This essay updates information in my original Y2K essay written in May 1999 dealing with the Y2K computer bug. That essay provides essential background for this update and should be read first. My September 1999 update is also background for the essay. Neither of the earlier essays is very "dated" insofar as most of the information is concerned with general concepts and is, in that sense, "timeless" (before January, 2000, anyway).

THE STOCK MARKET AS THE LITMUS PAPER OF POPULAR CONSCIOUSNESS

In my September update I stated my belief that there would be a stock market crash in October -- and that I was heavily invested in my bearish expectations. Although the stock market experienced declines not seen since 1987, toward the end of October it was clear to me that I was losing money and that there would be no crash. I also began reading THE WALL STREET JOURNAL regularly.

My prognostications had been based upon my belief in a widespread consciousness-of and fear-of the Y2K problem. My losses and my readings brought home to me that there is widespread belief (based on innumerable "We're ready for Y2K" press releases and explicit statements by Fed Chief Alan Greenspan) that that Y2K problem has been fixed. The strongest Y2K impact on the market I saw followed IBM's report of lost revenues due end-of-year purchasing freezes on mainframe equipment. One commentator dismissed this explanation as being in "the dog ate my homework" genre.

Since October -- and as of this writing in mid-December -- I have become convinced that the vast majority is unlikely to begin worrying about Y2K until the week between Christmas and New Year's Eve -- if then. In shifting my investments from short to long positions I have profited greatly. I am have just shifted from long to short again.

I had originally thought that the anticipation of Y2K problems would be as severe as the Y2K problems themselves. I now think there will be more concern (and a stock market plunge) in the week before January 1st, but that the reality of the Y2K bug will be much more severe than the anticipation.

HAS THE Y2K PROBLEM BEEN FIXED?

Governments and businesses in the United States have reportedly spent over $100 billion on Y2K remediation. This is about a third of the total spent world-wide. Per-capita Y2K spending in Canada is several times what was spent in the United States (http://www.globetechnology.com/archive/gam/Y2K/19991118/RY2KK.html). Spending of this magnitude implies that disasters of comparable magnitude were (and are) possible. Could something have been missed?

The Gartner Group has estimated that only 3-7% of large companies had their remediation work done by outside consultants. When independent validation has been done of supposedly remediated software, at least as many bugs were found as had been fixed (http://www.computerworld.com/home/print.nsf/all/991129CE6A). Remediation work has only been done on systems which were deemed to be "mission-critical". Could judgement errors have been made in assessing what is mission-critical and what is not? And could there be a discrepancy between tests simulating a date-rollover and an actual date rollover?

NASA has a reputation for producing computer code that is at least a hundred times more bug-free than code in general use. Yet NASA can make disastrous mistakes. Three months before the Mars Polar Lander was lost, NASA's Mars Climate Orbitor plunged into Mars because of an incorrect assumption that acceleration data was in metric rather than imperial units. After the Challenger Space Shuttle disaster, physicist Richard Feynman was asked to investigate. He found that probability-of-failure estimates were about one hundred times higher among working engineers than among management. Feynman asserted that NASA management "exaggerates the reliability of its product to the point of fantasy" -- mutually-reinforced wishful thinking in the face of external pressure for an acceptable answer (http://ourworld.compuserve.com/homepages/roleigh_martin/chalnger.htm).

Nearly a third of small businesses plan to do nothing at all about Y2K remediation -- believing either that the issue has been overhyped or that they can fix on failure. Small businesses account for more than half of the Gross Domestic Product (GDP). Large companies could find themselves incapacitated by their dependency on critical supplies & services from small companies.

EMBEDDED SYSTEMS

The question of possible problems with embedded systems is rarely discussed, despite the fact that these systems may represent the greatest risk. Most remediation & testing has been focused on large "mission-critical" software systems. The best short summary of the problem I have seen comes from the Water Resources Control Board of California: http://www.swrcb.ca.gov/y2k/html/summary.html. Another overview of the embedded systems problem can be found at http://www.y2kjournal.com/hot/greif.htm, although not enough emphasis is placed on the seriousness of "Process Control and Monitoring Equipment" malfunction.

Lengthy crippling of manufacturing capabilities would lead to economic recession or depression. In some cases, particularly in association with chemical and nuclear facilities, there is a possibility of disaster. 90% of small chemical companies are not prepared for Y2K. Nearly 5,000 American chemical facilities store larger quantities of more hazardous substances than were released in the Bhopal, India Union Carbide disaster which killed 8-9 thousand people with toxic clouds of methyl isocyanate (http://ens.lycos.com/ens/dec99/1999L-12-02-07.html).

The United States & Russia have established joint command centres to guard against an accidental missile launch during the Y2K rollover, but India & Pakistan have apparently still made no efforts toward co-ordinated prevention of a Y2K mishap. There are over 400 nuclear reactors in the world, and there is a real danger of critical malfunction in at least one of them, particularly in Russia, Eastern Europe and India.

CHRISTIAN MILLENNIALISM AND Y2K

Most of Christian Millennialism is based on the last book of the New Testament, the Book of Revelations -- also known as the Apocalypse of St. John the Apostle (although most scholars now believe it is unlikely that this John was the same person as John the Apostle). Revelations is the only apocalyptic book in the New Testament, and it is rich with suggestive symbolism and evocative images, such as the Seven Seals, the four horsemen of the Apocalypse, the AntiChrist, the Battle of Armageddon and 666 ("the Beast"). The Manichean dualism and the millennialism in Revelations is suggestive of Zoroastrianism & Sumerian mythology. It may be no coincidence that Revelations was written on the Aegean island of Patmos, just off the coast of what is now Turkey.

In the Apocalyptic view of the Book of Revelations, the world becomes dominated by evil. Believers represent a despised & persecuted minority. In the endtimes an AntiChrist (false prophet -- a human accomplice of Satan) causes all the world to worship the image of the Beast (identified by the number 666). Christ then returns to earth (at the Mount of Olives in Israel) and leads his Christian Soldiers against the AntiChrist in the Battle of Armageddon ("mount of Megiddo" in Hebrew) in the valley of Megiddo in Israel. Christ would then reign over the world in a thousand-year utopian theocracy, following which would be the resurrection of the dead and the last judgement.

What relationship could there be between the "millennial reign of Christ" and the coming of the new Millennium of the Gregorian calendar? "With the Lord one day is like a thousand years" (2 Peter 3:8). For six days of the week mortals are estranged from God ("666" is the number of The Beast), but the 7th day is the Lord's Day. By some interpretations 1999 is the 5999th year of human history since the creation of Adam & Eve. The Hebrew calendar equates 1999 with the year 5760, but the rabbinic chronology reputedly erred in the dates of the Babylonian Exile and the number of years spent by the Jews in Egypt.

According to a recent Newsweek poll (Newsweek, November 1, 1999), 40% of American adults believe the world will end in a Battle of Armageddon between Jesus and the AntiChrist, and nearly half of those believe that the AntiChrist is now on the earth. Reverend Jerry Falwell has said the the AntiChrist is probably already among us, and has characterized the Y2K computer bug as "God's instrument to shake this nation".

Currently there are at least 100 Christians living on the Mount of Olives. The Israeli government has evicted or refused entry to a number of apocalyptic Christians who were suspected of violent or suicidal tendencies. The Oklahoma City bombing was timed to correspond to the anniversary of the destruction of the apocalyptic Branch Davidians in Waco, Texas. Colossal acts of terrorism at the stroke of midnight of the year 2000 would have a devastating impact in a world of drunken celebrants and Y2K computer failures.

The FBI has distributed a report titled "Project Megiddo" to local police throughout the US. The report warns of "violent extremists" with apocalyptic religious or political beliefs who may see New Year's 2000 as an opportunity for violent disruption (http://www.fbi.gov/pressrm/pressrel/militias.htm). Saudi millionaire-terrorist Osama bin Ladin (thought responsible for the bombing of American embassies in Africa) and others are reportedly targeting crowds of American tourists, particularly in Rome or Israel. bin Laden told a Time magazine interviewer of his recent interest in chemical and biological weapons (http://www.ict.org.il and http://www.terrorism.com).

Interpol has estimated that there are 30,000 hacker-oriented websites worldwide, and there are warnings that as many as 200,000 viruses could be unleashed which are masquerading-as or exploiting the Y2K bug (http://www.cincypost.com/business/y2hack110199.html).

PANIC, PREPARATION AND PERSONALITY

What will happen on the Y2K rollover? The conventional wisdom now seems to be that there will probably be some glitches, and that people should prepare as if for a 3-day snowstorm. The truth is, no one knows what is going to happen, partly because this event will be unlike anything experienced before in the history of Mankind. There are bound to be worldwide failures of unpredictable magnitude over the month of January -- and the simultaneous occurrence of failures can easily amplify the effect.

Panic or concern can create self-reinforcing crisis. If enough people check their telephones at midnight or make concerned phone calls to friends & relatives, the phone lines could become inoperable. The inability to call for ambulance or the fire department could drive some people to hysteria. New Year's will not be a good time to be needing medical or hospital assistance -- and this is only partly because of the poor Y2K preparedness of health services.

There will not be enough armored cars to keep bank machines filled with money if large numbers of people withdraw large amounts of cash on December 31st. Even the usual 2% of bank machines which are normally nonfunctional could trigger panic.

Personality factors often govern people's beliefs more than evidence. With evidence so hard to come-by, it is not surprising that wishful thinking predominates. Although most people wish for the best, some wish for the worst. Others simply repress thinking about Y2K, although this becomes increasingly difficult to do as the moment of truth approaches.

Prevention of panic undoubtedly motivates many who make public reassurances. But there is a fine line between preventing panic and promoting complacency. If people in a crowded theatre are informed of a fire, many people may be trampled to death. But if they are not informed, more may burn to death. If people are told to leave because the roof is starting to leak, they may move too slowly to prevent death by fire. Finding the right lies to tell is always a problem for public spokespersons -- even on those occasions when they actually know the truth.

WATCHING Y2K UNFOLD AROUND THE WORLD

A rating of preparedness of world nations can be found at http://www.iy2kcc.org/countryweb.htm. In China, for example, an estimated 95% of software is thought to be pirated. Saudi Arabia, Kuwait, Venezuela, Iran, Iraq and Nigeria are major oil exporters thought to be ill-prepared for Y2K -- which could have serious economic impact world-wide. Up to a half-million pilgrims are expected in Rome to celebrate the beginning of Christianity's third millennium, yet Italy is one of the least Y2K-ready of any European country. Candles and prayers may become more of a necessity than most people expected.

To see a map of how the Y2K rollover will progress along time-zones, see http://orlandosentinel.com/news/y2k/y2ktimemap.htm and http://www.jrwhipple.com/z2k. A very detailed delineation of world time zones can be found at: http://www.worldtimezone.com. A special impact may occur in North America and elsewhere at midnight Greenwich Mean Time (GMT) since many systems reference GMT. However, the greatest impact may not be at midnight, but on January 3rd or 4th when the world returns to work. A reasonable assessment of the full impact of the Y2K rollover will not be possible until March, 2000 -- after two cycles of monthly business processing and the passing of Y2K leap-year.

ABC will offer a 24-hour telethon-like news coverage of the Y2K rollover beginning at 5am Eastern Standard Time (EST) on December 31st. CBS will focus on celebrations and NBS has not disclosed its plans.

A number of websites will provide timely updates on the rollover as events unfold. Time-ordered (minutes/hours/days) news releases can be found at http://www.newsnow.co.uk/cgi/NewsNow/NewsFeed.htm. Y2K news releases classified by day (but updated several times during the day) can be found at http://www.year2000.com/y2karticles.html and http://www.y2knews.com/. Other Y2K "Command Centers" can be found at http://www.davislogic.com/watch.htm,   http://www.russkelly.com/commandcenters.html,   http://www.iy2kcc.org/, and http://www.einmedia.com/y2k/ .

For an update on information in this article go to The Y2K Computer Bug -- Update February 2000

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