Worldwide Bank test a flop? Hey Poole - please explain this!

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Yesterday's story made everything sound peachy keen:

Banks Worldwide Make Confident Y2K Test Leap

"``We've had reports from the European Bankers Association, Australia, CHAPS in Great Britain, TARGET (the European Central Bank's payment system), France, Germany, Hong Kong, Italy, Japan, Korea and Poland -- and they are all excellent,'' Thomas said."

But today's report isn't quite so elaborate. In fact, though the number of banks has mysteriously increased from 190+ to 500+, the only one that is now claiming success is one bank in Germany!

German Banks End Y2K Test Trouble-Free

So is it true that noo news is good news? In this case, I doubt it. In fact the only news we hear about is good news, the rest is not even mentioned.

-- @ (@@@.@), June 13, 1999

Answers

Uhhh, that is one country, sorry, out of 19. Well, what about the other 18 countries?

Perhaps they began testing some of the more complicated transactions, and suddenly got very quiet?

Methinks the worldwide flow of currency is goin to come to a screeching halt this January. By the way, those of you who get their paychecks deposited electronically, I would recommend changing that arrangement while you still can. Seems to me you'd have a better chance of receiving a paper check from your company than any electronic payment from a bank. At least you might be able to cash it somewhere or use it for barter.

-- @ (@@@.@), June 13, 1999.


Hey @, I'm preparing for a 10, let alone an 8. But silence from the other countries doesn't mean much, anymore than this report of success. Since I KNOW my local bank president has, shall we say, lied about certain things, of course it is possible (likely) that little "white lies" are being told here too. It's also highly probable that testing has shown up areas of success.

The harder to wish-away fact is that the serious banks have spent big bucks to get to this very tentative point, while many other serious banks around the world have apparently "required" a mere fraction of the same amount.

Sure, as was discussed on a thread yesterday, the lateness of the testing CANNOT bode well, though, like all Y2K-ish things, only time will tell. SOON. But the disparity in known commitment between major banks around the world is scarier, IMO.

-- BigDog (BigDog@duffer.com), June 13, 1999.


I think you could read too much into this. Consider that both reports are from Germany. One says they're all working, the next day they release one emphasizing the German banks are working. Not hard to understand. My question is just whether this is a real rigorous test or another public relations event.

-- Shimrod (shimrod@lycosmail.com), June 13, 1999.

Agree with Shimrod. This article is from Germany, written by a German reporter for a German audience. It does say that the test found no problems.

I consider this primarily a PR event. The *real* tests happened previously (they've been going on for over a year now), the problems were found and fixed iteratively. No bank in their right mind would call in the press to witness a real test. Real tests are performed to identify real problems, the last thing they want publicized. A 'demo test' like this is effectively an announcement that the real work is complete. A very good sign.

-- Flint (flintc@mindspring.com), June 13, 1999.


"A 'demo test' like this is effectively an announcement that the real work is complete."

Not necessarily.

In my experience with Fortune 500 size corporations, a demo test can be ordered and publicized for any number of reasons. One is success. One is failure. That is, if deadlines are of desperate importance publicly but the tests aren't going well, it is quite possible and usually very useful to report on the success of a "piece" of what was/is needed and leave the impression, without outright lying, that the "whole project" is going according to plan. Meanwhile, behind the scenes, a frenzy of activity is going on to try to make up the lost time and figure out what the heck is really going wrong.

Yeah, it could be that these tests mark a critical watershed in worldwide banking. I sure hope so. I'd like to use up my "10" preparations peacefully over the next five years while Y2K is a "1".

But you're assuming too much.

-- BigDog (BigDog@duffer.com), June 13, 1999.



Big Dog:

Of course, you're right. Nothing about y2k is ever certain. I can't help be amused that when faced with material that has a very high probability (not a certainty) of being very good news, the response sounds suspiciously like "nobody knows." When optimists use this tactic, they're mocked.

I too wish we were seeing more of these events. I also wish this article had given a better indication of the degree of coverage of the transaction spectrum. I think it's most likely that these are 'graduation ceremonies', with possible exceptions. Without such ceremonies, of course we can't tell if any education is happening day to day (except for the burn rates of Big Dollars).

I think it's highly likely that numerous real tests have gone bad and uncovered big unexpected problems. But that's good, isn't it?

-- Flint (flintc@mindspring.com), June 13, 1999.


Flint-

"A 'demo test' like this is effectively an announcement that the real work is complete."

Hooboy! You haven't seen many software presentations have you? It is soooo easy to rig a test so that it looks like everything is working. It's done by staying away from the parts of a system that don't work.

If you're a bank and have 300 transaction types but only 15 are Y2K ready, you'll run your 100,000 'press demonstration' transactions using only those working types. The press reporting the event won't know that 285 other transaction types still don't work.

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), June 13, 1999.


TECH32:

Yes, I know this. I've pulled 'demos' at trade shows with hidden wires to the competitor's machine (just like in Dilbert). Of course there is no guarantee that such demos mean *everything* is working perfectly. Of course we don't know exactly what they mean. We *do* know that the banks are under a lot of pressure to get it right, we know they've been spending a bundle, we know at least some (likely a *lot*) of testing has been happening without publicition, we know there's a motivation to exaggerate or misrepresent the degree of progress actually made if such mendacity is required.

And no, we don't know how many transaction types were represented, or how many there are, or what transaction type mix is normal in everyday processing. Perhaps the best questions are: To what degree was this test bogus (if any); and Why did the banks decide to hold it now, rather than have a more realistic test later (if that's the case)?

No good news, just like no bad news, is bulletproof. Anyone can *always* find some plausible reason why either might be far from reality. Let's say this sounds like a positive sign, OK?

-- Flint (flintc@mindspring.com), June 13, 1999.


I can believe that possibly the Germans got their s**t together, they got some pretty smart bastards over there. But as far as the guy in New York making those claims yesterday, can't help but be suspicious. Since the news report was issued from Germany, they probably just called him on the phone, and they didn't have anyone at these locations to verify the testing.

Well it will probably be humorous to hear what comes out tomorrow, but remember the New York Clearing House is really the American cash register for the NWO elite controlled banks. They don't want anyone to know that all these banks are owned by the same few people, so they exist as smaller entities linked through the NYCH, which makes it is easier for them to add up the totals and see how filthy rich they are getting.

Of course the major significance of this, whether you believe in the NWO or not, is that the same people who control the banks also control the media. As Big Dog indicates, they can say whatever they want about results of Y2K tests while lying through their teeth.

Anyone who is familiar with the NWO establishment will immediately recognize some of their primary banks and the people involved. Take a look at the 4th link down, the "International Advisory Council" on the corporate directory for Chase Manhattan, and you'll see at least a couple familiar names:

Chase

Ah yes, our favorite tycoon, David Rockefeller, and his partner in crime, our old buddy Henry Kissinger.

-- @ (@@@.@), June 13, 1999.


Forgot to put the link to the NYCH:

NYCH

-- @ (@@@.@), June 13, 1999.



This is good news. Not good enough to keep money in the bank, however.

-- br14 (br14@bout.done), June 13, 1999.

There are, what 10,000 banks/financial entities in the USA, and something like just under 200,000 worldwide.

There is ONLY ONE TEST poole you simpleton.

If the Banks survive any bank runs, market crises etc. by 2000 they will have been very fortunate.

The rollover will be an ELE for the Bankers, no question at all in my mind about it. Speak to some insiders, to some folks in the IRS, to some credit card insiders. It's gonna happen.

The question is - what will be the fallout from it?

-- Andy (2000EOD@prodigy.net), June 13, 1999.


ANDY, whats an ELE?

-- Gambler (scotanna@arosnet.com), June 13, 1999.

Huh,

ya didn't see deep impact? :)

Extinction Level Event => for the banking system of sytems, the proverbial spiders web that circles the globe,

oh yes, they've all pulled their fingers out and have been testing all year, didn't you know that? All 200,000 of them or whatever the figure is (I think nobody knows for sure...)

-- Andy (2000EOD@prodigy.net), June 13, 1999.


Check out this thread... http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000Wyn "The problem of corrupt data fatally infecting the world banking system" some [sniplets] From me to Flint... Let me preface this with saying that I'm more of an Airline realtime systems guy - however I spent the last 5 years working with VISA, the last three of which was spent in the "Coverage" and "realtime back- office" depts., 24 hour "firefighting" of online transaction problems, so I have a pretty good understanding of the EDI EFT scenario. E.g. Yes banks have ISO formatted (and others) transactions that follow well established protocols regarding data interchange - i.e. set field lengths, security keys, algo's, checks and balances etc. etc. However rogue transactions can and do get through the system - these are usually caught fairly quickly and code can be changed or fallen back, or ATM parameters for example can be dynamically altered or patched, or banks or credit card ranges can be blocked to prevent contamination etc. etc. This can all be handled now by dedicated teams of "firefighters" - all the major players have them - VISA, MC, Amex etc., and each major bank has it's own back office teams too in addition to the normal IT staff not on duty but on call. The volume and nature of problems now can be handled - the staff is in place world-wide. Now factor in y2k and the number of banks that are simply not ready and will effectively contaminate the system with buggy transactions... You would obviously think that a compliant bank would, with all it's failsafe software systems in place, be able to spot a rogue transaction and handle it appropriately - usually issue a decline, or bounce the TX, or whatever. All my research suggests that these s/w systems have been beefed up - but it is my contention that correctly formatted transactions, that will have date arithmetic induced calculation errors, will get through all the checks and balances and be legitimately processed by compliant and non compliant banks alike. The effect of processing inaccurate and essentially corrupt transactions will be to cause a loss in confidence in the Banking system of "Systems" - the inaccuracies will beget inaccuracies ad nauseam and very quickly the whole system will be "contaminated" and effectively useless. I would refer you to the Gary North site and his imported data archives for high level overviews from experts. Also last year I initiated a "VISA is toast thread" - this one gets specific, and I posted a discussion that took place on csy2k where my theories were supported and validated by many systems and EDI experts in the field. More recently Bradley Sherman and Hoff Meister on csy2k issued me a challenge to provide a specific technical scenario of how this could happen. I borrowed a very good example from No Spam Please and posted it. The end result was that my detractors could not pick my theories apart. Do a search on my name under Usenet or deja news and you can read the thread together with replies from supporters and detracters. Flint - I'm glad that you are taking an interest in this - very few people do. They are blindsided by PR from banks - don't believe it. As Alan Greenspan said - and I'm paraphrasing- "99% is not good enough, we must be 100%" (referring to the integrity of data interchange in the Banking Community). Nobody has taken up MY challenge - i.e. explaining to me just how firewalls can be set-up to filter out the corrupt data from "the system" that I've been talking about. With your permission Flint I'd like to post this discussion we are having one more time to see if any newbies on the forum can shed some light on this important problem. After electricity - banking is needed to run the wheels of commerce. And the system is in grave danger of collapse, believe me. [end snip] and another - my reply to Hoffmeister [snip] "The issue is *not* whether correctly parametered, but bad data, will be passed. It always has, it does, and it always will." ####### I agree, part of my job at VISA before I left was to trace transactions and find out how they got through the system. When we hit 2000 it is my contention that these types of transactions will completely overwhelm the system. ####### It is the attempt to extrapolate this into a collapse where you fail. ####### In your eyes.####### As an overall phenomenon, yes, the Euro is much smaller than Y2k. But, for those financial institutions involved in the Euro, the comparison is valid. If you wish, I can provide links to the estimates on effort comparing the two. ####### Infinitely smaller. No comparison. We'll have to disagree on this but it is basic common sense. There are 11,000 banks in the USA alone. Way way more world-wide. How many entities in Europe had to change their code? No Comparison. Because y2k affects every entity that interracts electronically with Banks world-wide... This includes credit unions, credit card companies, post offices, government money centres, etc. etc. ######## The point is, the Euro conversion, for those institutions affected, is very comparable to Y2k. Whether or not date arithmetic is involved in the Euro is irrelevant; ####### "Whether or not date arithmetic is involved in the Euro is irrelevant;"... Hoff - how wrong can you be... It is TOTALLY relevant. How would Euro currency transactions work NOW if the date was Jan 1st 2000? I suspect it would be a shambles as very very few banks have announced compliance to date. In addition (pun intended), it won't just be date arithmetic problems. There will be all sorts of other weird and strange code induced problems surfacing. ####### The Euro stands as an example of a software conversion, affecting multiple institutions simultaneously, that directly affects amount calculations and inter-company transfers, the very transactions that you claim will collapse the system. ####### Yes of course but it isn't 2000 yet is it? Let me say that again - IT IS NOT 2000 YET!!! Currency Conversion as in Euro- Conversion does not extrapolate forward, unlike for example Galileo (United Airlines) which recently announced that it has successfully made a glitch-free booking 331 days ahead into January 2000. Currency conversion simply does not work this way as the markets constantly fluctuate - all conversion is realtime, not batch, and take place in a matter of seconds on the GMT date. Hoff, I think it's YOU who has missed the point here. Date arithmetic errors are NOT occurring NOW - they WILL occurr in 2000. ####### Your hypothesis is the number of errors introduced will overwhelm the system. The fact that, even with errors introduced, the Euro has not collapsed the European Banking system stands as a direct refutation of your points. ####### Your original premise was and is wrong so all your points after are invalid. I said at the top of this page, and I quote... "Yes banks have ISO formatted (and others) transactions that follow well established protocols regarding data interchange - i.e. set field lengths, security keys, algo's, checks and balances etc. etc. However rogue transactions can and do get through the system - these are usually caught fairly quickly and code can be changed or fallen back, or ATM parameters for example can be dynamically altered or patched, or banks or credit card ranges can be blocked to prevent contamination etc. etc. This can all be handled now by dedicated teams of "firefighters" - all the major players have them - VISA, MC, Amex etc., and each major bank has it's own back office teams too in addition to the normal IT staff not on duty but on call. The volume and nature of problems now can be handled - the staff is in place world-wide. Now factor in y2k and the number of banks that are simply not ready and will effectively contaminate the system with buggy transactions..." The staff is in place to handle problems, just a riot in Marseilles and a buggy Dutch Bank, all handled. We know nothing about what went on behind the scenes and probably never will. Again the success of the Euro argument is a weak straw man and should not give one false hope for the Banking y2k rollover, there is no comparison. ####### Banks have always had to address the problem of incorrect transactions. What I have seen indicates that Banks are well aware of the potential, and have plans in place to deal with it. ####### OH REALLY??? One final time Hoff - put up or shut up. Exactly WHAT "plans" do they have "in place to deal with it." HOW will they filter out incorrectly calculated data. This is what you said above, and I quote... ""The issue is *not* whether correctly parametered, but bad data, will be passed. It always has, it does, and it always will." SO HOW WILL "THEY" (ALL BANKS AND ENTITIES THAT FEED DATA INTO BANKS, EVERYWHERE, WORLD-WIDE, WITH 100% ACCURACY AS DEMANDED BY ALAN GREENSPAN) PULL OFF THIS MIRACLE??? I'VE ASKED THIS QUESTION OVER AND OVER AND ***NOT ONE*** POLLY HAS BEEN ABLE TO EXPLAIN, SO THAT WE ALL UNDERSTAND, HOW THIS CAN BE DONE. I'm not holding my breath on this one :)####### You say no bank has addressed this issue, but you are wrong. What I have seen documented is a dual approach; significant testing with major partners pre-Y2k, to verify compliance, ####### Notice the words "major partners". I'm sorry Hoff, this does not cut it. The nature of a the system we have in place is that a transaction originating in an entity in Okinawa on a Wells Fargo account in Sacramento could quite easily pass through many many entities before an approval and the TX gets back to Okinawa. Have "they" tested all these possible paths? Of course not - it cannot be done, you know that as well as I do. Corruption could occur anywhere along the data interchange routes. Compliance simply cannot be verified untill rollover. There are an overwhelmingly amount of non-compliant banks world-wide. These NCB's will feed corrupt data into the system unless they are isolated. If NCB's are isolated there is NO BANKING SYSTEM ANY MORE. ####### and increased scrutinization of transactions post-Y2k, including the use of statistical sampling techniques. ####### Hoff, that's called shutting the door after the horse has bolted. You can statistically sample bad transactions up the proverbial wazoo but the damage will already have been done. You have no idea how impossible it will be to untangle the mess. Done deal - can't be done. ####### I'll ask this one more time... How will 100% of allegedly compliant Banks world-wide co-ordinate filters or firewalls to prevent the propagation of y2k induced corrupt imported data from non-compliant Banks and entities world- wide? That's all I need to know and I'll shut up :) Later, Andy [end snip] my comment about Greenspan's comments [snip] This is what Alan Greenspan had to say about Banking today Hoffmeister. It backs up EXACTLY what I've been saying - take particular note of the last sentence and the implications for imported data to US Banks from overseas. This statement is really quite shocking....... "Greenspan: We are on a two pronged policy. One.. do as much as we can and we've done an awful lot and will continue to do so to prevent anything of significance happening where we have the capability of double testing and checking as we can. And secondly, to have a whole series of potential actions that we would take in the event that something does happen. And we will continue doing that obviously on an increasing manner through the rest of the year. Things are, I must say, going better than I was concerned about six months ago. People are getting serious. We are inter-relating with all of our banks and the testing systems are going well. So that the worst possibilities I think are behind us and most of those are really interfaced with the rest of the world... Senator: right. Greenspan: ...where we don't really know how well they are managing." I CANNOT BELIEVE HE JUST SAID THIS TODAY... "WE DON'T REALLY KNOW HOW WELL THEY ARE MANAGING" Hoff and ?????, What do you make of this? You assured me earlier that major player testing was well in hand. Greenspan says the complete opposite. I tell ya, the systems are gonna tank at rollover, big time. -- Andy (2000EOD@prodigy.net), February 23, 1999. [end snip] and a final skirmish [snip] ????, This is what you accused me of doing....... "I have tried to explain something without going into the technical details of how the systems function, are programmed, or designed. It is obvious by your last statement that no matter what anyone says you are going to refuse to believe them and you are convinced the end is at hand. So I can only believe that your only purpose for posting here is to spread additional panic to whomever listens even though you yourself do not have evidence to support it." ???? - I have been studying this problem for several years now, I have read all the articles in the Gary North Imported Data folder amongst many others, have you? I have worked at the sharp end in Banking for five years, I have worked internationally in IT for 21 years, I have dealt with buggy transactions, tracing them on their journey from entity to entity around the world on a day to day basis, have you? I described Alan Greenspan's last shocking statement on Monday of this week - I'll repeat it again - he said, and I quote "The worst possibilities I think are behind us and most of those are really interfaced with the rest of the world where we don't really know how well they are managing." Now in light of this, where our Banking point man effectively says that the 11,000 US Banks have no idea how well the other 100,000 + Banks in the world are managing, you wonder why I'm concerened??? He said, and I quote "the WORST possibilities are really interfaced with the rest of the world." Do you not find that a teensy weensy bit alarming ???? or does the USA exist as an island unto itself? The fact that the 11,000 allegedly compliant US banks have to interface with 100,000 + Banks where Greenspan has no idea "how well they are managing"... the fact that invalid data gets through the system we have in place now, the fact that this invalid data streaming into the 11,000 US Banks on Monday morning, the 3rd of January 2000, will be processed by these 11,000 US Banks AS IF IT WERE VALID... The fact that this invalid data due simply to y2k bugginess will EXPLODE magnitudinally on the 3rd of January 2000 as compared to the 31st of December 1999... The fact that the sheer volume of this invalid data if not caught and fixed IMMEDIATELY will propagate throughout the world-wide financial system like a systemic world-wide Ebola outbreak... I take umbrage at your statement above that the only reason I'm posting is "to spread additional panic to whomever listens even though you yourself do not have evidence to support it." - your rather insulting words to me and this group. ???? I don't even know who you are, you come into this forum with a fake e-mail id and despite all the sources I've quoted and evidence I've presented in this thread and others that I've cited (go back and read them) you have the audacity to accuse me of spreading panic? I've been saying on this forum and csy2k that Bankers have not come up with a solution to this problem for a long time now. So ????, whoever you are, I'll ask you this question (AGAIN), and If you can answer it I will retract publicly everything I've said on this matter both here and on csy2k... This is my question, which both you and Hoff and ALL the Banking shills that monitor this forum and csy2k have conveniently IGNORED... "How will 100% of allegedly compliant Banks world-wide co-ordinate filters or firewalls to prevent the propagation of y2k induced corrupt imported data from non-compliant Banks and entities world- wide?" I CHALLENGE ????, Hoff or anybody to answer this question and present a technically workable solution to this dilemma, as well as a politically acceptable way to persuade every organization on earth to adopt it and apply it in the time remaining (circa 150 - 180 working days left), including all those that have started their repairs using conflicting standards and approaches. If you guys cannot do this then my and many many other experts' consistent prediction is that corrupt data will HOSE THE SYSTEM OF BANKING SYSTEMS. If firewalls and filters are not put into place then this WILL happen - don't just take my word for it read ALL the articles on imported data - it is a very real and devastatingly catastrophic problem for all linked computer systems. So come on, cut the personal crap, just answer this one itty bitty litle old question. Hoff, all the to-ing and fro-ing over the specifics and sematics of date calculation, windowing, date arithmetic etc. essentially are side issues. The ULTIMATE issue is the question that I postulated above and have postulated many many times without even ONE attempt at an answer from ANYONE, let alone the Banking shills. I'm waiting, I'm not holding my breath. Best regards, Andy Two digits. One mechanism. The smallest mistake. "The conveniences and comforts of humanity in general will be linked up by one mechanism, which will produce comforts and conveniences beyond human imagination. But the smallest mistake will bring the whole mechanism to a certain collapse. In this way the end of the world will be brought about." [end snip] One final thought, from Gazz North... The Senate Banking Committee heard testmony from Federal Reserve Board Chairman Alan Greenspan on February 24. Members asked questions that avoided specifics, and then they refused to ask follow-up questions that would have required embarrassing answers.

Here, for the sake of future meetings with Mr. Greenspan, are some suggested questions:

"You have said that 99% compliance is not good enough for the banking industry; it must be 100%. How many banks in the United States are 100% compliant?"

"None? I see. Well, then, how many of them are y2k-ready?"

"None? I see. Well, then how how you know if any bank with over 10 million lines of code can become compliant?"

"What good does it do for a depositor to have a print-out of last month's records when his bank's computer is down? Can the teller hand him cash if she does not know what his balance is today?"

"How will credit cards work when they access records of a bank account when the bank's computer is down?"

"How will a seller verify that a check is good if the computer of the check-writer's bank is down?"

"How will sellers verify that a bank is still solvent and checks drawn on it will clear during the early months of 2000? Will the FED publish a daily list of still-solvent banks?"

"Do you regard the banking system as international?"

"You do. Fine. How many banks are compliant abroad?"

"You don't know. I see. Would it be fair to say that if half of the banks outside the United States are not compliant in 2000, then there is no way that the U.S. banking system can become compliant, given the problem of shared data?"

"How can noncompliant data in a noncompliant bank be locked out of the computers of a compliant bank?"

"What percentage of banks in the U.S. can be locked out without causing a collapse of the U.S. banking system?"

"What percentage of foreign banks can be locked out before the U.S. banking system collapses?"

"We have been told that the 19 largest banks in Japan plan to spend, collectively, about $1 billion to fix y2k, compared to Citibank, which will spend $850 million to $925 million. Would you say that the Japanese banks are facing about 6% if the y2k remediation problems that Citibank is?"

"So, you think they are facing much the same degree of challenge. Then do you think the largest Japanese banks are likely to meet the deadline, given the fact that Citibank began in 1995 to fix the problem and is not yet compliant, and also given the fact that half of these banks have fixed only 25% of their main computers?"

"Would you say that if 100% of the banks in Japan do not meet the deadline, that this will hav repercussions on banks outside of Japan? Would you describe some of these problems?"

"What happens to the capital markets if the is a bank run in Japan, and Japan sells U.S. Treasury debt and other nations' debt to buy yen to hand out to Japanese depositors? Will interest rates rise? If so, what happens to corporate earnings and the stock market?"

"Is there some reason to believe that every other nation will not be experiencing similar bank runs? If not, what can the Federal reserve System do to save the U.S. banking system from a collapse?"

"How long can a bank be cut off from electronic communications from the banking system and still remain solvent?"

"If a bank shuts down in 2000 because of computer problems, how can the FDIC or any other organization absorb the assets and liabilities of that bank without also absorbing its bad computer code? Will the data have to be entered by hand? If so, what happens to depositors in the interim?"

"If the FDIC does not achieve complice by Jan. 1, 2000, will the Federal Reserve replace it as the insurer of all accounts up to $100,000?"

"With 100 million households in the U.S., how much currency per household will the FED have on hand in late 1999 to meet demand?"

"We have a $7 trillion economy that is systained by about $6 trillion, if we use M-3 as a measure of the money supply. What size economy would you predict if we had only one-third of the $500 billion in currency now circulating inside the U.S. (two-thirds of the $500 billion is outside the country), plus the $150 billion you have in reserve, plus the $50 billion you expect to add to reserves this year, plus the $45 billion in use today as vault cash held as legal reserves?"

If the world were to go back to an all-currency economy in 2000, would you expect the velocity of money to drop? If so, would this be deflationary?"

"How could debtors repay today's level of debt in a cash-only scenario?"

"Banks are debtors to depositors. How could they repay?"

"FED Board member Edward Kelley, Jr., has testified that the FED has 90 milllion lines of code. As late as August, 1997, the FED had barely begun code repair, forming a task force to study the problem. How is it that the FED is now 99% compliant, when no organization on earth with 90 million lines of code has reached compliance, no matter when it began the repairs?"

"The FED has over 316,000 data exchanges with computers outside the FED. How many of these have been corrected and tested?"

"If some of these outside computers are not compliant on January 1, 2000, how will the FED protect its systems from being made noncompliant by imported noncompliant data?"

"If you block data coming in from these outside noncompliant computers, what percentage of them is the maximum that you can cut off before the operations of the Federal Reserve System cease to be reliable?"

But senators asked nothing like these questions. They never do. They are terrified of looking stupid when Mr. Greenspan goes into his famous Dwight Eisenhower routine, and they can't follow up with additional questions. The only person who can understand him then is Al Haig, and no one can understand Haig.

I love to see Greenspan in action. I also loved to see Professor Irwin Corey, the World's Foremost Authority. Greenspan is missing only the tuxedo and the tennis shoes.

This is from WIRED (Feb. 25).

* * * * * * * * * *

. . . Senator John Edwards (D-NC): One last question. I was very interested in your comments about Y2K and Americans' concerns about Y2K. What advice would you give a senior citizen in the United States in December of this year about what to do with their savings account?

Greenspan: I would say the most sensible thing is to leave it where it is. That's probably the safest thing. There's almost no conceivable way in which I can envisage that computers will break down and records of people's savings accounts will disappear.

I mean, that's not what the problem is. That's easy to prevent happening, and everyone will do that. And there is, fortunately, so many different checks and balances that if it gets knocked out in one place, it's available 20 other places.

The real problem, basically, is to the issue as to whether in fact a usual means of withdrawing currency will be blocked by whether technology breaks down, whether something freezes up, whether or not the safe in the bank can't be opened or something like that.

That's a really minor concern that I'm aware of. And while I do not deny that if you have currency rather than the money temporarily locked up in your bank because the doors don't open, your money is perfectly safe. You just can't get it. It's an issue as to whether you are safer taking it out and waving it around or whether you're better to just leave it there.

-- Andy (2000EOD@prodigy.net), June 13, 1999.



Crap formatter :)

Check out this thread...

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000Wyn

"The problem of corrupt data fatally infecting the world banking system"

Easier to just read the link :)

-- Andy (2000EOD@prodigy.net), June 13, 1999.


Excellent analysis Andy. One final comment. Even if the testing of the interbank connections is successful, would these connections use the same exact lines each time or is the system somewhat like the Internet with multiple paths so that different paths with different connections, different software and a different outcome could occur if the same identical test is completed 10 times with different results? In other words one noncompliant bank that happened to be part of the chain in test number 8 could corrupt the data so that data that looked good but had wrong numbers could enter other systems and compound the errors into numerous other accounts. Is this not correct?

-- Tom (Tom@curious.gom), June 13, 1999.

In feb of 1998 the y2k project manger of the bank of boston outlined the threat to banking before the senate investigating the impact of y2k risk to the banking industry.Link at www.senate.gov/98_02hrg/021798/witness/iacino.htm

Also this threat to banking is illuminated by the san francisco Federal reserve's own internal memo about liquidity contingency planning for the century date change (Y2k) Link at www.frbsf.org/fiservices/cdc.local/cash/contingency.html If you read these two links coupled with the info that bank of boston is still not ready yet and thery are one of the best funded and a poster child for the industry we have big trouble coming down the pike.

Cash out know and avoid the end of the year rush. Most wont believe it could happen until the lights go out. Flight to quality means Gold for electronic promises to pay, and spendable now y2k complient cash in readiness for what will be a period of a couple of months of banker gridlock after Jan 1 2000. Remember computers wont feel your pain if you lose your car or house or cant eat or pay your bills. Keep at least 3 months worth of now expenses in reserve in order to function in a post y2k cash only economy.

If you travel the banks may not function for a while and people will demand cash monitary payments no credit cards accepted. Be Ready you have been alerted. Most countries don't allow transfers of large somes of cash on person when traveling thru customs into their country. If you can avoid being out of your home country do it. Stay were you know the turf would be very wise.

-- y2k aware mike (y2k aware mike @ conservation . com), June 13, 1999.


Multiple paths Tom, multiple points of failure (and I'm not even thinking about the Telcos or Power/Infrastructure situation)... In general a round-trip transaction from say a small town in Australia to a Bank of America database in San Francisco will pretty much follow the same to and fro route. However that route can change by the second virtually depending on volumes, loads, maintenance, switching issues etc. etc.

The only real test will be at rollover and you know my views on that one :)

Remember - IT IS A SYSTEM OF SYSTEMS, A CHARLOTTES WEB, ONCE IT BEGINS TO UNRAVEL THE WEB WILL IMPLODE

-- Andy (2000EOD@prodigy.net), June 13, 1999.


Or maybe it will not. But we don't know.

-- Robert A. Cook, PE (Kennesaw, GA) (cook.r@csaatl.com), June 13, 1999.

Ya know Robert I really hope I'm wrong because without banks (and yes, we have nothing better - yet) society will unravel, people will die... the system as it stands now is fragile, remember LTCM? we only just got away with that one by the skin of our teeth...

How many LTCM's are in Italy - with next to no remediation...

How many in Japan where the 19 largest banks have only spent the same as Citigroup in the USA... it doesn't make sense...

It must be 100% - worldwide - not just the USA - for a successful outcome in maintaining the status quo as it is NOW - what will the status quo be like in December of this year???

-- Andy (2000EOD@prodigy.net), June 13, 1999.


Come out come out wherever you are poole :)

-- Andy (2000EOD@prodigy.net), June 20, 1999.

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