In February of this year, I criticized the U.S.-based Gartner Group and Moodys for inaccurately portraying the y2k status of Japan. Only the Gartner Group knows for sure if their portrayal was intentional or sloppy research (Moody's blanket statement last year about the poor y2k status of all Japanese banks was based on one telephone call to one person at one bank who happened to speak English). I predicted that the Gartner Group would move Japan up a category in their next international ratings report...which they did.

The utilities in Japan are considered to be lagging the U.S. in remediation by the American press and esteemed members of the U.S. Congress - based upon information from such distinguished and enlightened organizations such as...The Gartner Group and Moodys. I believe this thinking is required in Article 2, Section 4, Paragraph 3, Row 12, Seat 4 of the U.S. Constitution: "All people in all nations (other than the United States of America) shall be considered idiots, morons and buffoons. (See definition of 'idiots, morons and buffoons' under Article 7 - Qualifications for Vice President)."

A Mr. Donald K. Rose (y2k director for Intel) was in Japan two weeks ago and was widely quoted whining about how terrible Japan is and how he couldn't get any y2k information from utilities. (Uhhh...I don't seem to have any problems getting information for companies I provide consulting services for on the y2k status of their Japanese vendors. Could it be that they speak Japanese in Japan? Mr. Rose was whining to press about the Japanese government officials being like a "brick wall" just prior to his meeting with Japanese government officials. Perhaps Mr. Rose should consider running for Vice President?)

The idiots at Tokyo Electric Power Company (completion and testing of generation and control systems: 93% for nuclear and 98% for thermoelectric stations as of May, 1999 - the remaining work is to be completed during regularly-scheduled maintenance shutdowns. The remaining work is maintenance oriented and does not impact generation or control) have a pea-brain idea to try to dispel fear (particularly by future U.S. vice-presidential candidates) that they are unprepared:

They have invited any worried community or company officials to actually come to their facilities (nuclear and nonnuclear) and actually watch their tests and actually see with their own eyes the systems currently operating with the remediated software and watch as they input operating dates beyond 2000.

What are these crazy Japanese thinking? People will only say:

"Assuming this test you're showing me isn't faked... what about the fuel?" They will have to break their hearts by reminding them that Japan (99.8% imported petroleum) is currently purchasing enough petroleum to increase fuel reserves from a 2 week supply to a 6 month supply.

"Yeah...but...has anyone from Mr. Rose's campaign headquarters seen this test?"

-- Anonymous, June 10, 1999

Answers

Good work PNG. Facts....love 'em, but such a rare thing in the Y2k fog... Regards,

-- Anonymous, June 10, 1999

Sorry to burst this silly little factfinding backpatting session with some real facts, but if I hear this "Japanese storage quote" one more time, I'll puke. Guys....listen for a minute, it ain't so. Read my statement below from an earlier post.

"I read in an article recently that the Japanese have stated that they are storing 6 months of crude oil to run in their refineries. Let me put that into perspective for a moment. Their demand is approx. 5.6 million barrels per day, all of which is imported, mostly by VLCC and Suezmax crude ships. To have stockpiled 6 months of supply, they would need to have purchased and stored successfully 1 billion barrels of oil or roughly 500 VLCC's. I can assure you as a crude oil analyst who tracks prices, that this has not occurred. The price spike would have been enormous. Not to mention the impact in the shipping markets. My point here is that there is much silly secondhand information on "storage" plans. Do you know how long it takes to discharge a VLCC? They must have one hell of a "stealth storage plan" to keep the impact of this storage plan from filtering through to the VLCC freight rates.

Now, maybe they're storing some fuel for their electrical plants and maybe not. If so, it'll filter through on the price. I'll let you know when it happens. It ain't happened yet.

And by the way, no one has answered my fact filled post on added capacity. Cmon boys. I dare ya. Why so much added capacity?

-- Anonymous, June 10, 1999

[Rick: okay, okay- I realize I'm a bit OT here- my apologies. -D]

PNG,

You wrote:

>>A Mr. Donald K. Rose (y2k director for Intel) was in Japan two weeks ago and was widely quoted whining about how terrible Japan is and how he couldn't get any y2k information from utilities. (Uhhh...I don't seem to have any problems getting information for companies I provide consulting services for on the y2k status of their Japanese vendors. Could it be that they speak Japanese in Japan? Mr. Rose was whining to press about the Japanese government officials being like a "brick wall" just prior to his meeting with Japanese government officials.

Uhhhhhh... is it also just possible that poor dumb Intel had tried *other* measures to get information *before* the Intel fellow arrived in Japan? Let's remember that Intel sent out Y2K surveys all over the world, and got the worst responses from Japan. I suspect poor dumb Intel had a little to do with getting more than a few key Japanese companies (including manufacturers) jump-started on Y2K.

Also, Japan has demonstrated a remarkable ability to improve its Y2K status - by its *own* standards and agencies (forget Moody's & Gartner). For instance, according to this AP story from early February, Japan's Financial Supervisory Agency,

>>said that as of December, nearly half of the top 19 Japanese banks had completed needed updates for just a quarter of their main computer systems. Only two banks had updated more than 75 percent of their systems.

The experience of banks *worldwide* has been that Y2K work has *repeatedly* been longer and harder than originally believed. And if the Japanese FSA was right in the first place, Japan's banks were in a whale of a lot of trouble. Nonetheless, just three months later, Japan's Ministry of Foreign Affairs was saying the banking system was jes' fine on Y2K, thank you. Excuse me? *How*?? The *US* banks, which started *years* ago, *still* aren't done. (I read a story referring to Japan's banking progress on your site a while back, but I see you're doing some reworking at the moment, and it's no longer there).

Let's recall that Japan for the past umpteen years has been proclaiming the "economy has bottomed out," that debt problems weren't as bad as believed, etc. Its crediblity on the world economic stage has not been high for a long time. Reporting that banks are a horrifying Y2K mess one month, and then saying "Ha ha- just kidding!" a mere three months later hardly improves that credibility. And if they can't tell the truth about their economy, why should the rest of the world take their word on Y2K seriously? Even Japanese analysts in Tokyo admit they don't know if they can trust industry self-reporting (not dissimilar to the US).

One final point: remember that ratings services like Moody's usually get things wrong on the *upside* - ie, they're too *optimistic*, not pessimistic.

Don't get me wrong: it's probably a safe bet you & I agree a great deal more than we disagree - but a few things remain a bit out of kilter for moi... :)

-- Anonymous, June 11, 1999

Hi Drew. I don't have much time and this may sound curt, but it isn't mean't to be...

The fact remains that Tokyo Electric Power Company is as prepared as any electric utility in the world to generate and distribute power beyond 2000. There is no doubt that TEPCO is still racing the calendar to remediate critical internal management systems software.

The fact also remains that Moodys changed it's position on the status of Japanese banks after further study. And so did Gartner.

I only wrote about Donald K. Rose...not Intel in general. I'm sure he's a fine y2k director, but the fact remains that his approach to getting information was sophomoric. Japan business culture is excrutiatingly difficult and sometimes just plain ridiculous, even for a seven-year veteran like me. If you want to get anything done, there is no choice but to do it their way.

First, they tried to work through the U.S. electronics manfacturers association - a group of U.S. salesman. Then they blasted Japan in general before meeting with MITI - the government organization whose sole purpose is to promote Japanese industrial development worldwide and build a consortium of companies to challenge companies like Intel. Intel has no manufacturing facilities here that hire Japanese workers, support their families and local businesses etc. (or help them pay taxes...). I won't go on and on because you understand.

Imagine a group of Japanese businessmen (with no factories in the U.S.) coming to America, blasting the U.S in general in the press as an impossible place to get clear y2k information before meeting with the Commerce Department, demanding (in Japanese) more clear information on the status of U.S. y2k preparation of utilities that service their customers... And why didn't they fill out the forms we sent them (in Japanese)? Please.

Anyway, some companies and some systems will be working fine and some won't. Same for the banks. Some will be OK and some won't. It's the same everywhere. Some reported information is accurate and some isn't (your organization inaccurately reported earlier in the year that Japan was no longer the world's top creditor nation...it still is).

The end result is that whatever anyone believes about any y2k status doesn't matter much anymore, unless you're a reporter. It's simply too late to change the path of any medium or large organization. That's why I'm cleaning out y2k stuff from my site and don't intend to post anything more to places like this. I'm rolling my clock ahead to beyond 2000. You know my address...

-- Anonymous, June 11, 1999

[Okay, okay, Rick- after this, no more OT stuff- I'll be a good boy! Really! Honest! :) ]

Peter,

Sorry for the delay in replying- my schedule just prevents me from keeping up with forums (fora?) as much as I might otherwise. Anyway...

I don't dispute what you say about Tokyo Power; I don't know enough about it and wouldn't be qualified to say anyway. As far as Moody's & Gartner changing their evaluation, no argument from me on that point either. I'm simply saying that the Japanese government *itself* said the nation's banks were a flat-out Y2K mess in December of 98; if they're as bad as the FSA said, they didn't get fixed in a few months. It's just not possible.

Insofar as the Intel/Japan situation- it does seem to me that Intel has managed to work in Japan for years and years now, so they should know *something* about how to get the job done.

And two other points: one, I doubt CBN ever reported Japan was no longer the world's leading creditor nation. If such a story ever came from us, it would almost certainly have been something like an AP story which we simply picked up.

Two, I agree completely- for anyone of any size, the die is cast. Of course, it matters to more than reporters. It matters to ordinary people, business managers, financial managers, etc etc etc...

-- Anonymous, June 15, 1999