Y2K Doomsayers Say They Were Wrong
CHICAGO (AP) _ They were ominous. They were shrill. And now some of the most prominent Y2K doomsayers are ready to admit it, to a point: They were wrong.
After helping to stoke widespread fear of financial catastrophe striking when the world’s computers turned over to ″00″ on New Year’s Day, two economic whizzes now acknowledge that a global recession doesn’t look likely after all. But they insist they’re happy to have erred.
``I’m just totally stunned,″ says Dennis Grabow, an investment banker who has been forecasting a Y2K meltdown for two years from his downtown Chicago office.
``Those of us who have been following this issue are quite shocked that we’ve had this seamless transition,″ he said. ``It’s phenomenal.″
Grabow’s Chicago-based Millennium Investment Corp. has been dispensing its Y2K-calamity investment strategy to clients with $20 billion under management.
Anticipating a market correction and then a recession, he advised his clients to prepare for the worst and has given about 100 speeches in the past two years, taking on a role that one newspaper characterized as that of a Y2K Cassandra.
Similarly, noted economist Edward Yardeni has been warning of a Y2K-related recession since 1997, saying the economy was likely to shrink this year because of widespread computer failures.
Now these Y2K Chicken Littles have egg on their faces. But neither indicated regret in telephone interviews this week, figuring they can take some small credit for sounding alarms that may have helped wake up companies and others and helped avert what they say could have been colossal computer headaches, or worse.
Besides, Grabow joked, no matter what anyone else might say about his failed prediction, ``I know my mom still likes me.″
After advising his clients the previous day that he was preparing to admit his Y2K errors, Yardeni, the chief economist for Deutsche Bank Securities Corp. in New York, came clean Tuesday.
``The recession forecast was just wrong,″ he said. ``That’s simply the fact.″
``It turns out that none of my concerns were warranted,″ he said, ``and that the Y2K community did a great job of giving us a flawless transition.″
Dale Vecchio, an analyst who has followed Y2K issues for five years, notes in the doomsayers’ defense that some $300 billion to $600 billion was spent worldwide, more than $100 billion in the United States alone, to help ensure there would be no Y2K catastrophe.
Also, his firm still projects that 55 percent of Y2K computer glitches will occur throughout the year, with only 10 percent of the problems showing up last weekend.
But he criticized the direst warnings for relying too heavily on second-hand information rather than first-hand technical evidence.
``There weren’t sufficient facts to report the duration and severity of outages necessary to create those disaster scenarios,″ Vecchio said from the technology consulting firm’s offices in Stamford, Conn.
Grabow agrees, saying people who call Y2K a non-event underestimate the effect of the huge preparedness efforts and are in too much of a rush to declare it over.
``We have thus far been lucky,″ he said.
Leap year day on Feb. 29 poses another potential problem for computers not programmed to deal with an extra day in an unplanned-for millennium. But you won’t hear the Y2K bears trumpeting a prediction of chaos this time.
Grabow said last month he might have to ``chop logs in Idaho″ if he was wrong on Y2K again. Now he says he remains, as always, ``an extreme optimist.″