Document text
Seven reasons why your money is safe from the Millennium Bug by Erik J. Martin Okay. Take off the kid gloves. The dreaded second half of 1999 is finally upon us. Time to start really panicking about Y2K potentialities like the stock market headed south and low cash availability and hold on to our wallets for dear life, right? Wrong. Lighten up and loosen up that tight money clip. Sure, there are valid fears of a Y2K-sparked recession and bear market. Yes, it's true that many companies truant in their Y2K-compliance efforts may be hit hard by the bug, negatively affecting consumer confidence and giving investors the jitters. But, as the year has progressed, money-conscious Joes and Janes like you and me have more reasons to be optimistic that their carefully saved and invested greenbacks will be safeguarded from any two-digit defunct shock waves that the dwindling numbers of financial doomsayers are predicting may rock the economy. Here are seven lucky reasons to relax about Y2K-related money worries: 1. A trillion dollars of insurance. Experts predict that, when it's all said and done, more than $1 trillion will have been invested into correcting the Y2K problem across the globe. That's sure to boost the global economy and provide investors, consumers and businesses better peace of mind. 2. Banks are on the ball. Ninety-eight percent of banks insured by the Federal Deposit Insurance Corporation are now rated satisfactory in regard to their Y2K compliance. Only 205 of the 10,400 banks insured by the FDIC are labeled as "less than satisfactory." The banking industry is reportedly expected to spend more than $8 billion nationally on to correct the digital date problem. ATM networks and cash-machine manufacturers are working hard to carefully test and correct their products. What's more, the FDIC is requiring that banks and thrifts that fall in the "unprepared" category use a standard backup system for storing key deposit and loan data, another measure designed to provide customers quick and painless access to their cash in the wake of any Year 2000 problems. 3. Businesses are stepping up their Y2K efforts. Ninety-four percent of companies in the Standard & Poor's 500 index are expected to have their computer systems compliant by September, according to a leading investment strategist. 4. Recession fears are lessening. Some financial experts now rate the risk of a recession spurred on by the Year 2000 problem to be less than 10 percent. Though fourth-quarter investments may suffer slightly, there may be a massive return to a bull market by January if the number of pre- and post-New Year's bugs turns out to be low. Consider that when the S&P's 500 index dropped 19 percent during six weeks last summer, the majority of investors crossed their fingers and didn't bail out of the market. The market quickly rebounded and record index highs followed. 5. More cash on hand. By the end of the year, government vaults will have $200 billion in currency stored, up $50 billion from what is normally held in reserve. Add that to the $460 billion in U.S. notes circulating across the world. Even if nervous citizens start stashing cash out of Y2K fears, there should be plenty of extra moolah around. 6. Y2K loans a-plenty. Banks, credit unions and thrifts will be able to receive special loans via a Federal Reserve plan created to ensure that they can handle emergency demands for funds triggered by Y2K fears. The U.S. Small Business Administration also signed into law last spring the Y2K Action Loan Program, aimed to provide loans to small businesses who may need help testing for, repairing and recovering from the millennium bug. Businesses that have established credit with the SBA may be able to borrow up to $1 million. 7. Wall Street precautions. As a Y2K-scare preventive measure, the New York Stock Exchange is delaying plans to expand its 9:30 a.m. to 4 p.m. trading day until sometime next year. Furthermore, trading on the NYSE, the Nasdaq and the American Stock Exchange will end early, at 1 p.m., on New Year's Eve. While some naysayers analyze these moves as indications of the eroding confidence of investors, other experts praise these steps as prudent in a market somewhat certain about Y2K. Both moves could deter domino-effect massive selloffs from anxious investors who may have been fatigued by a longer trading day. 1999 Thomson Target Media Erik J. Martin is a freelance journalist who has penned a regular multimedia column for Screen Magazine and has written for a variety of other publications, including the Chicago Tribune, Coverstory and The X-Files Official Magazine. He lives in Oak Lawn, Illinois, with his wife, son, and the Millennium Bug, which he is still trying to exterminate from his PC. Certainly no self-proclaimed technowhiz, Erik prides himself on being "an average guy with the same concerns and questions about Y2K as everyone else. My job? To get answers to those questions, and pass them along to you." Techno file index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA