-Caveat Lector-
-----Original Message-----
From:xxxxxxxxxxxxxxxx
Sent: Sat 4/21/2001 5:14 PM
To: xxxxxxxxxxxxxx
Cc:
Subject: Y2K Followup from Cory Hamasaki
Mainframe programmer and Y2K commentator Cory Hamasaki here
compares his published outlook on December 1999 (sections
marked "[Dec 99:]") to the present situation ("[Jan 01:]").
He was much more accurate than me; I thought there would be a
lot more problems, and sooner. --Alan
----------------
http://www.kiyoinc.com/WRP142.HTM
cory hamasaki's DC Weather Report
January 31, 2001 - Y2K plus 396 days. - WRP142
.....
.....
-- Maybe Y2K is just a little late! --
.....
.....
[Dec 99:] I'm more certain than before that we'll experience
serious Enterprise systems problems.
[Jan 01:] This is happening and the word is only now escaping the
corporate zone of silence. Xerox's billing system failed and they
are close to bankruptcy. Lucent Technologies is in accounting
system hell. Lots of other companies are in lock-down mode, lots
of CEO's are screaming in terror.
[Dec 99:] The Enterprise systems problem was grossly misunderstood
by Ko-skin-em and the other clueless commentators. Kosky will end
the year, hiding in his bunker, watching CNN for plane crashes and
microwave oven explosions. He'll miss the unwinding and failures
of large systems.
[Jan 01:] Yep, as predicted in 1999, Kosky missed the real action.
The grinding of the large systems problems.
.....
.....
[Dec 99:] The big systems will have persisting and intractable
problems. This has already started. Some firms will fail. The
danger is that failing firms force the misery down to those who
are least capable, least able to endure the suffering. Last hired,
first fired. The CEO will lay off the people who do the work and
will hire temps, subcontractors at 2/3rds salary.
[Jan 01:] Oldsmobile, TWA, Montgomery Ward, Whirlpool, Xerox, all
the dot-coms, Bradlees, Chrysler, the list of companies in
big-time layoff mode is very long. This call is right on.
[Dec 99:] When large companies fail, their failure can wreck the
economies in cities and states. If enough fail, the national or
global economy will collapse. This has happened before. The Great
Depression of the 1930's was such an event.
.....
.....
[Dec 99:] I do not expect a complete meltdown of the economy.
There will be isolated failures. Some firms and some jobs will be
lost forever. Commerce will be degraded but will function.
[Jan 01:] The poster child of Y2K is Xerox. There are lots of
other corporations on the ropes. Exactly why they are tanking is
unclear. Interestingly the pollies are saying that, "Why yes, we
expected this, this is called the business cycle." Ho-kay, then
why did only the doomers cash out of the stock market?
.....
.....
[Dec 99:] I don't expect more power failures, phone outages, or
network failures than we have now. (This is not my area of
expertise. Experts in these areas have issued warnings and some do
expect problems.)
[Jan 01:] I didn't get this one quite right. While I didn't expect
power failures, California is doing its best to prove me wrong.
Does it count if the power company disconnects you because you
can't afford to pay the bill? This is happening right now in
Maryland.
.....
.....
[More commentary from January 2001]
The dot coms have tanked, solid industrial companies like Xerox,
Polaroid, ATT, Lucent Technologies, Kodak, Chrysler, TWA are in
big trouble. Swanson TV dinners, part of Vlasic is defrosting.
Vlasic itself is in the pickle barrel. The flash in the pan tech
startups are burning out, hopefully William Shatner won't be
annoying us much longer with those Priceline.com ads.
The big brained CEO's got it wrong, Bill Schrader of PSI-Net lost
six hundred million dollars. Bernie Ebbers of MCI-Worldcom lost
even more; I make it about a billion bucks. Other clueless losers
include Jaap vad der Meer of Alpnet, Inc, Mark Langdale of CapRock
Communications, Harry Blue of ProxyMed, Inc., Mark Wattles of
Hollywood Entertainment Corp, Al West of Viatel Inc, and Bob
Helmick of eCollege.com. The CEO of Boo.com works as a day laborer
on a ranch.
I hope the WRP readers prepared for this event in the best way
they could. I'm guessing that most of you did cash out of the
market before the NASDAQ began its meltdown.
Look around the next time you're in a Safeway. Based strictly on
the numbers and demographics, several people around you lost a
hundred thousand dollars in the last year, some have lost much,
much more. One person in the crowd is down a million dollars.
Some of them don't realize it yet. Some are in serious denial.
You'll hear them say things like, "You don't lose until you sell."
and "The market will come back, it shot back up after 1987."
Well, no. They're down real money and most of it won't come back.
We cashed out and that's the difference.
The collapse of ATT is especially interesting. Remember the
pre-Y2K fear that the Telco's would have dial-tone problems. I
thought there would be problems but it would be business, batch,
billing, reporting problems.
While I'm not sure what's happening at ATT, I do know that they
have my long distance service snarled up beyond belief. I've been
calling them since August to switch me from Sprint, they couldn't
for 4 months; to sign me up for the 5 cent plan, they signed me up
for the 33 cent plan. I gave them my credit card to use for online
billing, they can't seem to do it. They said they'd send me email
alerts when my bill is ready, the only email I get is spam from
"Nude Kollege Koeds".
The phone seems to work but they can't get the billing going. On
the other side of ATT, they've slashed the dividends that they pay
to the Widows and Orphans, slashed it big time. The rule used to
be that retirees would buy a bunch of ATT stock to give them a
small steady income. Well, because of their internal problems, a
pensioner who might have gotten a $6,000 quarterly check from ATT
is now getting a tiny fraction of that. If they had a hundred
grand of ATT stock, they have almost nothing left. They call it
"Telephone", as in, "I'm getting my Viagra, my Telephone check
came today." and all the blue haired grannies knew that it's party
time in the senior home.
I'm hoping that you WRP readers did as I did, cashed out well
before the crash in the fall of 1999. I hope you all preserved
your savings. I can't tell you how satisfying it is seeing my
year-end 401(k) and SEP-IRA statements. Even though the amounts
are small, it's 4-5% more than last year and 20, 30, 40% more than
it could have been if I hadn't switched to safer investments.
If the average WRP reader has $50,000 in investment savings, the
difference between cash and cash equivalents and year 2000 losses
from go-go stock funds is about $15,000. I figure a 30% spread.
Lose 25% or gain 5%. For those with $200,000, the difference might
be $60,000.
It's impossible to time the market exactly right but we did it. We
beat the best of wall street. Congratulations to all of you.
I've started probing the market with the idea of buying back in.
At some point it will turn around. Finding the bottom is just as
hard as calling the top. You can't do it with charts, you can't do
it with fundamentals. You use a well polished crystal ball, chant
the right chant, cover your body with bear grease, huddle in a
medicine lodge, be one with nature and the world spirit.
Just because I got the top and the turn over right, that doesn't
mean I'll find the bottom. Please, do not blindly follow my
natterings. Read them, compare my cluelessness to what you see
around you, and make your own best decisions.
.....
.....
Things are about as bad as I thought they'd get. The economy is
shaky. By the formal definition, we're not in a recession yet but
frankly, we've been in one since mid-summer. You know it, I know
it, and it's getting worse.
We are this close to a 2nd running of the Great Depression. It's
happening as feared, on schedule, exactly as it was supposed to
happen. Back room, batch systems produced incorrect reports. In
some cases, management is lulled into thinking that things are
better than they are. In other cases, it looks worse. Some
companies know that they don't know what their bottom line is.
Others are clueless.
A few companies have admitted that their systems have failed.
Lucent blames "bad accounting". Xerox can't invoice customers.
Most are still in cover-up mode but you can see the external
symptoms, layoffs, closings, late payments, cutbacks. This is not
business as usual.
Be cautious. The stock market crash of 1929 was followed by 3
years of false market recoveries. This suckered normally realistic
investors back into the market. They lost their money when the
market resumed its fall in 1930, 1931, 1932. This was followed by
decades of poor returns and a little disruption in commerce called
World War II.
Our OPEC Pals are tightening oil supplies and raising prices. The
dot coms have crashed. The PeeCee industry is on the ropes. Old
line businesses are failing. Inventory is being liquidated. New
layoffs are announced daily. We'll get through this but we won't
do it by following the herd.
I've given you a 1 year heads-up on the recession and I'm hoping a
solid financial edge, enough that you'll be able to prosper no
matter what happens. But ya gotta keep the pressure up. Whatever
your situation, keep the pressure up. Even if you're a high-net
income earner, don't buy that new SUV. Sock away the cash and keep
driving that 4 year-old Pontiac. Keep living below your means just
as you did to prepare for Y2K. Buy stuff on sale. Find joy in
small things, your garden, the library, window shopping.
Take care, gang.
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