<!doctype html public "-//w3c//dtd html 4.0 transitional//en"> <html> Ed Yardeni wrote: <blockquote TYPE=CITE>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. 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