A Window on Westmount Montréal, Ville Marie

Who Was Who on Y2k ...

On Wednesday evening June 24 at the Nicholsons', discussion focused mainly on the interdependence of human beings and computer technology, how life has been changed by the silicon chip, how relationships with other humans have changed because of this element, relatively recently introduced into the lives of so many people.
This reflection was prompted, though not directed, by the inexorable approach of January 1, 2000 and the resulting fear of Y2K, the problems of electronic systems built at breathtaking speed over the last quarter century or so and the realization that if computers were to suddenly stop working, it would be impossible for modern Man to return to pre-1960 era of pen, pencil and mechanical adding machines.


      westweb
	|------David T. Nicholson
			|-------Diana T. Nicholson

Wednesday Night #851 Y2k

As advertised, Christopher Halsted and his colleagues Vince Cascone and George Nasello from the Financial Management Group in the Toronto office of Deloitte & Touche Consulting Group were among the guests. The three are currently with a project team working at Nortel, introducing an enterprise-wide system. To accomplish this requires identification of the best practices, streamlining of systems, standardizing software so that fewer people are needed to cover all aspects of transactions.

An added bonus for the discussion was the presence of Dr. Monica Sanchez, Professor of Linguistics at Brock University, Gaetan Grenier, President of EVANOVA Financial Corporation and his wife Dr. Marcella Grenier and Rus Logush, builder of web sites. and has devoted more than twenty years to the study of astrology. His main interest has been in developing astrology computer programs with innovative and alternative perspectives. [Rus put a lot of work good work] Astroscan was intended to fill the void in the astrological software market. If astrology is to grow into an advanced and effective art of behavioral analysis and prognostication, then the best software must be easily accessible. [great for stock brokers DTN]

Wednesday Night # 851

photo of Dr. Carl Beigie Carl Beigie

The host prodded "is Y2K really a problem?" The reaction to Y2K has been mixed. Some organizations have just ignored the problem hoping that they will be spared, others have merely changed their software, while still others have painstakingly and expensively scanned every line of program in their system, looking for date sensitive code. The International Aviation Transport Association (IATA) has assured that all airlines will be Y2K compliant, that their systems have been tested and is now working to do the same with 120 major international airports and navigation systems around the world. Nonetheless, KLM has announced that its planes will not fly on January 1, 2000.

The problem is that assuring 100% compliance is no more possible than 100% assurance that any program is free of bugs. Networks by definition are interdependent. Hard-coded communications devices may have a secondary role to play but be the flea that brings down the elephant. One solution proposed is to change the dates on the servers and see what happens.

Chris Halsted

George Nasello

Steven Young

Vince Cascone

Michael Judson

Contemplation of the possibility remote or not, of January 1, 2000 electronic gridlock, led to debate on the effects of the computer on humans. Several experts suggested that technology causes us to become isolative, that a relationship with one's computer has become a substitute for a relationship with friends, family, or - more important for society - one's community. Tday there are individuals who literally live in "cyber boxes" and their alienation from society is starting to make demands on therapists and other professionals. Sitting at home having one's own needs taken care of from banking to grocery shopping, causes us to forget the needs of our fellow man. Over the years, the relationship between an individual and the corner grocer or hardware merchant or banker or physician, has evolved into a relationship between Man and machine. The paradox appears to be that the farther we move into freedom of thought, the more we give up something of our individual freedom. The other side of the coin was pointed out, namely that the same arguments had been made by those decrying the introduction of television and even of books. When something is new, people tend to attribute more importance to it than warranted. It was suggested that there might be a correlation between technology and an increased interest in gardening, but it was pointed out that the a more likely correlation might be an inverse relationship between the level of human and plant procreation. The debate on this aspect of technology ended with no resolution.

The conversation turned to the current job market for young men and women trained in computer science. The question arose as to whether this demand would fall dramatically when the problems associated with the millennium bug are ironed out as they inevitably will be. It was concluded that the demand so exceeds the supply and is increasing so rapidly, that there is very little likelihood that people competent in this field will have difficulty finding employment in the foreseeable future. This is the first occasion in which it is the scientists who have benefited most from the fruits of their labour rather than others.

Two types of experts have emerged in this field, namely those who understand how the technology works and those who understand intuitively, how to use the technology. The latter cannot build the tools, but excel when given the tools. Both types are required. As might be expected, professors among us feel strongly that University education is indispensable to understanding the science of computers. In response, one guest put forward the suggestion that some people think that education muzzles creativity. Perhaps as pertinent is the hierarchical arrangement of firms designing and producing goods and services. Although corporate structures are flattening somewhat, there needs to be a complete disappearance of the current generation of top managment for organizations to be able to fully benefit from the two types of experts.

The Cassandra Project has a wealth of information and links about year-2000 issues.

You can also try: the Y2K News Network, PC Magazine's Y2K Resource Center and Apple and the Year 2000.

Read about our Dollad

Inflation is driven by greed; as there will always be greed, there will always be inflationary tendencies. Inflation is here, but is not reflected in the consumer price index. The price of some goods and services, such as the price of airline tickets, has risen quietly and constantly. There is a political price to be paid for raising interest rates and central bankers are tempted not to take this step until it is too late. Therefore the debate between Greenspan and Rubin, Greenspan is concerned about the inflation on the horizon.

Ursula Mueller

On India, Pakistan and the bomb, the view was expressed that it is divisive when chauvinism prevails over the best economic interests of the citizens. However, no nation or group of nations should prevent a country from going to war unless it (they) are prepared to defend that country against its enemies. The United States was not prepared to do that, a point which was eloquently raised by the Indian High Commissioner, His Excellency Rajanikanta Verma,in his speech to the Press Club on Monday.

Following these discussions and a brief one on the recent court ruling favouring Microsoft, the evening ended with the feeling among guests that it would be difficult to top.

Read about the

Reported by Herb Bercovitz and Michael Judson Edited by Diana Thébaud Nicholson
Diana Thébaud Nicholson Editor We pay tribute to our devoted scribes whose meticulous notes enable us to publish summaries of Wednesday events. Herb Bercovitz and Michael Judson are an indispensable part of the organisation and we thank them!

Some other friends who were with us:-

Thanks to Prof. Gerald Ratzer
McGill CS we have Michael Head's story Cable vs Satelite

Y2K problems will dampen the global economy by 1%-2% during 1999. This is truly an astounding figure, and one that will affect the markets as well. For it will further dampen expectations by the money management community, prompting readjustments in portfolios. Something almost unheard of during the past few years will then happen: with money managers seeking places to hide, there will be calls for higher cash and bond levels…. In the final analysis, the cumulative result of these changes may well produce violent price swings in the months ahead. Graham Fowler founder, president imageade

Graham Fowler founder, president imageade

Graham Fowler Imageade

Robert Stewart - - - - - Gaetan G. Grenier

Must see ../westweb/ answer to the BUG

Wednesday, #849 June 10th, was devoted principally to the Cdn Dollar and technology issues - Chris Halsted returned and brought with him a senior colleague, Vince Cascone from Deloitte; they are currently working on a contract for Nortel. Chris' colleague is a Y2K expert.

Tuesday, June 16, 1998 By Lawrence Surtees Nortel cuts $9-billion deal... stock plummeted $13.60 to close at $79.50 in heavy trading on the TSE & BCE fell $2.95

Gates still tops billionaire list
Monday, June 22, 1998 NEW YORK -- Microsoft Corp. chairman Bill Gates topped Forbes magazine's rankings of the world's richest working billionaires for the fourth consecutive year, with his net worth up 40 per cent from a year earlier, at $51-billion (U.S.).

24 June 98 Microsoft won an early victory in its antitrust fight with the U.S. Justice Department as a federal appeals panel ruled that the company may integrate its Windows and Internet software. Microsoft's stock rose $4.9375, or 5.2%, to a new high of $100.75 on Nasdaq.

Microsoft is urging some companies to upgrade directly to Windows NT, positioning Windows 98 as an interim system for home users.

Windows 98 launch finds 49% say no and will wait!

MISSISSAUGA -- Microsoft Corp.'s launch of its new Windows 98 operating system software this Thursday is still the landmark technology event of the year -- even though it doesn't have a theme song. As with the introduction of Windows 95 three years ago -- to the beat of the Rolling Stones' Start Me Up -- Microsoft's new product will be the centre of attention in the technology industry. But not for any reason that the Redmond, Wash., software giant would want.

Another loss is the outlook for Corel, analysts say. The struggling software maker releases its second-quarter results Wednesday. urqTrimark Financial shareholders will be asked at Wednesday's annual meeting to approve a two-for-one stock split.

Monday 22 June 1998 A loon and summer's siren song Alarms and phones and satellite dishes keep peace and tranquility at bay by ASHOK CHANDWANI

#846 Computer night May 20th. was a good evening

Merger could create home of the future But AT&T's $32 billion purchase of cable giant Tele-Communications Inc., announced Wednesday, probably marks a turning point. Over the next 12 to 18 months, the companies plan to drive a boatload of new services into the one-third of U.S. homes touched by the cable lines of TCI and affiliates.

Thursday, June 25, 1998 AT&T deal ignites cable stocks Rogers, Shaw, Vidéotron hit highs By Mark Evans AT&T Corp.'s plan to buy cable giant Tele-Communications Inc. for $32-billion (U.S.) ignited Canadian cable stocks yesterday as investors gambled on whether the sector is rife with takeover candidates. The charge was led by Toronto-based Rogers Communications Inc. , which owns Canada's largest cable TV company, Rogers Cablesystems. Rogers' class B stock jumped $2.40 (Canadian) to $12.95 on the Toronto Stock Exchange, its highest price in two years. Shaw $2.15 to $21 and Cogeco Cable Inc. was up 75 cents to $15.15. Shaw and Vidéotron joined Rogers in hitting 52-week highs

Thursday, June 25, 1998 AT&T deal revives U.S. cable sector By Eric Reguly IN one blockbuster move, mighty AT&T has resurrected the U.S. cable industry. Ma Bell's purchase of Tele-Communications Inc. (TCI), the world's second-largest cable company, for $32-billion (U.S.) sent cable shares soaring on both sides of the border. While the rise in the United States is justified, the parallel increase among the Canadian cable stocks seems overdone.

Tuesday, June 16, 1998 Dollar plunges to new low 67.85 cents (U.S.) as stock market turmoil sparks move to U.S. bonds
Read about our Dollad

Saturday, June 6, 1998 The push to raise interest rates for all the wrong reasons By William Thorsell ... ACCORDING to the World Economic Forum (WEF), the greatest threat to the world economy arises from errant interest rates. [in Canada better to reduce income tax than to raise rates... tax freed money gets spent ... increased interest cost cuts spending DTN]
December 31, 1997 Low dollar worries exporters Unican president Peter Blaikie "I would prefer to see the dollar above 70 cents." if it goes too low it raises the threat of interest rate hikes by the Bank of Canada to defend the currency and increases the cost of parts the company imports such as electronic components, Blaikie said. ... at 69.81 after hitting a 12-year low of 69.46 yesterday (all time low 69.17)
Monday June 22
We began this week's piece by repeating the final point of our thoughts of a week ago. That was: It's time for selective buying. Stocks of the fallen angel and value variety deserve to be part of a selective buying process. A time for selective buying does not imply a turn-on-a-dime reversal in market direction. A testing process in the zone of TSE 7000-7300 would not be unusual. The April 22 high of 7822 could be the high for the year. A return to that level could take some time.
In terms of individual names, three high tech favourites - Nortel, Geac, and Leitch - have all been hit by over 20%. All remain Buy rated and these prices represent attractive entry points in our opinion.
Wednesday, June 17, 1998 Streetwise Summer haircuts on bought deals The stock market has taken ill -- its tone is poor and not expected to improve. This malaise means it is increasingly difficult to trade large blocks of shares. Yet moving stock is precisely what a number of investment dealers need to do.

IBM - John Jones 4 June 98

- IBM $117.18 1/M Target: $150.00
- John reiterates his buy rating on IBM. He points to yesterday's announcement of new storage products as further proof that IBM's business units are firing on all cylinders
- new storage products will add $2 billion to revenues in 1998
- EPS EST: 1998E $6.85; 1999E $8.00

The Market and the Millenium Bug (Y2K)

Martin Barnes Bank Credit Analyst

Ed Yardeni is predicting a recession because of the Y2K problem, but there are experts on both sides of this issue, some whom dismiss the seriousness of the effect. Who to believe? Bank Credit Analyst has prepared an analysis as a Special Feature in the August issue. "Hoax or Catastrophr" [This is the best collection of the facts. DTN]

The assertion that there is a wave of productivity growth as everyone up-grades is countered by the statement that averting damage does not improve productivity. Y2K issues are serious within certain organisations, accounting systems, for instance, if there is date sensitive activity.

Northern Telecom's high-speed modem

Will this increase productivity? Without a doubt. Speed makes enormous difference to anyone who is researching or working on the Internet. A receent article pointed out that it could take 23 minutes to download a 3 ½ minute video clip. For a lot more see ./westweb/Nortel

Chart NTL T may last week click for NT in NewYork

Microsoft and Mergers

Should the company be broken up? Some feel that Microsoft's corporate strategy is subversive, often innovation is achieved by buying up the competition and/or re-engineering competitive products. Legal agreements are frequently "devious".

If Microsoft were allowed to swallow up the competition innovation would suffer and the consumer would be ill-served.

Remember that anti-trust laws were also introduced to keep the stock market honest. There should be new scrutiny of some of the anti-trust laws.

In Canada we have "regulated free enterprise"; in an oligarchy that becomes an oxymoron. By the same token, in regulated industries like aviation which have now been privatized it is more difficult to address issues of common or public concern (Y2K for example) because there is no central authority to develop standards or serve as a clearing house for information, new technology.

Nortel (NTL US$54, C$79.50) - CHERYL NESBITT 6/16/98

RECOMMENDATION: 1-STRONG BUY 1-YR TARGET: $100.00 (was $120 target)
NTL announced its plan to merge with Bay Networks in an all-stock transaction expected to close by the end of Q3 (SEPT. 30). Terms are 0.60 of a NTL share (a fixed ratio) for every BAY share (237mm f.d.) or about 134mm NTL shares; at the current BAY share price ($30.75) that translates into a US$7.3b purchase price.

Given that, we are probably six months away from knowing the extent of the writeoffs and nine to 12 months away from having a good idea of how well NTL is executing the integration of BAY. Nevertheless, we applaud Nortel's proactive stance to reach critical mass in IP networking in this fast-paced sector.

At Friday's close, Nortel was trading at 31.8x forward 12 month EPS of $2; today it is trading at 27x. Even using this multiple on 1999 estimated EPS of $2.50 suggests a target price of US$67.50 (approximately C$100 at today's FX).

There will also be management changes. John Roth, currently president and CEO of Nortel, remains CEO, while David House, chairman, president and CEO of BAY, becomes president of Nortel. We see this as another example of NTL's commitment to becoming a major participant in the end-to-end IP networking market.

BCE INC (BCE $63.00) - JOHN HENDERSON RECOMMENDATION: 1-STRONG BUY 1-YR TARGET: $76.00 Target cut to reflect Nortel revision from $110.00 to $100.00.

SALOMON SMITH BARNEY MORNING MEETING SUMMARY June 16, 1998

Monetary Pressure Index 1.14 vs. 1.11 last week Alan would continue to focus on some of the large cap Dow type stocks such as AXP, DD, MCD, and GE - as for the bonds they continue to look very good. With a high Put/Call ratio and momentum very strong Alan is looking for an intermediate term target on the long bond of about 5.10%

- June 5 top picks in the group remain MOB and XON
6/19/98
PETRO-CANADA (PCA $22.80) - DOUG MONAGHAN RECOMMENDATION: 1-STRONG BUY 1-YR TARGET: $34.10

Rumors suggesting PCA may be on the acquisition trail - Ranger Oil(RGO) most probable. Stock may be weak depending on price paid in the context of current crude prices. RGO said to have valuable North Sea assets and western Canadian gas properties.

Bank mergers

The issue of the proposed bank mergers is always a controversial subject. Simply put, the Bank of Montreal doesn't have the funds to "grow" the Harris Bank. The issue is not the ability to compete world-wide, the issue is to compete in the U.S. Do see Mr. Paragon on our Banks

One guest suggested that if Bombardier/Canadair had not been allowed to merge, Canada would not be a world player in the aerospace industry. This was not considered to be a relevant example.

At a local level, the real estate outlook is better and better.

Bruce Burnett stated that his company is involved in two large deals to be announced within days.

Friday 12 June 1998 Insurance Exchange building sold our city is on a roll, high-tech, high-value tenants ...Time Equities ... closed a $4-million deal for a 60,000 square-foot office complex ... boasts a measly 5-per-cent vacancy rate, according to Bruce Burnett of Antrev Inc. He is also confident that the new stadium for the Expos will become reality.

by Diana Thébaud Nicholson

Graham Fowler Imageade & ../westweb/ make Web sites

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