Dec. 29 Yahoo! Y2K Chat Transcript

Cory Johnson and Stephanie Moore answer all your questions
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TSCEllen

: Welcome to today's Y2K chat! Cory Johnson and Stephanie Moore are here to answer all your millennial questions.

coryjohn

: Sorry Broncos fans, but this is not a chat about Terrell Davis' 2,000 yards rushing, this is about the other Y2K.

S_Moore_Giga

: Hi everyone....greetings from Paris. And happy holidays!

coryjohn

: Stephanie is one of the world's top year 2000 analysts, working on Y2K issues globally from her posh in Paris.

coryjohn

: It is posh, no?

S_Moore_Giga

: No!

S_Moore_Giga

: But it is in Paris.

TSCEllen

: On to the questions....

coryjohn

: Questions?

dondon15

asks:

Doesn't the Y2K crisis really only effect the "older" computers? Those made in maybe 1993 and before?

S_Moore_Giga

: All computers, particularly new computers can be affected by the Y2K problem.

S_Moore_Giga

: Even personal computers purchased as recently as this year may not be Y2K compliant.

S_Moore_Giga

: And, fixing the Y2K problem in newer systems is often more difficult for an IT organization to undertake.

coryjohn

: Every story I've written about this -- every person I've interviewed -- has been shocked at how widespread the problem is.

KIRK2010

asks:

can you explain what will happen to those systems that are not protected against the Y2K bug when 2000 rolls around?

S_Moore_Giga

: It depends on the system.

S_Moore_Giga

: In some cases, systems will make faulty calculations, potentially causing financial losses or incorrect business cycles or incorrect balances on credit cards.

S_Moore_Giga

: Or, some systems will stop working -- the hardware will stop working.

S_Moore_Giga

: In the worst case, systems may appear as if they're working, but aren't really working properly.

S_Moore_Giga

: So you don't realize an ATM is giving money erroneously, but it is. Most dangerous are those errors that aren't readily apparent.

coryjohn

: It's becoming apparent that embedded systems are a huge problem here too.

coryjohn

: Street lights, elevators, security systems and medical equipment are all turning up with problems.

coryjohn

: Thus far, however, Furbies appear to be safe.

Binx___

asks:

Now that the Soc Sec has officially finished, what is the outlook for larger agencies, such as IRS, that began their work years after SSA began?

coryjohn

: Stephanie, do you really think Social Security is finished?

coryjohn

: Not call our President a liar.

S_Moore_Giga

: No. SSI may have converted and renovated a significant percentage of its systems, but they haven't converted and tested every system, every interface, every external connection.

S_Moore_Giga

: and, like all other organization, the SSA is still vulnerable to third party forces like suppliers, vendors, the electric company, the telecom industry.

S_Moore_Giga

: It's misleading for us to feel sure that the statement that the SSA is finished. It has very little meaning.

S_Moore_Giga

: In fact, it should scare us that someone is irresponsible enough to say that.

coryjohn

: Fine, but I find it hard to believe that our Federal Government would make a mistake in something important like this.

Bearclaw6

asks:

What kind of failure rates are you seeing?

coryjohn

: This will be an interesting one to monitor.

S_Moore_Giga

: We haven't seen widespread system failures yet that are attributed to Y2K.

S_Moore_Giga

: There are sporadic failures, and companies are fixing systems as they break.

S_Moore_Giga

: What we have seen is companies that have started to test their systems are finding the task to be monstrous.

S_Moore_Giga

: They've significantly underestimated the time, money and resources necessary because the code is so riddled with errors.

coryjohn

: We'll be watching for these things, and reporting on them all year long on TheStreet.com.

coryjohn

: We've just hired a full time Y2K reporter.

filippomiller

asks:

What is the estimated global cost of the Y2K problem?

coryjohn

: I know that Y2K analysts hate question, so I'll answer it.

coryjohn

: No one knows. And it depends on what you're counting. And how you're counting.

coryjohn

: My good Kevin Shick came up with an oft quoted number for Gartner $300 to $600 billion a few years ago.

coryjohn

: He made that number up.

coryjohn

: But it's clear that the affets will be widespread and profound.

coryjohn

: And it looks like the legal costs, according to Steven Hock a laywer with Triaxis research, will be even higher than Shick's number.

TSCEllen

: Could you describe what the Y2K problem is for some of our chatters?

coryjohn

: The Y2K problem refers to some computers inabailty to approriatly interpret dates after the year 1999.

coryjohn

: Hence year 2000 or Y2K.

coryjohn

: Get it?

dac_30

asks:

what about the national power grid? will we have power outages?

S_Moore_Giga

: With the recent deregulation of the electrical utility industry, it's difficult to determine where the outages will be.

S_Moore_Giga

: However, many of the electrical utilities haven't even finished their own internal info technology systems, and in some cases, haven't even started to look at the embedded systems problem.

S_Moore_Giga

: So the likelihood of failure in the power grid in the US is pretty high. It doesn't mean we'll have blackouts, but we'll probably have some brownouts, service interruptions, sporadic blackouts, etc.

coryjohn

: Yeah, some officials at power companies I've interviewed say that they're afraid of "brown outs" rather than full power outages.

S_Moore_Giga

: The power grid won't shut down, but because New Yorkers may be buying power from California, if the grid goes out in California, I may lose power.

coryjohn

: I also interviewed a hospital administrator last week who told me her hospital is buying new emergency generators specifically for Y2K.

luckylady_68048

asks:

i would like to know what to do about our investments

S_Moore_Giga

: Be conservative and keep a paper trail of every investment -- pensions, mutual funds, any type of account.

S_Moore_Giga

: Play it safe.

coryjohn

: I was on a panel with two Y2K savvy investment advisors a few months ago

coryjohn

: They advised

coryjohn

: a heavy weighting towards US Treasuries, with the notion that the global Y2K problem would send worldwide investments to the safest harbor -- the US

coryjohn

: I just changed my portfolio around for that reason.

coryjohn

: So 13 months from now remind me of this so you can tell me if I was an idiot or not.

cfpcfp

asks:

Why didn't the "brains" out there in technology foresee and plan for this crisis??? We've been talking the year 2000 forever!!?

coryjohn

: Wish that were true.

S_Moore_Giga

: Programmers started to use two digit dates years ago to save the cost of storage space which was, at the time, very expensive.

S_Moore_Giga

: That was the standard. people really, in terms of IT budgets, don't look that far into the future.

S_Moore_Giga

: People were peripherally aware of the problem, but it never seemed important enough to proactively tackle.

catcher_1918

asks:

What can companies who have made a lot of money on Y2K do, to maintain current growth and in effect there street value? I know that it is a had transition, but a lot of companies think that it is possible.

S_Moore_Giga

: A lot of the Y2K specific companies are looking to find business post 2000 in such tech areas as web-enabling legacy systems -- older computer systems -- and making them accessible to users everywhere.

S_Moore_Giga

: Other companies that are more service oriented are looking to retain relationships with their customers and get pull through business.

S_Moore_Giga

: It will be extremely difficult for many Y2K specific companies to maintain the levels of business they had prior to the turn of the century.

coryjohn

: Just like Internet stocks now, pundits two years ago were saying that the blow up in Y2K stocks didn't reflect their true anticipated revenues.

coryjohn

: Looks like they were right.

coryjohn

: Nonetheless, these guys have gotten foots in the door (feet, I know, feet) and have the opportunity to make software and service sales they didn't have a shot at two years ago.

S_Moore_Giga

: I agree with Cory. Companies like Computer Horizons and Keane have all capitalized on the Y2K opportunity.

S_Moore_Giga

: They'll be able to probably maintain or increase their growth over the next several years.

kitty1117

asks:

Y2k is the problem of software or hardware?

coryjohn

: Both.

coryjohn

: Software, data and even software "hardcoded" or embedded into chips -- they're all affected by Y2K.

coryjohn

: Or not.

S_Moore_Giga

: Depending upon how they were built or programmed.

tabseter

asks:

Where is the US exactly in relation to other nations?

coryjohn

: Way ahead.

coryjohn

: Stephanie?

S_Moore_Giga

: The US is far ahead any of the countries I've been working in. They're probably the most advanced of any country in terms of their Y2K awareness and preparedness.

coryjohn

: But?

S_Moore_Giga

: But...that is not good enough.

S_Moore_Giga

: The US is still wwwwwwwwwway behind where they need to be in order to make the millennium transition.

S_Moore_Giga

: And....particularly small and medium sized businesses are at high risk right now.

S_Moore_Giga

: They have not been educated enough and haven't taken any steps to combat the Y2K bug.

coryjohn

: We did two stories on TheStreet.com last week about particular Global Y2K problems

coryjohn

: One about semi conductors:

www.thestreet.com/premium/Companies/siliconvalley/34068_1224 1998.html

coryjohn

: Another more GLOOBAL overview:

www.thestreet.com/premium/Companies/topstories/33995_1221199 8.html

coryjohn

: The subhed on that: Worldwide preparedness ratings range from "Sort of OK" to downright "Scary."

coryjohn

: Get it?

Binx___

asks:

What ever happened with the "list of non-compliant banks" that the FDIC threatened to publish? Did it ever go out? If so, was there any fallout for the named banks?

coryjohn

: The FDIC issued cease and desist orders to three Georgia banks last year.

coryjohn

: But they are supposedly now compliant with Y2K.

coryjohn

: Believe it when I see it.

Jerryw1218

asks:

Is any industry more likely to be affected by Y2K than another?

coryjohn

: Good question, Stephanie?

S_Moore_Giga

: The scariest industry sector is health care.

S_Moore_Giga

: Not enough has been done in that sector -- hospitals have generally low IT budgets and don't have top of the line technology. They don't have the resources to fix this problem.

S_Moore_Giga

: Hospitals not only have their IT systems to fix, they also have all of the embedded systems located in their medical equipment which must be tested, repaired, and/or replaced.

S_Moore_Giga

: That makes it a very, very expensive project for most health care organizations.

S_Moore_Giga

: The fact that the industry is so far behind is a life critical threat to all of us, forgetting the mission critical problems of bank failure, etc.

S_Moore_Giga

: We all need to take a look at our local health care providers to make sure they're ok.

coryjohn

: Yikes.

putty_sydney

asks:

Will computer chips in fuel injection systems in cars, planes, trains and the like be affected?

S_Moore_Giga

: Cory?

coryjohn

: Sure, stick me with the good questions. Just because I guy doesn't mean I'm a car buff.

coryjohn

: I know that some of the formerly-hot Y2K stocks have all announced big programs with the big three auto makers.

coryjohn

: But I don't know if that goes down if that goes down to the embedded system level.

coryjohn

: Stephanie what about airplanes?

S_Moore_Giga

: People should be afraid to fly - not because of fuel injection systems, but because of the plethora of embedded systems and electronics and because of the navigation systems which are responsible for keeping the planes in order in the sky!

S_Moore_Giga

: That's what they should be scared of!

coryjohn

: Let alone the cars in the Hertz lot.

coryjohn

: What the FAA?

S_Moore_Giga

: What we've seen from the FAA is that they're not prepared for the Y2k problem.

S_Moore_Giga

: The feds are aware of this and has published report cards on the FAA's poor Y2K performance and the fact that the FAA can't seem to get their systems fixed.

S_Moore_Giga

: That doesn't bode well for the most well-Y2K prepared nation in the world.

S_Moore_Giga

: In other words, if US aerospace isn't Y2K compliant, how compliant will Russian airspace be?

CQ11111111

asks:

I heard that Windows 98 wasn't Y2K compliant...is this true?

S_Moore_Giga

: Yes!

S_Moore_Giga

: Windows 98 isn't y2K compliant. Microsoft has published info on their web site with specific technical issues.

S_Moore_Giga

: They'll provide a patch as it becomes available.

coryjohn

: But don't look for that info in adds for Windows 2000.

coryjohn

: Here's the website from MSFT

www.microsoft.com/technet/topics/year2k/default.htm

coryjohn

: Don't miss the smiling picture of Chairman Bill.

coryjohn

: It should have the caption "What, Me Worry?"

CyberGram22

asks:

how is the bug going to effect online trading for stocks

coryjohn

: You know, I hate to give these answers, but we just don't really know.

coryjohn

: It seems, however, that the financial systems of the US are perhaps the best prepared of all systems for Y2K.

coryjohn

: Steph?

S_Moore_Giga

: The Securities Industry Association has executed what it calls streetiwide testing to make sure their companies can still trade electronically.

S_Moore_Giga

: Not all brokerages or financial services companies participated or will participate in this testing, but it's an excellent effort.

S_Moore_Giga

: It should provide some security to investors.

magz_12

asks:

Is there any way we can test to see if our computers are compliant

S_Moore_Giga

: There are lots of ways to test.

coryjohn

: Snap!

S_Moore_Giga

: Individual users, however, shouldn't set their computer clocks forward to see if they'll accept a post 2000 date.

S_Moore_Giga

: If they do that, they may well expire passwords or delete or archive data in scheduling software.

coryjohn

: And don't try to test the airbags in your car either.

S_Moore_Giga

: this happens because the applications are fooled into thinking it's a post 2000 date.

S_Moore_Giga

: There are tools and utilities you can download for free or very low cost from a number of sources.

coryjohn

: Here's one:

www.nstl.com/html/nstl_y2k.html

coryjohn

: This if from the National Software Testing Labratory.

bobtiger65

asks:

is wall street ready for y2k?

coryjohn

: I think so.

S_Moore_Giga

: I doubt it!

coryjohn

: There you have it.

coryjohn

: What do you mean?

S_Moore_Giga

: I think there are too many firms on Wall sTreet and too many interfaces, interdependent systems, hidden systems.

S_Moore_Giga

: There is no way Wall Street will be safely ready for Y2K.

S_Moore_Giga

: It just may mean glitches or trading interruptions, but it's laughable to think Wall Street is ready.

coryjohn

: So is anybody ready? Is Stephanie Moore of Giga Information Group ready?

S_Moore_Giga

: Yes!

S_Moore_Giga

: My money is buried in the backyard!

coryjohn

: Where do you live again?

S_Moore_Giga

: Ha ha!

coryjohn

: Seriously.

S_Moore_Giga

: The fact is that despite best efforts by IT organizations, there are too many external vulnerabilities that companies have absolutely no control over.

S_Moore_Giga

: Even if they're all ready, and every single internal system, light switch, and security card is fixed, they have no control over their water supplier, critical goods and services suppliers.

S_Moore_Giga

: So they're, by definition, vulnerable to Y2K failure.

coryjohn

: Y2K professionals have been talking about "contingency plans" for over a year now. It goes well beyond triage.

Morgan_AI

asks:

Is it true that the date 9-9-99 is going to affect computers? And if so why?

S_Moore_Giga

: Well, 9/9/99 is a date some programmers used when they were required to fill in a theoretical expiration date.

S_Moore_Giga

: some software development tools, in fact, use 9/9/99 as a default null value field.

S_Moore_Giga

: Now, as scary as this sounds, finding all the 9/9/99s in the code isn't all that hard.

S_Moore_Giga

: companies need to understand the problem, search for it -- and do it fairly quickly.

NJTeen154

asks:

How will this 2000 problem effect the average home computer user?

coryjohn

: Plenty.

coryjohn

: But not all the places that you think.

coryjohn

: The latest versions of programs like Quicken, that are obvisouly date sensitive, are compliant.

coryjohn

: But whose mother isn't using 10 year old pirated copies of Quicken.

coryjohn

: Corporatations update and maintain and fix their software.

coryjohn

: My Mom doesn't.

S_Moore_Giga

: For example, even some of the most popular antivirus software needs to be updated to the latest version.

coryjohn

: All most all software is date reliant, even if you don't use it to keep dates.

coryjohn

: Or get dates.

coryjohn

: For those of you scoring at home, or those of you alone.

Scoobi_FreeBSD

asks:

I'm worried that, as 1/1/2000 approaches, people will start pulling their $$$ out of the bank, thus collapsing the economic system. Comments?

coryjohn

: The Federal Reserve has actualy just added tons o' cash to the reserves of the US.

coryjohn

: $50 Billion, I think.

coryjohn

: So clearly, the Fed is worried about this problem.

coryjohn

: And trying to take care of it.

coryjohn

: That Alan Greenspan is something, huh?

John_Jones2

asks:

Don't most computer's have a manul overide though so that you could shut them down before they do any harm?

coryjohn

: No.

coryjohn

: You wish.

Binx___

asks:

Why do you think that (public )companies are still hesitant to send out detailed Y2K information even when that same info is required in their quarterly SEC filings? Nervous about public image? Assuming that public won't check 10Qs?

coryjohn

: Good question.

coryjohn

: The interesting thing about the SEC requirements is that they are VERY vague.

coryjohn

: I'm told, that there were contentious discussions about the wording of that rule.

coryjohn

: within the SEC>

coryjohn

: The SEC did not want to be responsible in any way, for enforceing or checking the veracity of company claims.

S_Moore_Giga

: The SEC sees itself as a reactive, not proactive body. They react to problems once they've happen, then act against companies that have violated the securities laws.

S_Moore_Giga

: They don't provide proactive advice.

coryjohn

: They're lame.

luckylady_68048

asks:

what should we do to get ready if anthing

S_Moore_Giga

: I always say keep a paper trail -- pension, savings account 401K.

S_Moore_Giga

: There are bound to be glitches, whether it's in your MasterCard statement or 401k balance.

coryjohn

: And keep reading TheStreet.com -- not just to send my kids to college -- but because we'll be covering this issue extensively throughout the coming year.

coryjohn

: I dare say we'll be more on top of Y2K than any financial publication anywhere.

coryjohn

: The gauntlet is thrown.

coryjohn

: Last question?

arsenal_dubble

asks:

I think that the Y2K is starting to get rediculas, What are your views on this?

S_Moore_Giga

: It's about time the world wakes up to the y2K reality.

coryjohn

: Check with me in 13 months tough guy.

coryjohn

: Thank for all these great questions, sorry we couldn't get to them all.

coryjohn

: Stephanie, thanks for joining us from sunny Paris.

coryjohn

: Oh yeah, it's dark there.

S_Moore_Giga

: My pleasure, and it's not sunny!

coryjohn

: Anyone who wants to read our Y2K series on TSC, it's at this URL

www.thestreet.com/premium/Commentary/siliconbabylon/34061_12 211998.html

coryjohn

: Thanks again!

TSCEllen

: Thanks Cory and Stephanie! If you'd like more info about TSC chats, send email to chats@thestreet.com.