I haven't quantified this, but I think that the Year 2000 problem will be=
a
disaster for the stock and bond markets. My main concern is the lack of
preparation on the part of suppliers. Example: an insurer owns stocks o=
r
bonds in XYZ corporation, which is one of the Fortune 500. XYZ's systems=
may all be Y2K- compliant but if the local power company can't supply
electricity or the air traffic control system comes to a screeching halt
(meaning XYZ can't get supplies and can't ship its products) or the compa=
ny
which supplies an essential part for XYZ's products has Y2K problems, it'=
s
going to depress earnings. And I won't even go into the D & O suits whic=
h
will result.
Part of a good Y2K preparedness program, of course, is contacting supplie=
rs
to find out what they're doing. At some point, however, you have to acce=
pt
their answers or you have a new fulltime job solving the Y2K problems of
your suppliers.
Keep in mind also that business is a lot more international than it used =
to
be. If you don't believe me, check the labels of the clothes on the rack=
of your average department store and see where they were assembled. =
Awareness of the Y2K problem varies by country and lack of preparedness a=
few thousand miles away will affect North American industry.
MBA's Web site at http://www.MBAInc.to includes a page of links with an
entire section on the Year 2000 problem, ranging from the practical to th=
e
apocalyptic.
Regina M. Berens
MBA, Inc.- Consultants in casualty Actuarial Science
Mountain Lakes, NJ
http://www.MBAInc.to
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