Millennium bug 'could end bull run'

THE MILLENNIUM bug could prove to be the shock that ends Wall Street's 12-year bull market, a senior US economist warned yesterday.

Edward Yardeni, chief economist of Deutsche Bank Securities in the US, told participants at the World Economic Forum in Davos, Switzerland, that a build-up of negative news on the year 2000 problem might cause stock markets to dive.

Separately, Scott McNealy, chief executive of Sun Microsystems, said that Asian companies making PCs and computer components lagged the US and Europe by several years in dealing with the bug.

Advising consumers to "buy lots of computers in the second half of this year," he warned of severe supply problems after the turn of the century.

"We believe Asia is way, way behind," Mr McNealy said at the WEF annual meeting. "Intel, Sun and Hewlett Packard have done quite similar surveys of their supply base in Asia and they confirm the region is significantly behind in dealing with the problem."

However, the effects of the bug were played down by Bill Gates, head of Microsoft, who said he thought the problem had been much exaggerated by the press. There were bound to be some problems, he conceded, but he did not foresee a general systemic breakdown.

Mr Yardeni predicted a build-up of bad news on the bug from June onwards as companies began to make their SEC filings on whether they were millennium bug compliant.

"There are already 34 millennium bug lawsuits outstanding in the US and we'll see a lot more of that," he said.

Mr Yardeni said he thought the present euphoria in Internet stocks was symptomatic of "one of the greatest speculative bubbles on Wall Street of all time".

"If the stock market dives, which I think it will do in the second half of this year, then it will take the US consumer and economy with it," he warned.

"I don't know when exactly it will top, but I have no problem at all with lightening up and taking profits right now," he added.

A number of executives from the computer and Internet industries said that they thought the frenzy in Internet stocks was casting a cloud over legitimate high-growth companies that were transforming the way business was conducted across big tracts of the economy.

"The stock prices are unbelievable," said one industry leader, "but so are the growth rates in electronic commerce."

Mr McNealy used a press conference at the WEF to launch a new attack on Microsoft's near monopoly of personal computer operating systems.

He claimed that Microsoft was using the monopoly to "leverage" itself into all kinds of other businesses in a way that was stifling innovation and development in the industry.

He was sceptical that the various break up remedies proposed - splitting Microsoft into three competing companies or separating its operating system and applications arms - would correct the problem.

Start your day with The Independent, sign up for daily news emails
A boy holds a chick during the Russian National Agricultural Exhibition Golden Autumn 2014 in Moscow on October 9, 2014.
Arts and Entertainment
Dakota Johnson as Anastasia Steele in Fifty Shades of Grey
Bafetibis Gomis of Swansea City is stretchered off at White Hart Lane
Jerry Seinfeld Comedians in Cars Getting Coffee
peopleSitcom star urges men to be more supportive of women than ever
Life and Style
Living for the moment: Julianne Moore playing Alzheimer’s sufferer Alice
Jay Z
businessJay-Z's bid for Spotify rival could be blocked
footballLouis van Gaal is watching a different Manchester United and Wenger can still spring a surprise
The spider makes its break for freedom
ebooksA special investigation by Andy McSmith
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
Arts and Entertainment
World Book Day
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle v United player ratings
Life and Style
love + sex
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot