1997-10-07 - y2k

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From: Harka <harka@nycmetro.com>
To: cypherpunks@Algebra.COM
Message Hash: 4ed9998941d54758226619c036f56c18733c84d8c2b24d300bc605281cd6e7d7
Message ID: <19971007060240.20693@DosLinux.nycmetro.com>
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UTC Datetime: 1997-10-07 09:49:01 UTC
Raw Date: Tue, 7 Oct 1997 17:49:01 +0800

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From: Harka <harka@nycmetro.com>
Date: Tue, 7 Oct 1997 17:49:01 +0800
To: cypherpunks@Algebra.COM
Subject: y2k
Message-ID: <19971007060240.20693@DosLinux.nycmetro.com>
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   Monday October 6 10:02 AM EDT 
   
Millennium Bug Threatens Financial Chaos

   By Nick Edwards
   
   SINGAPORE - The millennium bug computer crisis threatens a global
   liquidity lock-up that could send the world's financial markets
   crashing.
   
   With computers and automated systems now dominating global financial
   trade, experts fear the failure of a small proportion of systems on
   January 1, 2000, would bring chaos.
   
   Machinery installed to make markets more efficient could cause their
   collapse, shattered by computers that fail to recognize the start of
   another working day.
   
   At the end of 1999, many computers will either crash or start gushing
   out meaningless data because of programming shortcuts taken decades
   before to save computer memory.
   
   Abbreviating years to two digits did save memory, but set a time bomb
   ticking for the end of the century when clocks inside computers will
   read a meaningless '00' for the year 2000.
   
   And when the machinery controlling the money that makes the world go
   round seizes up, so too will the markets.
   
   It is our prediction that it will only take five to 10 percent of the
   world's banks payments systems to not work on that one day to create a
   global liquidity lock-up," said Robert Lau, managing consultant at PA
   Consulting in Hong Kong.
   
   I don't think the markets have quite grasped the implications of what
   will happen if the entire system goes down, " Lau told Reuters.
   
   Peeling back the layers of the millennium bug problem is a little like
   peeling back the layers of an onion and the end result is the same --
   it brings tears to the eyes, analysts say.
   
   Banks will not be able to settle accounts, investors will not be able
   to access funds, traders will not be able to make deals, consumers
   will not be able to get cash, companies will not be able to buy
   materials.
   
   Computer experts and business analysts are concerned that the scale of
   the problem is severely underestimated.
   
   Lawyers say millennium litigation in the United States will be huge.
   
   We forecast $1 trillion of litigation in the U.S.," Jeff Jinnett of
   U.S. law firm LeBoeuf Lamb Greene & MacRae told a conference in London
   earlier this year.
   
   Taskforce 2000, a body working with Britain's Department of Trade and
   Industry, thinks the cost of ridding computers of their millennium
   bugs in Britain will be about 31 billion sterling.
   
   In the U.K. it would take the commitment of the entire IT (information
   technology) industry and that is not about to happen," said Taskforce
   2000 executive director Robin Guenier.
   
   IT experts believe that if everybody in the world who has even a
   modest understanding of computer programming were to begin work
   correcting the millennium bug today, only 25 percent of the world's
   affected systems could be rectified.
   
   With international financial markets entirely intertwined, curing the
   millennium bug on Wall Street would be pointless if Asia were
   crippled.
   
   Some analysts think Asia's millennium problem is not as great as that
   of the West because computerization of routine business functions is
   not as widespread.
   
   But key financial markets like Tokyo, Singapore and Hong Kong are
   exposed.
   
   There might be less computing power in Asia, but that does not mean
   there is any less risk," Lau said.
   
   A global survey of millennium bug awareness and preparedness is under
   way at PA Consulting, which aims to publish it by the end of the year.
   Lau expects the findings to make depressing reading.
   
   One problem is that companies underestimate the problem significantly.
   Once they begin to work on it, their estimates of the cost of
   correcting it begin to escalate. Company directors do not see it
   initially as a business issue but an IT issue. Really it's the biggest
   business issue they face," Lau said.
   
   On the international foreign exchange markets for example, more than
   $1 trillion a day changes hands.
   
   Insurance is seen as one solution -- at least in terms of compensating
   firms hit by losses from the bug.
   
   But insurers face myriad millennium problems themselves and could end
   up being the biggest victims of the crisis.
   
   Not only do they have to tackle their own internal systems problems,
   their financial market transactions could be frozen by a global
   systems failure, their investments could plunge and the tangle of
   liability claims could be immense.
   
   Clients have not set aside enough money to deal with the millennium
   bug and the scale of the problem is too large for them to handle
   alone," said Singapore-based Aruno Salvi, general manager of Reliance
   National Asia Re.
   
   Sorting out who will pay for the damage by the thousands of cars
   likely to be in accidents caused by computer-controlled traffic lights
   that just blink out all over the world on January 1, 2000, is just one
   example.
   
   But there is a silver lining to the millennium cloud for some, as PA
   Consulting estimates it could see the end of three percent of the
   world's companies.
   
   On one level the millennium bug is a great opportunity. Some of your
   biggest competitors are going to go out of business," Lau said.
   
   Copyright, Reuters Ltd. All rights reserved
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