> REPORT FROM DAVOS
>
> I arrived at the World Economic Forum in Davos, Switzerland on Friday night. I spent
> the next day attending various panels. Saturday night I was at a cocktail party hosted
> by Bankers Trust. I was discussing the Year 2000 Problem (Y2K) with the CEO of one of
> the largest accounting firms in the world. He believes it is a big problem and that
> most CEOs are too complacent about it. In the middle of our conversation, the lights
> went out in all of Davos for about 15 minutes. The waiters quickly lit candles in the
> room. Later that evening, I ran into a top US Treasury official who told me that he
> thought my Y2K recession forecast was crazy, but he graciously added that he had
> thought my Dow 5000 by '95 and Dow 10000 by 2000 were crazy too.
>
> Sunday morning I presented a "Call for Y2K Leadership" to an informal gathering of
> ministers attending the conference. Just before I spoke, Bill Gates talked very
> briefly about the unprecedented rate of change in his business. He commented on the
> Internet mania in the stock market: "Even people involved can't believe valuations."
> After my short pitch for more leadership, the CEO of one of Mr. Gate's challengers
> said that everyone should buy a computer before yearend because his company might not
> get the components needed to build PCs from Asian suppliers who are "1-3 years behind"
> in getting ready for Y2K! On the way to a luncheon, a key Japanese official told me
> that his government was just starting to think about Y2K contingency plans and was
> unsure what to do.
>
> WHAT'S NEW ON ECONET
>
> Comment: Buy.com is planning to sell books at cost or even at a loss on their site.
> They hope to attract enough traffic so that advertising revenues will generate a net
> profit. Some wags have already suggested setting up sites that give money away to
> attract viewers. This new business model does raise some serious doubts about the
> profit prospects of many Internet sites and current valuations. In Davos, Rep. Ed
> Markey suggested that Brazil.com could raise lots of money since the country is in
> debt and losing money, like most Internet companies. In my humble opinion, the frenzy
> over Internet stocks is a sign of a speculative bubble. The problem is they get much
> bigger than anyone ever expects before they burst.
>
> Subscribers: For more on the Internet mania see "America.com" in my latest GLOBAL
> PORTFOLIO STRATEGY. See why oil prices could fall to $10 a barrel (maybe lower) in
> GLOBAL ECONOMIC BRIEFING.
>
> Public: The latest Y2K REPORTER counters some of the recent positive spins. Vote in
> PEOPLE POLLS. Since Dec. 26, 1999, nearly half of the 4000 voters expect a recession
> next year. Of more than 1100 voters since early this year, 88% plan to take out extra
> cash. Warning: These are not scientific polls.
>
> Movies: How money can easily corrupt us is explored in two very entertaining flicks:
> "Waking Ned Devine" and "A Simple Plan." Other good ones: "Shakespeare In Love" and
> "Life Is Beautiful."
>
> Dr. Ed********************Please forward as appropriate. To unsubscribe, reply with
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> http://www.yardeni.com/public/stvalgl.pdfY2K Home:
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