"Prosperity: The Coming 20-Year Boom and What It Means to You" is a new "engrossing, well-reported" book by WSJ economics correspondents Bob Davis and David Wessel. The authors predict a computer-related productivity spurt, plus benefits from globalization and from increasing levels of education. $27.50 from Time Books. [Deborah Stead, NY Times. SJM, 29Dec98, 12C.] (My broker's research department is also predicting continuing growth in the stock market due to more and more people pumping their savings into mutual funds and stocks. Discount online trading is helping to get people involved -- often without the guidance they really need.)

Although Y2K costs are real -- probably beyond $1T -- much of the newly purchased hardware will be of immediate and continuing benefit (as opposed to repeatedly patching old systems). This is similar to the boost that Germany and Japan got from post-war rebuilding. [Charles J. Bodenstab, BW, 11Jan99, p. 10.] (On the other hand, the buying boom may be followed by several years of depressed sales -- and for each company that goes bankrupt, client companies have to deal with obsolete equipment and lack of service.)

The Bearslist is an unmoderated discussion of the probability of a major stock market decline over the next year or so, due to the spreading global recession, possible deflation, stock market overvaluation, excessive credit, and the Y2K problem. Send a blank message to or sign up at . Archives are at . Danny Cox or , NEW-LIST, 04Jan99.]

Y2K liability expert and former skeptic David Sterling found himself and about 40 other employees locked out of their building on 01Jan99, due to a chip and software error in their DSX security system control panel. Such chips run everything from medical equipment to nuclear reactors. "God forbid there is a chip like this in an airplane in a very important role. On December 31 I'm going to be roasting chestnuts over an open fire with my family and friends around me at home." [UPI, 05Jan99. Bill Park.]

The average American home now contains about 63 processors, increasing to 280 in five years. New cars contain 15-60 processors; the latest Boeing 777 jets have more than 1K of them. (Not all depend on date calculations, of course.) Public Service Electric & Gas Co. (NJ) recently discovered two non-compliant processors it had overlooked in a reservoir dam on the Delaware River. [Andrew Pollack, NYT, 05Jan99, C17. Bill Park.] (Safety-critical systems have manual overrides or shutdowns in case of processor failure. Many plants, probably including city waterworks, can be run manually if necessary. On the other hand, it's very disturbing when USA Today runs "Nuke Agency Falsified Y2K Data" because test engineers were signing certifications without having done the tests.)

The cost of fixing the Y2K problem in the US has ratcheted upward again, to maybe $600B before 2000 and another $400B after. AT&T, for instance, has increased its $300M estimate to $900M. The cost of fixing new bugs in supposedly fixed code could push estimates up another 40%. (It has been said that 7% of software repairs are faulty, with nearly half the new bugs capable of causing major errors. Some 15% of newly injected bugs aren't detected before release.) Lives depend on some of this software, which will lead to litigation costs. Samsonite ran into problems upgrading a Denver warehouse operation -- with the help of 20 outside consultants -- and managed to freeze deliveries for 20 days, causing store shortages during the back-to-school season. Forklifts and delivery trucks were being sent to wrong locations, resulting in $4M lost profits on $10M in lost sales. That sort of thing worries General Motors, which has 40K critical suppliers that are only loosely under its control. About 90% of US companies are 2-4 months behind on Y2K fixes, and costs or dangers rise as the Year 2000 approaches. Noted Y2K watcher Edward E. Yardeni of Deutsche Bank Securities now estimates a 70% chance of a recession in 2000 or 2001. [Marcia Stepanek and Steven V. Brull, BW, 14Dec98, p. 38.]

A little-recognized cost of Y2K upgrades is that old data may be unreadable. Buying new computers, operating systems, and applications won't solve the whole problem; data archives must also be upgraded. [Jon Casher, BW, 11Jan99, p. 10.]

Greenwich Mean Time's 2000 PC Deluxe software scans your hard disk for applications that are known to have Y2K problems. $50 from . Symantec's $50 Norton 2000 application goes deeper, looking for likely Y2K bugs in spreadsheets and databases made with Excel, Acess, or other popular PC programs. For instance, it will flag dates that are within about five years of a century-rounding cutoff, typically xx30. It also checks Visual Basic code for likely problems such as two-digit date fields. Fixing the problems is still up to you. [Stephen H. Wildstrom, BW, 14Dec98, p. 20.]

Adding more programmers doesn't necessarily speed things up, even when more programmers are available -- although that may be less true for Y2K repairs than for the new-system development that Fred Brooks wrote about. Anyway, programmers should have plenty of opportunities. The US Dept. of Labor maintains two sites for Y2K-related job openings, resumes, and services, at and . [SJM, 28Dec98, 1E.]

Joel Ackerman of the Rx2000 Solutions Institute (Minneapolis) notes that "Health care as an industry is late in dealing with the year 2000. We are expecting there will be patient injuries, but we don't know how many or how severe." [Washington Post, 31Dec98. Edupage.] (Try not to need hospitalization, which may mean stockpiling a few medical supplies and planning for basic hygiene. If you're dependent on refrigerated medicines, give some thought to days or weeks without electric power or to an extended period of interrupted pharmaceutical production and delivery. You might plan for ice storage, or link up with someone who can use generators to run refrigeration. Herbal medicines might also offer an alternative that can be stockpiled.)

We'll get an early look at Y2K problems when FY'00 starts on 01Feb99 for several large companies: Wal-Mart, Kmart, J.C. Penny, Dayton Hudson, Home Depot, Dell Computer, Toys "R" Us, The Gap, Nordstrom, OfficeMax, Longs Drug Stores, Barnes & Noble, etc. [Jo Anne Slaven. , Cory Hamasaki's DC Y2K Weather Report , 03Dec98.] (It's good that the crises isn't focused on a single day. Software vendors will be able to issue bug fixes in time for most companies to benefit. Replacing faulty chips will be more of a problem, as replacements have to be designed and manufactured. Companies that have gone out of business will pose even more of a problem.)

Computist Ronald Michaels believes that society will quickly repair any Y2K service failures. He has lived in Africa and the Middle East, and was in Ghana during failed and successful coups. Society was little affected because everyone kept doing what they were supposed to. Instead of rioting and plundering, they found ways to get their jobs done. We can expect the same "autopilot" to operate for Y2K problems. Truck drivers will make their usual deliveries, even without confirmed orders. If a driver can't complete delivery, he may sell his goods in a parking lot and then look for a return load. Ham operators will provide communication; block committees will look after individual needs. The biggest problem will be that this will all happen in the dead of winter. Michael expects 80% recovery of electric power and essential industries within two weeks; communications within three weeks; and banking within four weeks. He recommends having 2-3 weeks of non-perishable food in stock, with provision for heat and cooking. Also, work to have your community shelters ready. We can get through this if we prepare to cooperate instead of heading for the hills. [, 06Jan99.]

What Y2K boils down to is really man hours and lost efficiency. Everything can be fixed and made to run again if people put in enough effort. Will the people and expertise be available? And what effect will it have if every business is running at reduced efficiency and high error rates? Combine that with millennial fear, bank runs, and short-term shortages of power, water, food, fuel, and services, plus perhaps long-term changes in the economy and the job market, and you've got the potential for a major worldwide depression. I'm going to stockpile at least some firewood or propane, a few bags of rice and cans of chili, some basic medical supplies, and a little cash. I'm also planning to fill a couple of plastic trash cans with water, more for earthquakes than for Y2K. (I'll bury them most of the way, to strengthen them and protect against earthquake shocks.) Having copies of all important papers can help with disaster claims, especially if computer records are lost, bank and agencies are closed, or safe deposit vaults are frozen. Despite my concern, I'll probably keep most of my retirement money in the stock market or in T-bills. If you're worried about another 1929, be sure you can make your house payments until all this blows over.