Economist Yardeni Concedes Y2K-Related Recession Unlikely

Deutsche Bank Alex Brown securities economist Edward Yardeni, who had received considerable attention for his controversial warnings about potential economic troubles from the Y2K computer bug, said Jan. 3 a recession looks unlikely if the Y2K transition continues to proceed in an orderly fashion. If the next few days remain relatively smooth, "you'll be able to read my lips; I'll say I was wrong," Yardeni said in a telephone conference call. While cautioning that "we're not of the woods yet," Yardeni acknowledged that the Y2K transition so far has been "fabulous." "I'm very well impressed with how well things have gone, particularly in the overseas economies." For the most part, fears of massive computer breakdowns from Y2K have not occurred, with most glitches thus far being reported as minor. Yardeni had raised alarm bells about potential economic problems from the 2000 computer bug several years ago. Yardeni said he was concerned about disruptions to "global supply chain," such as telecommunications systems, from Y2K-related problems. As recently as mid-December, Yardeni was predicting a steep drop in real economic growth in the first half of this year.