eh.com), April 21, 1999.