http://www.moneynews.com/

Yardeni Warns Y2K Will Bust Dow

Yardeni Warns Y2K Problems Still Ahead

NewsMax.com December 27, 1999

New York--The Y2K rollover date - January 1, 2000 - is just days ahead, and one major economist remains steadfastly pessimistic.

Edward Yardeni, chief economist for Deutsche Bank Alex. Brown, appeared on CNBC's "Squawk Box" last week to say that the "alarms" were not heeded for Y2K and there is no use sounding them now.

He believes, as he has argued for the past year, that Y2K will cause "major" problems world-wide, and will be more than a "bump in the road" - as many Y2K pundits have suggested.

Yardeni says that Y2K will adversely effect the economy during the first six months of 2000 and it is sure to be a Dow-buster.

In an interview with Entrepreneur magazine, published this month, Yardeni explained why his is a Y2K skeptic:

*The federal government has stated most of their mission critical systems have been tested and compliant. But Yardeni complains there is no standard as to "what 'mission critical' means." He says the feds have yet to do testing on 40 major programs, and he can't believe, for instance the FAA can be compliant in time.

*He chafes at the idea that Y2K problems will just be "local." Yardeni responds to such brush offs: "My response is that that's where we live!" Too many local problems add up to a "national hurricane," he said.

*Yardeni has done some research and he doesn't like what he finds. "My surveys among IT professional have found something disturbing. Software patches from third party vendors for so-called mission-critical programs hadn't been provided in 20 percent of cases as of September."

*Internationally Y2K could spell disaster. "I'm concerned about the state of oil companies in Mexico and Venezuela, since they got a very late start. Kuwait didn't seem to know it even had a problem until last year. The Japanese got a very late start but claim they'll be ready. I'm skeptical. The rest of Asia doesn't look like it's in good shape. China is at the top of everyone's list of countries likely to have Y2K failures "

Short-term Yardeni is a bear. He advises investors to "overweight government bonds, underweight stocks, and accumulate cash in the portfolio." After the Y2K problems pass in 6 months Yardeni believes such investors will be in a better position to get back into the bull market. On CNBC, Yardeni cautioned that Y2K problems may not be apparent in the waking hours of the New Year, but may surface in the days and weeks after as supply, shipping and communications problems related to Y2K surface.

-- Uncle Bob (UNCLB0B@AOL.COM), December 27, 1999

Answers

I cant tell you how much I have grown to hate being y2k-aware.

Just saw "Kosky" on the news saying the US is almost 100% compliant and then I read this Yardeni thing. Seems almost hourly I see something which screams "DANGER" and then right after someone else says their industry/country/organization is fully compliant or ready.

-- hamster (hamster@mycage.com), December 27, 1999.

The guy's got balls. Gotta admire him for that; he's out there all alone in the financial world. Go Ed!

-- (cavscout@fix.net), December 27, 1999.

Direct link to the article:

http://www.newsmax.com/moneynews/archives/articles/?a=1999/12/26/15374 5

-- Linkmeister (link@librarian.edu), December 27, 1999.

I'm mildly surprised no one's reaming the guy for being in gov't bonds.

-- Ken Decker (kcdecker@worldnet.att.net), December 27, 1999.

LOL Ken.

Is this the first public appearance by Yardeni since the Dec. 1 problems at Deutsche? Seems as if he is actually much more pessimistic or maybe more vocal about there being no chance for a BITR now than before.

Mike

===================================================================

-- Michael Taylor (mtdesign3@aol.com), December 27, 1999.

Why, Ken? Wouldn't bonds be the classic "safe haven" for money if things get unstable? Gov't-backed indebtedness would likely be a favorite "home" for international funds looking for stability.

-- Mac (sneak@lurk.com), December 27, 1999.

Hamster,

This statement "Just saw Kosky on the news saying the US is almost 100% compliant" reminds me of the revelation by the media about how US and UN intell ACCIDENTALLY over estimated the number (by 66%) of Kosovoan casualties prior to going in to address the Serbs. It was speculated by several in the media that this may have been done INTENTIONALLY to win public support for the retaliation against the Serbs ? Hmm. Surely not.

Kinda makes you wonder if that is our compliancy figures might be padded "just a little". Also makes you wonder why they have used the term "ready" so much more than compliant.

-- Rob (maxovrdrv51@hotmail.com), December 27, 1999.

Just remember folks, Kosky didn't have sex with that woman either. His main job is to stem the panic tide, come 01-01-2000 or by mid Feb at the latest ole Kosky will disappear from the scene replaced by a new enlightened savior of Clintons choice. The problem is simple, the fix improbable. Do you realize how many other "oil scenarios" there are out there. Restocking this coming fall (2000) may be difficult.

-- Polly-Morphic Doomer (greenem31@aol.com), December 27, 1999.

>>I'm mildly surprised no one's reaming the guy for being in gov't bonds. <<

>> Why, Ken? Wouldn't bonds be the classic "safe haven" for money if things get unstable? <<

Ken is playing his cards a bit close to the vest.

In actuality, Ken's position (and advice) is almost identical to Ed Yardeni's. Ken's point is that, while Yardeni can be quoted making these statements and be applauded, Ken could post the exact same statments under his own name and a passel of yipping doomsters would come flying at him and try to sink their teeth into his ankles. It is an amusing contrast to those who appreciate mild irony.

-- Brian McLaughlin (brianm@ims.com), December 27, 1999.

It's good to know that with all the dire predictions made by Mr. Yardeni that problems caused by Y2K will be over with in 6 months.

-- ~***~ (~***~@earth.ebe), December 27, 1999.

"In actuality, Ken's position (and advice) is almost identical to Ed Yardeni's."

That is a load.

You could start a discussion in favor of any one of the reasons that Yardeni stated above and Decker would debate you until he is blue in the face. If his position is identical, then he is a traitor to his own beliefs and is just arguing for the sake of argument. The reason he has yipping doomers flying at him is because he gets off on it, and will disagree with them no matter what he actually believes.

-- Hawk (flyin@high.again), December 27, 1999.

I'm mildly surprised no one's reaming the guy for being in gov't bonds.

-- Ken Decker (kcdecker@worldnet.att.net), December 27, 1999.

The question is, how big is his Zurich account...

-- (@ .), December 27, 1999.

Mr. Hawk,

You seem to have a very decided opinion about Mr. Decker. OK. Been there. Done that. Ken's not a very exciting subject, really, in spite of the fact that so many folks are eager to discuss his personality in great detail.

What I want to know is your opinion about the advisability of weighting one's portfolio away from stocks and toward US Treasury bonds, as Yardeni suggests?

Is that a heckuva great idea or what?

-- Brian McLaughlin (brianm@ims.com), December 27, 1999.

Brian,

I don't think it is wise to be invested in anything that is controlled by government and NWO businesses. To those who believe they are getting rich over the short term (despite the tremendous costs to society), it may be difficult to perceive the problems, but from where I stand the long-term objective is clear. With the exception of an elite minority, most people are not going to like it when we get there, but by then it will be too late to go back.

-- Hawk (flyin@high.again), December 27, 1999.

Seems to me anyoe with fairly large holdings in equities and/or mutual funds have few real choices.

Do nothing. Your holdings remain at the mercy of the market, and subject to the solvency of your broker and/or the funds involved.

Sell out and a) hold the cash or b) buy gold and take possession. Neither seems particularly practical, and both pose a serious security risk.

Convert some or all of your holdings to government-backed bonds. If you can't avoid holding someone else's liability, this seems the least risky option. Certainly for those in a 401-k plan, for whom cashing out is a very expensive choice.

Those with market savvy may have more informed choices -- I'm not among them.

-- Tom Carey (tomcarey@mindspring.com), December 27, 1999.

"toward US Treasury bonds, as Yardeni suggests?

Is that a heckuva great idea or what?

-- Brian McLaughlin (brianm@ims.com), December 27, 1999."

bad bad idea...

the US Dollar is debased due to the massive infusion of liqiudity recently and our trillions of debt backed by no gold and nothing but hot air...

a bond is a piece of toilet paper in a rampant inflationary scenario we are just going to be made aware of in the 1st qtr...

get gold

get "stuff"

be liquid - have cash

NOT BONDS!!!

-- Andy (2000EOD@prodigy.net), December 27, 1999.

NOT BONDS! NEVER! BUT GOLD.

If what I think is about to happens does happen. The Federal Reserve dollar (which the US uses as its currency will become worthless). Gold will hold its value through and through. It may not go up. It certainly can't go down (unless y2k is a complete yawn - and if you belived that you wouldn't be reading this forum).

Here's my view on what is about to happen. This is speculation based on connecting dots, but it fits quite very well:

OT?IF Y2k is such a threat why is gold/silver so cheap

-- Interested Spectator (is@the_ring.side), December 28, 1999.

You're right Andy, the only thing worth having in this "soon to go to completely digital currency" world is real physical property, the "stuff" that dreams are made of. Land, goods, things people need to survive, and of course, if you have enough of all that stuff, gold!

The NWO is well on their way to putting 99% of the World's population in debt to them, and when they decide to pop that bubble, they've gotchya! For those who do not want to become a microchip implanted robot slave for the NWO, you'd better be ready to deal in Bartertown!

-- Hawk (flyin@high.again), December 28, 1999.