January 4, 2000 7:20 AM PST

Y2K expert Yardeni prepared to admit he was wrong

Ed Yardeni Dr. Ed Yardeni, a Deutsche Bank economist who predicted a worldwide recession due to the Y2K problem, said he is ready to admit he was wrong if no serious Y2K-related problems emerge.

In a statement posted Sunday on his own Web site, Yardeni.com, one of the more outspoken doomsayers on the Y2K problem, said he is "impressed and pleased by the smooth transition into 2000 so far." He also said the risk of disruptions to global supply chains, which was his No. 1 concern, now seems less likely to occur.

Back to Year 2000 Index Page He also said that if no "significant" problems occur by the end of this month, he will admit he was wrong about a Y2K global downturn.

In the statement, Yardeni credited the IT community for a successful century date change as well as Y2K preparedness efforts by John Koskinen, the U.S. government's leading Y2K man.

"Looking back, I certainly don't regret my efforts to raise awareness," Yardeni said in the statement. "Y2K was a big problem. Hopefully, in the next few weeks we will find that it has been mostly fixed."

This has been the first statement released from the Y2K skeptic since he posted his last Y2K Reporter, dated Dec. 13, a widely read online report where he dissects the latest news on Y2K. And, while the rest of the world increased its coverage of the infamous millennium bug leading up to the days of the actual event, Yardeni had been notably silent.

Y2K: The cost of fear In his December Y2K Reporter, Yardeni took an opportunity to clarify his position on the outlook for Y2K and beyond.

At the time, Yardeni said he remained "amazed by the confidence of all the optimists," reiterating his stance that Saturday, New Year's Day, should be uneventful and if problems occur, they will most likely take place during the first three months of the year.

Yardeni, who earlier painted a worst-case economic scenario for the first six months of 2000, also noted that while he still expects a recession that could linger into the second half of next year, he also believes "there should be some signs that the worst is over and that a recovery is on the way." This is due in part by companies that have preannounced a reduction in earnings during the first and possibly second quarters of 2000 because of Y2K computer glitches, according to the December Y2K Reporter.

In the report, he also admitted that he expected stock prices would be falling as the year ended, but instead, they've soared. At the time, Yardeni, who describes himself as a "long-term bull," said he sees lower stock prices over the next six months and a rebound to new highs next year with the Dow Jones Industrial Average topping 15,000 by 2005. Yardeni has taken this outlook since 1997, which was when he started to closely follow the Y2K problem.

 

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