R. Bennett 4/22 WDC Users Group speech - Cory Hamasaki

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(Note: My Canadian friend mailed this to me this afternoon and said, "Veddy interestink." These are Cory Hamasaki's notes from senator Robert Bennett's - chairman - Senate Special Committee on Y2K - talk to last week's Washington, D.C. User's Group meeting. I'm putting them here in the forum as a duplicate to get it in front of a few more people. The original is located at the url below. Cory Hamasaki's DC Weather Reports (including these rough notes) are located at http://www.kiyoinc.com/current.html. Check in there for the finished product that will come from these notes, as well as other interesting reading... Bill)

-DRAFT- -DRAFT- -Please refresh from http://www.kiyoinc.com/WRP118.HTM

WDC Y2K meeting April 22, 1999, Fannie Mae Headquarters.

I took these raw notes on my laptop. To the extent of my typing skills, I have transcribed Senator Bennett's speech as accurately as possible. The notes from the Q&A session are more abbreviated as these were not paced and there was more noise.

Senator Bennett:

How many were here last time?

-hands go up-

hmmmm, I'll have to watch what I say.

One question... Are we going to be all right. Well, it depends on your definition of all right.

We have made more progress that I expected.

I am not as pessimistic as I was a year ago.

The discovery of the failure rate of embedded chips is not as high as predicted, 2-3-5%.

John Koskinen and I talk at least once a week. Doing everything we can to prevent Y2K from spinning off into politics.

I was talking to Intel about embeddeds. Is this a big or small problem?

Intel: both answers are correct.

2-3% Y2K impact. .02% Y2K failure rate.

Why am I less pessimistic?

More people have made more progress. Big people spent more money. 500, 600, 750, 800 million dollars spent by Citicorp. At least it's increasing at a decreasing rate.

Doesn't mean it's solved.

Pulled of a coup on the committee, got two extra members 4 dem, 3 rep, Senator Ted Stevens, Robert T. Byrd, from the appropriations.

Senator Stevens laid out our 602(b) allocation, 14 line items, 3.2 Billion dollars Y2K.

Koskinen calls Bennett, Senator, we had no warning that you were going to do that.

Y2K 2.3 B, Koskinen said 4.7 B, we added 3.2 B, to 10.2B dollars for federal Y2K. Problem is finding money if we need more this will be a problem. Why? War, for one, occupying Yugoslavia. What do we get if we win? 1st prize is Kosovo for the next 15 years.

Everybody is doing stove pipe. Nobody is looking across agency lines.

Here are my concerns:

1- Powergrid, 2- Telcos. 3-Transportation, {trucks, shipping, high seas} we import 50% of our oil by ship. pipelines. gotta worry about embedded chips and pipelines, 4-Banking, liquidity, 5- General government services, state, federal, local. 6- General business, 7- Litigation, the cost as the lawsuits get filed. Lawfirms setting up Y2K departments, graduates planning to retire on Y2K. 8-Healthcare, largest single industry.

How are we doing?

1. Power grid failure is less than 10% Close to zero. Individual power companies will fail.

I was at a power plant, they said, "Watch what happens," power clock at Salt Lake City roll over worked. You tried this before I got here. They said, we did it over there, -points to wall- it failed.

2. Telco- will be a dial tone just about everywhere. Could be some failures.

3. FAA insists they will be fine, well, they missed March 31, -laughs- Koskinem says feds 92% compliant. HCFA problems, IRS problems, Assured that supertankers could be operated manually. Feeling pretty good.

4. Banking, out front. Do not recommend that you take *all* your money out.

5. I have some real concerns. Presumably we can get the federal government compliant. Some states in good shape. Utah, Texas good shape. Some muni's will have trouble. We can't get a real handle on that.

6. General business. Big business probably OK, really small OK. Publicity, SBA loans. Big businesses forcing mid-size companies to fix their systems.

7. Healthcare. Sen. Dodd and I went to a hospital, Administrator said this, this, this, won't work. Kidney Dialysis machines won't work, There were no Y2K compliant machines on the market two years ago. What will you do with the 2-year old machines. We will bury them. The health care thing is still scary. Smaller clinics, doctor's office. 8%-20% of medical devices not Y2K compliant. Some failures not life threatening. Some, like the kidney dialysis machines are life threatening.

Area of greatest concern. Overseas. The pattern of compliance around the world is very spotty. Good: UK, Canada, Mexico is coming along, Netherlands, Sweden, Singapore, Hong Kong.

Not there yet: Germany, Italy, Japan

Doing nothing: Third world countries, Oldest computers, sold off to find their way there, Eastern Europe, 360/370 knockoffs, pirated software. Very concerned, Russia. Problems all the way across, nothing's going to work. (no one will notice.) -laughter- Working with Russians in the defense area, unfortunately the cooperation stopped because of the Kosovo war.

Questions: -these were submitted in writing, this copy is spotty because unlike his scripted speech, the Sen could not pace out his statements.-

Q. Where will you be? I will be in Salt Lake City, I will not be on an airplane. I *will* fly if the airline is willing. -Sen. Bennett explained that he believes that airlines will make a safe and correct decision.-

Q. World wide crisis or bump in the road? In this country it will be a bump in the road, ... now how high the bump is.... -laughter-

-The following questions were taken from the floor, the questioners tended to ramble-

Q. Are you satisfied with the depth and accuracy of the information you're getting? Oh. The only people who are testifying have it under control. We assume that things are worse than we are told. We're not getting the snow jobs we were getting at the beginning. We're not getting people lieing to us.

Q. Admin moving decisively? I give Koskinem high marks. He's done a first class job. Do I think there's some wishful thinking? Of course. I will not be runing for president in 2000, I don't have enough hair.

Q. How about non-mission critical systems taking down mission critical? Most concerned about Defense Dept.

Q. What about long term consequences? Can see past 18 months. DOD will be dealing with this for years.

Q. In effort to calm down teotwaki, the feds are sugar coating the reports and local govs are getting complacent? Yes, there is some of that. Concerned about DeeCee, not by accident that I will be in Salt Lake. -laughter-

Q. Different story from GAO and Koskinen? GAO works for me. Koskinen works for president. -laughter-

Q. Embedded? Still there but not as enormous as we thought.

Q. Bruce Bench, 25% We have lightlighted the chemical industry as vulnerable.

Q. I grew up in Miami in the 60's, we took precautions. -this was a long question and was fishing for the Senator's position on preps.- Alsop-fortune. Bennett-Dodd are advising preps. SoCalEdison is ready.

Q. What is the risk of civil unrest? Don't know, Impossible to assess. Could be a local community unrest, looting. -I didn't get the entire answer but the Senator implied that things would generally be OK-

Q. Overseas? Sure, unrest. -Similar-

Q. Nuclear weapon? Won't be an accidental launch.

Q. Year and a half from now? Lawyers will be following this closely.

Q. Paula Gordon of GWU: Effort like a federal energy office? Embeddeds. Bennett: This is a challenge. My committee has no legislative authority. All we do is recommend.

Q. What about overseas? We cannot dictate to another sovereign country what they will do. -laughter-

Given the effectiveness of the Kosovo bombing, I stand by my words. -laughter-

Many Y2K coordinators were appointed to attend meetings. They have no ability. -Senator Bennett seems to be addressing Bozo the QA clown and the powerpoint handwavers who infest the meetingspace.-

Companies are stockpiling raw materials.

Summary: There will be an economic consequence. It may come in ways that some do not anticipate. We're already seeing stockpiling, I don't mean food and water in basements, a company got a large order from a client, called customer, client said we're building a stockpile for Y2K.

We will have a very strong 3rd and 4th quarter 1999, inventory recession in 1st, 2nd quarters 2000.

We do know that things will go wrong.

Y2K is stimulating a flight to quality. Purchasing agents are quietly shifting to suppliers that will be all right, even if more expensive.

We're seeing international investors making decisions based on infrastucture compliance. Money is quietly shifing to more secure countries. Money may come to the U.S.

An economist said, Y2K may cause shortages. Shortages cause inflation.

All those forces set loose, capital flight to strong econmoy,

Will be an economic impact. U.S. as a whole, right now looks better.

Consequences will be with us for years.

Date to watch is January 20th, 2000. Will take that long for things to deteriorate. Bridges, contingency plans building. Ultimate collapse will take 3 weeks. Supplies run out. Welfare checks missing. Will start to deteriorate. Don't breath easy until February, then you have leap year and it will start over.



---- End Senator Bennett's talk, April 22, 1999 --

Bennett essentially said, "Watch Out". While he grossly underestimates the Enterprise Systems problem and overestimates the progress, his summary is in line with the WRPs of about 6 months ago. Things will fail in "strange and wonderful ways." There will be an economic consequence.

I've been rambling about inflation, not deflation, as a risk. Senator Bennett's summary is the first time inflation has been raised as possible result of the meltdown.

Long term WRP readers will recognize that although Senator Bennett said that he is more optimistic, in reality, his position has actually drifted into alignment with the WRPs.

The embedded problem is smaller than the Enterprise Systems problem. There will be economic consequences. We will be surprised at the strange and wonderful nature of the problems. There is a risk of inflation, at least as great as the risk of deflation. There will be riots, outages, shortages, in at least some places.

Get Ready.

Senator Bennett doesn't understand that we are out of time to fix the Enterprise Scale systems and that these won't be fixed in oh, 3, 6 hours, not even 3, 6 weeks. These can take months to fix.

Oh, and you denial-heads, please, don't argue with me. Call Senator Bennett and give him your big-thoughts.

cory hamasaki 252 Days.

-- Bill (billdale@lakesnet.net), May 01, 1999


Thanks to the info. it seems to me these folks are trying to snowbal us. As I read more and more of officialdum response, I become more and more cocerned. I just work harder to get my community prepared and communicating. Thanks Again Steve Dyer

-- Steve Dyer (bootbel@aol.com), May 03, 1999.

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