From csy2k, John Ainsworth post:

I wrote the reporter who wrote the Yardeni 45% recession thing. She explained it to me. Here's her answer.

Hi John, yes the figure is a bit confusing. In Ed's newsletter he says he is still holding at 70% yet in his chart you can see in the Feb newsletter that he givbe 40% to a recession lasting 1 year and 5% to a longer recession. I talked with Ed and his quote should clarify the situation. He stated that the chances of severe recession was 45%. i agree, the newsletter is a bit confusing. Hope this helps.

Ashley.

Ashley Dunn Technology reporter The Los Angeles Times ashley.dunn@latimes.com 818-790-7174 213-237-7002 --ainsje

Yardeni hasn't changed at all (see http://www.yardeni.com/y2kbook.html#B1.1). His prediction of global recession remains at 70% if you include the last 3 categories in his table (moderate, 25%; severe, 40%; catastrophic, 5%). The reporter simply took the last two categories for "severe" (meaning at least one year in length), not all-inclusive "global recession."

-- (factsleuth@gotcha.com), March 13, 1999

Answers

Goody, now I can go back to worrying even more!

-- JPParks (JPParks@jps.net), March 13, 1999.

Factsleuth--

Thanks for clarifying this. :>)

-- Scarlett (ohara@tara.net), March 13, 1999.

Figured as much...

-- Drew Parkhill/CBN News (y2k@cbn.org), March 13, 1999.

To me, the significant addition was the 5% chance of a depression that he added last month. Considering that respectable economists NEVER (I mean, NEVER) quantify the possibility of a depression at > 1%, this was extraordinary.

Remember the heat that Ed Yourdon took for his (admittedly larger) expectation, and Ed "is no economist". "Depression" really is the only 4-letter word in our vocab and it puts Yardeni into a kook category as far as some on the Street are concerned. This, in turn, implies how little Yardeni's basic outlook has changed over the past 18 months: he remains a serious alarmist.

-- BigDog (BigDog@duffer.com), March 13, 1999.

Factsleuth; Good work. The article was not in harmony with his site.

-- Watchful (seethesea@msn.com), March 13, 1999.

Is Yardeni another spinmeister? Likes to confuse the issues, or just doesn't have to hang his nuts out on a limb? After all the top dogs have their credibility and reputation to watch out for. At least Gary North doesn't make any bones about where he's coming from.

-- WCFields (WCFields@WC.com), March 13, 1999.

WC,

In this case, the spinmeister wasn't Ed Yardeni; it was the reporter from The Los Angeles Times.

-- Kevin (mixesmusic@worldnet.att.net), March 13, 1999.

WC -

Ahh, yeeeees... "Anyone who hates kids and dogs can't be all bad..."

Ed Yardeni has taken flak from all over ever since he began publishing his "Y2K forecasts" about two years ago, and he continues to be labelled a "pessimist" and worse. Yardeni and Yourdon were the two "voices" which really put Y2K on my radar. I have no problem with what he's saying; he backs it all up with solid analysis. It's the analysts like Abby Joseph Cohen (who absolutely refuses to see anything but blue skies and green lights) who deserve a good whack upside the head.

-- Mac (sneak@lurk.com), March 13, 1999.

Actually, Yardeni mentioned the possibility of a depression at least as far back as last June, at his address to the world bankers in Basle, as I recall. I think this is just the first time he's quantified the percentages, at least on his own site. He's done it on others before.

As for Abby JC, to be fair to her, she did foresee the 1990 recession (which wasn't hard), so she does see bad news sometimes; however, her research on Y2K has apparently extended only to "Well, the companies tell us they have it under control."

-- Drew Parkhill/CBN Noose (y2k@cbn.org), March 13, 1999.

Yourdon and Yardeni: the "Y2's" of Y2K.

-- Elbow Grease (Elbow_Grease@AutoShop.com), March 13, 1999.

Drew -

I also suspect that Goldman Sachs' recent IPO has had some effect on her stance. Negative forecasts could have an adverse impact on market valuation.

-- Mac (sneak@lurk.com), March 14, 1999.

After doing my own research and checking with people in both the Software Business as well as the Financial Industry, I confirmed that both Ed's are among the best in their respective industries, among the best! These two deserve alot of credit for going against the grain and sharing their messages with us, everyone else appears to have very little or NO CONCERN about this thing called Y2K? After several hours of reading and research, it's apparent we are not going to make the deadline! 3rd world Countries?? Good luck to all and Thank you to these two(Yourden and Yardeni) for taking a stance for what they believe in, verses doing whats' politically correct.

-- Rocco Mancini (Roccof4@aol.com), March 14, 1999.

Please see my article on the L.A. Times' coverage of Ed Yardeni's Y2K predictions by clicking here. By the way, Ashley Dunn, the Times reporter, is a he, not a she, and a very nice guy.

Thanks,
Scott

-- Scott Johnson (scojo@yahoo.com), March 15, 1999.

Scott -

Glad to hear that Mr. Dunn is kind to widows and orphans. Now he needs to print a big ol' correction to his article, since it now seems clear that this paragraph:

"Edward Yardeni, chief economist for the investment banking firm Deutsche Bank Securities Inc. and one of the most persistent drumbeaters on the Y2K issue, recently revised his estimate for a long global recession due to the glitch, from a 70% chance to 45%..."

and this statement:

"Yardeni, of Deutsche Bank Securities, said that even though he has reduced his probability of a global recession..."

are incorrect and misleading. Yardeni said nothing of the kind.

That article is pretty darn sloppy. Dunn opens and closes with de Jager, yet points to "a growing cadre of Y2K experts" who are toning down their predictions. OK, name three. I can name three who have not: Yardeni and Yourdon (both of whom are heavily referenced in the article), plus Capers Jones. I'm sure other forum members could tack on a whole slew of names.

As with the Yardeni "quotes", Mr. Dunn's headline is incorrect and misleading. As Senator Bennett commented during the testimony on the International situation, experience has been that the more you look into Y2K, the less confident you become.

-- Mac (sneak@lurk.com), March 15, 1999.