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FINANCIAL MISCONDUCT: Y2K, a bigger fraud than Madoff ever thought to be.

By Steve Lombardi

How smart are you? Smart enough to make politicians and Wall Street along with the AMA and other professional organizations prove a crisis exists? Well let's see how smart you really are. Remember Y2K? Do you recall the fear of the Internet collapsing and you losing all of your data? Did you run out and buy a new computer along with new software? Did you only then feel safe? They, meaning Wall Street, the White House, Congress and Silicon Valley were laughing at you the entire time.

You see Y2K was made up to prop up IT income statements and balance sheets to maintain the stock market run of Internet stocks. It was a hoax. Really, you think I'm full of it? So did my stock broker.

My stock broker said the same thing as you're thinking, except he was more diplomatic about it. In November of 1999 I instructed him to sell every small and mid cap internet stock that I owned. He warned me against it and warned further that I'd miss out on another run.

No I don't think so, because stocks are going to tank right after January 1, 2000.

Why, he asked.

Because Y2K is phony and it's being used to prop up Wall Streets earning reports, I said.

How do you know?

I can prove it to you, I said.

How?

We'll let's you and I go out to the secretary pool, unplug any computer from the main frame, set the cursor on the right bottom corner, right click and reset the time to December 31, 1999 11:59 A.M. and in less than one minute I can prove to you it's one of the greatest marketing frauds of my lifetime.

How do you know nothing will happen?

Because I tried it at home and nothing happened. The computer's mother board didn't burst into flames, the lights in the neighborhood didn't go out, people didn't run out of water and cars continued to run on gasoline.

Now don't you feel just a little foolish?

You see fear is the fuel of Wall Street profit runs. Fear is the great motivator. Fear makes you and I run scared and we'll buy anything, even if we don't need it and buying it makes no sense to those few individuals who still have common sense.

Silicon Valley set in motion the second greatest recent marketing campaign America has ever seen. They scared people into buying new software; software that wouldn't run on your old computer. And then you had to buy new hardware. And new software and hardware might not even be enough to protect your data. And so you bought a new backup system and portable hard drives and that all required IT service technicians in all of our towns to sit in front of our computers clicking keys and wearing their most worrisome facial expression that signaled doom was right around the corner. My tech guy's name was Flanagan and I nicknamed him Flim-flam Flanagan. If I stood just outside the office where he worked on one of our office computers there was silence; but let me break the threshold in the doorway and the keys clicked and clacked and he'd look over his shoulder at me struggling to get his best dooms day grin on and nod in my direction with assurance that he had it almost under control; or nearly. They never wanted you to think things were completely safe and under control. Fear is a friend that the tech guys take to lunch quite often.

And that ladies and gentlemen is the second greatest fraud in recent history. It makes Madoff's operation look like kids stealing gum from the 5 and Dime.

WILIPEDIA'S EXPLANATION – I ADDED THE HIGLIGHTS.

The Year 2000 problem (also known as the Y2K problem, the millennium bug, the Y2K bug, or simply Y2K) was a notable computer bug resulting from the practice in early computer program design of representing the year with two digits. This time code ambiguity caused some date-related processing to operate incorrectly for dates and times on and after January 1, 2000 and on other critical dates which were billed "event horizons". Without corrective action, long-working systems would break down when the "...97, 98, 99..." ascending numbering assumption suddenly became invalid. Companies and organizations world-wide checked, fixed, and upgraded their computer systems.

While no significant computer failures occurred with global significance when the clocks rolled over into 2000, preparation for the Y2K bug had a significant effect on the computer industry. However, the fact remains that countries who spent very little on tackling the Y2K bug (such as Italy and South Korea) performed just as well as those who spent much more (such as the United Kingdom and the United States), this has generated controversy on whether the absence of computer failures was the result of the preparation undertaken or whether the significance of the problem had been overstated.^[1]

Here look at this website just for Y2K.

Y2K Information and Resources

Y2K Resources

Y2K Information Center
Contingency Plans
Y2K FAQ
Clearing House
Technical Support

Industries

Utilities
Banking
Manufacturing
Telecom
Real Estate
Agriculture

What is Y2K Bug?
During 1960s to late 80s there was a widespread practice in all computer software's to use two digits for representing a year rather than using 4 digits. This was done to save computer disk and memory space because these resources were relatively expensive in those times. As the year 90's approached experts began to realize this major shortcoming in the computer application software. In year 2000, the computer systems could interpret 00 as 1900 messing up all the computing work. For example if a program function is calculating difference between two dates, it would calculate a negative number. For example difference between 1 Jan 2000 and 31 Dec 1999 could be calculated as -100 years rather than 1 day. This was a major bug for the whole finance industry. The bug not only existed in computer software but it also existed in the firmware being used in the computer hardware. In general this bug threatened all the major industries including utilities, banking, manufacturing, telecom, airlines.

How was it averted?
Y2K bug was a clicking time bomb for all major computer applications. The computer and system application companies came out with year 2000 compliant operating systems and system software. IT companies around the world spent billions of dollars to go through their entire application source code to look for the Y2K bug and fix it. Almost everybody raced around to make themselves Y2K compliant before the fast approaching deadline. Finally when the big day came, many utilities and other companies switched off their main computers and put the backup computers on work. When the clock ticked Jan 1, 2000, no major problems were reported. Almost every bank worked fine, no major power outages were reported, airplanes still flew and the whole world went on with its normal life.

Yawnnnnnnn… are we sheep? Can you say Bahhhhhhhhhhhhhhh?

Originally posted at InjuryBoard by Steve Lombardi

Full post as published by Des Moines Personal Injury Lawyer on April 20, 2009 (boomark / email).