Y2K: Not Much Ado About Nothing

By Yi-Hsin Chang (TMF Puck)

(Dec. 20, 1999) --One of the best things about writing for the Fool is that we writers pretty much have free rein -- we can write about whatever companies and investment issues that interest us. That's why I must admit that this is one article I'm not psyched to write because as far as I'm concerned, Y2K is a non-issue.

The year 2000 could be a problem for older computers and software because many use two-digit date codes and can't distinguish between 2000 and 1900. This could potentially lead to computer failures. For more information on the problem, check out my five-part series on the topic written a year and three months ago. I was convinced then, and am even more so now, that Y2K will be at worst a bump in the road, not some major catastrophe.

We have only a few weeks until January 1, 2000, and I'm delighted to say that there's no widespread panic or hysteria, no mass hoarding of cash or food, and no ominous reports on TV of impending doom. U.S. markets have soared, contrary to earlier forecasts that investors would cash out in late 1999 for fear that all would be lost come the New Year. You know Y2K is no big deal when the made-for-TV movie bombs.

In other words, sanity and rational thinking have prevailed, and life is continuing pretty much as normal. The biggest question is not, "What are you doing to prepare for Y2K?" but "What are you doing for New Year's?"

Even the Fool's Year 2000 Problem message board, which was once abuzz with activity, has only a dozen or so messages so far this month and about 30 for all of November. That compares with roughly 320 message board posts in September 1998. I read the lack of interest not as apathy or ignorance, but as yet another sign that the Y2K problem was overplayed.

People are not panicking because companies have made many reassurances regarding Y2K and have committed a lot of time and resources to prepare for the problem. Take Citibank's Y2K Web page. As I've said before, it's not as if technology officers and company executives weren't aware of the problem. Au contraire. There are companies that have been working on Y2K since 1997 or earlier.

As Citibank tells us: "We are creating Y2K Command Centers to manage the transition period when 1999 turns into 2000. Our businesses from New York to Singapore, Brazil to Brussels, Paris to Sydney have developed Y2K related business plans to manage this time period. We also are working closely with many external organizations including third party service providers, industry associations such as the Global 2000 Coordinating Group and regulatory bodies. In fact, we already have participated in many successful coordinated industry-wide tests with other financial entities as part of our ongoing preparations for Y2K."

Rest assured that as far as money is concerned, we're covered. Your 401(k) isn't about to implode or explode come January 1. You'll be able to withdraw cash from ATM machines. The stock markets will open as usual on January 3, the first Monday of 2000. If you're like me, your bank and credit card statements have all declared the financial institutions ready for Y2K.

According to the latest bulletin from the President's Council on Year 2000 Conversion, as of December 1, all systems were ready at the Federal Aviation Administration (they had been since June 30). Similarly, according to the North American Electric Reliability Council (NERC), nearly all large electric companies are Y2K ready, though the power industry has prepared contingency plans just in case.

Ironically, our biggest headache may be computer viruses designed to wreak havoc on January 1. One virus Symantec calls "W32.Mypics.Worm" has a "destructive payload that triggers in the year 2000." In fact, it's designed to mimic the Y2K problem and will display the message "CMOS Checksum Invalid" and prevent the computer from booting when the system clock changes over to 2000. According to Symantec, "This can easily be corrected by going into the BIOS setup." (Don't ask me what that means, but it shouldn't be too hard, right?)

I for one plan to welcome in the New Year no holds barred.

By the way, for those of you with ancient VCRs that don't have dates beyond 1999, I've got a tip for you. My husband thought of a way to circumvent this mini-Y2K problem without having to buy a new VCR. Set the year on your VCR clock back to 1972. The dates and days of the week match those of the Year 2000 to a tee.

Happy New Year, everyone! Party like it's 1999.

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