Quotably Quoted #15

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Brit firm shows US Senators 'the real turd in the Y2K punchbowl'

An analyst with London Y2K consultants International Monitoring lashed out at numerous US government agencies for soft-pedalling international Y2K threats during a Senate Y2K Committee hearing last week.

Chief among these is the Clinton Administration's special Y2K working group, whose recent, soothing report IM analyst Nick Gogerty denounced as "potentially reckless". At worst, he predicted, this sort of Pollyanna pandering could lead the administration to lose its credibility during the looming crisis, and with that its ability to lead the populace to sanity once the madness begins.

Committee Chairman Robert Bennett, a Republican from Utah, might have delighted in pointing out that the Clinton Administration has hardly any credibility left to lose, but graciously held his tongue.

The US State Department also drew fire for suppressing the awful truth about international travel at rollover time. The Department has issued a general travel advisory; but it won't name the names, Gogerty speculated, because it wishes to maintain "near-term objectives", which he declined to elaborate.

What might these be? Deterring cyber-attackers from exploiting the world's weakest transportation systems under Y2K cover? Fear that finger-pointing abroad might lead to retaliatory accusations and subsequent lean times for the American tourist industry? Reluctance to ridicule the Chinese and South Koreans, who can scarcely keep their planes in the air under the best of circumstances? (Come on, is anyone really going to fly CAAC or KAL on 1 January?)

Transportation, energy, insurance, emergency services: all these industries have far more potential to suffer from Y2K mischief than we suspect, Gogerty believes. But it is in the international banking system where he sees the greatest threat to the continued survival of the human race. Here a loss of confidence can lead to widespread panic, and panic can lead to economic catastrophe.

International Monitoring prepared a detailed report on the banking issues, but, as Gogerty said, it would not be prudent "to publicly discuss the detailed risks...in a public forum such as the one before us today." He submitted the report as prepared testimony.

The Register despaired of ever seeing it. But the Senate Committee apparently disagreed with Gogarty's estimate of its potential to scatter the herd, and promptly posted it on its Web site.

It was a difficult read, but we persisted. The report boldly asserts that "Herstatt risk could be the real turd in the Y2K punchbowl." And, no, we haven't got a clue what "Herstatt risk" means either, but we do love a good metaphor. The best we could make of it is that Herstatt is a German banker who gained fame by inadvertently rendering his bank insolvent.

We think it could be called "Leeson risk" as well. If we read it right, the greatest of all risks faced by an institutional bank are eagerly provided by the human beings it employs, all of whom, according to Gogerty's reckoning, are imbeciles. The banking system functions only because computerised accounting provides a safety infrastructure which catches errors and prevents the imbeciles from doing what God created them to do: accidentally bringing the entire world economy to grief.

It might work like this: enormous banking "clearinghouses" handle, on a daily basis, credits and liabilities in the range of tens of billions of dollars. A single human error -- say, something trivial like a misplaced decimal point -- is allowed to pass the computerised accounting infrastructure by an obscure Y2K stuff-up.

This causes some gigantic and time-sensitive payment upon which a hapless clearinghouse depends to be missed. The clearinghouse then defaults on payments it owes to others because it can't collect the income it's owed. A domino effect develops, and total world anarchy ensues.

Alternatively, the clearinghouse might make its payments in spite of being unable to collect, simply by borrowing hundreds of billions of dollars. Paying interest on that, even for a matter of days, might wipe out a month's profits. If the problem were to appear in several markets at once, the dreaded domino effect might yet be triggered, and blood flow in the streets.

"We believe Y2K will be the second costliest accident in history," Gogerty claimed. (Assuming WWI was the first, then Herstatt really is the Mother of all turds.) But, "barring nuclear or major chemical failures, loss of life should be minimal in the USA," he chirped. He had perhaps meant to reassure the Committee, but one could have heard a pin drop when he finished his speech. It was all over their faces: "what the Hell is 'minimal' supposed to mean? And worse, what might 'maximum' mean, and which poor tribe is going to represent that extreme?"

It was several minutes before Co-chair Christopher Dodd (D--Conn) summoned the courage to ask.

"There is a constant rate of loss of life due to industrial accidents in the this country every day," Gogerty explained. "The Y2K bug and, let's say, the 'non-standard behaviour' of individuals around that [time] will...lead to a spike in accident rates."

"All right, we'll leave it there," Dodd replied with a nervous smile. He didn't seem to appreciate that, from Gogerty's point of view, he'd just been given the good news.

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

There is NO doubt whatsoever that the Federal Governernment has been advised in no uncertain terms that the potential consequences are DISASTROUS. has the president gone on TV and openly, honestly ,candidly explained this terrible risk to the public, so that the PUBLIC can decide what to do about it for themselves?

No.

They have secreted it away and have gone on record to say that you might want to have half a tank of gas in your car.

Bennett and Dodd both sat there and heard these words. Ha seither of them come out with a marked warning other than the three day snowstorm crapola?

No.

"We believe Y2K will be the second costliest accident in history," Gogerty claimed."

Has the public been informed of this opinion? Or anything remotely like it?

No.

And absolute morons like deShit blather that there will be NO economic impact at all, absolutely NONE.

Gartner says that the failures are escalating rapidly, are barely under control now and will escalate even more dramtically in the next 30 days.

deShit says absolutely NO economic impact, absolutely NONE.

http://www.theregister.co.uk/991019-000022.html

-- Paul Milne "If you live within 5 miles of a 7-11, you're toast"

-- a (a@a.a), October 26, 1999

I really like the line about "blood flowing in the streets" - typical doomer-meme hogwash.

Vindicated Regards,
Andy Ray



-- Andy Ray (andyman633@hotmail.com), June 02, 2000

Answers

Anita,

Some consider those who have apologised after the fact exonerated.

I do not.

Vindicated Regards,
Andy Ray



-- Andy Ray (andyman633@hotmail.com), June 02, 2000.

-- His True Colors (Shine@Through.com), June 02, 2000.

I really like the line about "blood flowing in the streets" - typical doomer-meme hogwash.

Vindicated Regards, Andy Ray

Andy,

The "blood in the street" remark is a warning from a British firm to a US Senator (Senator Bennett) that is quoted by a doomer and is then re-quoted by another doomer. All this proves is that concern was well distributed, at very high levels, and that "doomers" were repeating this warning.

So what is your point, or is there one?

-- very puzzled by andy ray (notmy addy@anon.com), June 02, 2000.


Hey dufus:

exanerated is spelled exonerated.

apologised is spelled apologized.

Children should learn to spell the big words or not use them.

-- LOL at this horse'sass (@ .), June 02, 2000.


Nick Gogerty's report is still on the Senate Y2k committee's Web site.

(for historical and research purposes only)

Hearing on International Preparedness: What in the World Will Happen?

http://www.senate.gov/~y2k/hearings/991013/

-- (October@of.1998), June 02, 2000.


Pardon me. The report on Herstatt risk is from October of 1999.

-- (October@of.1999), June 02, 2000.


-- LOL at this horse'sass (@ .), June 02, 2000.

FYI, not a complete list or explanation, but if you can compose yourself a spell, read this page.

-- Doc Paulie (fannybubbles@usa.net), June 02, 2000.


Doc Paulie:

Great link. Mark Twain was right in saying the US and Britain are two countries separated by a common language. I wish they'd learn to spell.

-- Flint (flintc@mindspring.com), June 02, 2000.


It's interesting that many in the Southern secessionist movement (see The League Of The South web site, for example) use the British spellings exclusively, because they seek to be identified with Great Britain rather than the "Union." :)

-- Stephen M. Poole, CET (smpoole7@bellsouth.net), June 03, 2000.

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