Ethical Dilemmas in Y2K

Boone, Norman M.
December 1998
Journal of Financial Planning;Dec1998, Vol. 11 Issue 6, p20
Academic Journal
This article focuses on the issue concerning the financial and economic difficulties that could be brought about by the Year 2000 data conversion problem. In this context, the data conversion problem would certainly affect corporate profitability and it will drive the stock market down, perhaps drastically. In more severe scenarios, not only might stock prices fall, it might be impossible to sell assets and get cash for some period of time if the financial system is interrupted. If enough people think profits will be hurt or that liquidity will evaporate, their actions could push the market down lower, even before 2000 arrives. Some investors who are fearful of the problem have announced their intention to sell before 2000 to ensure themselves of liquidity and receipt of a reasonable value. It is at least a possibility that enough people will sell in anticipation of potential problems to drive down stock prices. A falling market, of course, could encourage others to sell who were either expecting to sell, but were waiting to do so until later in 1999 or just worried because the market was going down. This cycle could continue until market prices are much lower, all because some people thought there might be problems and decided to sell, just in case.


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