http://www.forbes.com/tool/html/00/Jan/0103/mu2.htm

January 03, 2000

One Week View

Yardeni changes his tune

By Marius Meland

NEW YORK. 11:15 AM EST-Deutsche Bank Chief Economist Ed Yardeni, perhaps the best-known year-2000 Cassandra, is changing his tune after the turn of the millennium produced no significant computer disruptions.

"I have to say I was very surprised about how smoothly the transition went," Yardeni said. "I'll wait another couple of days, but if the next two days are uneventful I'll simply say I was wrong and join the consensus view with regards to the outlook for the economy. As it appears now, there will be no global recession as a result of Y2K."

Two years ago, Yardeni predicted Y2K would trigger an economic downturn as severe as the 1974-75 recession in the aftermath of the first oil shock. Only two days ago, he told The New York Times he revised his earlier gloomy forecasts but added that he still expected a brief, shallow dip in the first half of the year.

But now Yardeni says there might not be any noteworthy effects of Y2K on the economy after all. Does that mean he was wrong all along?

"I don't regret having done my part to sound the alarm bell. I'm happy to note the bell was heard. The world's information technology community has done a tremendous work in preparing for this event," Yardeni said.

He said his greatest worry was that Y2K problems overseas would disrupt the supply chain and eventually hit U.S. shores. Although he said it's too early to make a conclusive assessment about the extent of Y2K problems abroad, he acknowledged that the colossal disruptions many people had expected in Asia, Russia and Latin America probably won't happen.

Now, Yardeni said, the most immediate challenge for the U.S. market isn't Y2K, but rate hikes by the Federal Reserve. He expects two interest rate increases this year, starting with the Fed's next policy meeting Feb. 1-2.

"It's important to bear in mind that at this time last year, it was only the U.S. economy that was booming. Now we're seeing a recovery in many other parts of the world as well," Yardeni said.

What a difference a millennium makes.

-- the Virginian (1@1.com), January 03, 2000

Answers

Turn out the lights, the party's over.

-- It was fun (while it@lasted.com), January 03, 2000.

Virginian--Suggest you read Dale Way's post rollover assessment below. The fans are streaming onto the field because the home team intercepted a pass in the first quarter. It's always been about mainframes dude. I'm as happy as anyone on the planet that infrastructure held but I always suspected it would. Let's just hope that we can manage the problems that arise in legacy systems.

-- Blew5M (gaf@mindspring.com), January 03, 2000.

Be nice to the Virginian he lives about a block down the road.

The Virginian chooses to believe this article. He even chooses to be flip about that belief. Don't trouble yourselves. He is not a scientist. He seems to fail to realize that the man at IEEE says it is not over. That Kosky says it is not over. That Yourdon and others say it is not over. You read the report you quote yourself. Then read it again. Then again. About that time you will begin to get an slight understanding of how much thought and time went into that report which has been essentially correct SO FAR. The more correct that report appears to be, the more concerned I get. NEVER THE LESS IT IS TOO EARLY TO BE SURE OF MUCH AT ALL.

I remain.

-- Michael Erskine (Osiris@urbanna.net), January 03, 2000.