IT was a few hours into the new year when I realised that the electricity hadn't failed, that the city's traffic lights hadn't all gone red and that I could still get money out of the ATM machine. Which went to prove that the technological Armageddon hadn't come to pass and that, if nothing else, some of the money that had been thrown at Y2K probably achieved something. Mind you, nothing went wrong on the smaller end of things either. I'd been intrigued by the predictions that some household equipment - such as toasters - might not work after January 1st. Well, my ancient toaster (which does, nevertheless boast that it's electronic) managed to incinerate some toast as per normal on Saturday morning, proving that the entire techno-trauma was as overhyped as only the media can overhype anything.
However, I did run into technological glitches the other side of the millennium, on December 24th to be exact. In fact, on the runway of Las Palmas airport on December 24th.
The man and I had decided that, since our holidays had been messed up a couple of times last year, we'd take a quick prefestivities break to the sun. And it was fantastic. Warm, balmy and miles away from the shopping-fest that was going on back home. Our scheduled arrival time back in Dublin was around 7.30 p.m. in the evening which, we fondly imagined, might give us the time for a quick drink in a local hostelry before I defrosted the turkey breast that was languishing in the freezer. (As a side issue, this was bought in Marks & Spencers. Its food is still a million times better than its clothes. I bought three pairs of tights too and none of them saw the new year unscathed - M&S is now off the hosiery list again. I don't know if it's enough to help the abysmal profit numbers, I suspect not - even if it's true that Wal-Mart in Europe has been approached by banks trying to arrange an M&S takeover - but the food hall is still great for people who are catering for two. . .)
I've noticed in the last few years that charter flights have become much more punctual and so I was pleased, but not astonished, when we were boarded for home exactly on time. The captain brought the plane to the end of the runway and we waited. And waited. And waited some more until he told us that we were waiting until he sorted out a problem. I have to say that I don't like hearing about problems when I'm just about to take to the air. I like to think of flying as problem-free even though I know that it can't possibly be. Anyway, after a quarter of an hour or so he kindly informed us that the problem was with the computer. A little early, most of us thought, for Y2K to pounce.
Our plane was an Airbus 330 which, I'm reliably informed, has five computers. I was a little perturbed to think that whatever the problem was, none of the five could kick in and prevent it. The captain (who presumably has to have an IT qualification these days) then told us that it was something to do with the steering and that an engineer was working on it but he was stumped at present. Engineer sounds like someone with a spanner and a screwdriver. I know I sometimes feel like hitting my computer with a spanner, but I'm not sure it's the recommended approach.
It took an hour, but eventually the steering was fixed and we bounced our way over the European storms and back to Dublin. As soon as we were stopped, the cabin was alive to the sound of mobile phones ringing as people (myself included) informed relatives and friends that we were still on the plane but should be home soon - based on such empirical evidence, I firmly believe the telecom sector will be a good one this year.
And when we got home we faced what we fondly imagined was another technical problem. The heating wasn't working. Think Siberia in a cold snap and you get a good idea of how warm the house was. We pressed buttons all over the place but finally had to admit defeat. Two shivering days later we discovered that the pump had seized up, a situation that can't be rectified until the end of this week since all pump distributors are on holidays. . .
There are times when going back to work has an appeal all of its own. Since the markets no longer have the fear of global computer failures to worry about, many people who virtually stopped trading for the third quarter have to get themselves back into gear again. A lot of traders worked on the premise that performance wouldn't be great in the third quarter anyway, since they expected that no one would trade very much. But that wasn't really the case as long-term fund managers were able to pick up securities at cheaper levels and they consistently supported the market. However, things opened up on a shaky note this week. Both bonds and equities were down at the start - one of the reasons mooted for a horrible performance by the US long bond was the fact that there weren't any Y2K problems . . . apparently the call was that people who had to hold safe securities over the year end now wanted to sell them. They weren't selling them to invest in Dow Jones equities, though, since that had a trembling start to the year too.
The reason is more likely to include the spectre of higher interest rates which are pretty much inevitable. The Fed has a meeting at the beginning of February and most people are betting on a hike then. With the long bond yield now nearer to 7 per cent than 6 per cent, it looks like multiple hikes are being anticipated. But if inflation stays low (which is the Fed's objective) then those yields will look very, very attractive.
The US performance was reflected in Europe as bond yields rose here as well. It's all relative, however, and even higher rates in Europe still leave them at low levels. With Y2K out of the way companies can concentrate on using cash-flow for increased performance instead of upgrading software. Bad news for the techsperts who have made so much money over the past year but good news for everyone else!
This year won't be any different to any other, despite millennium hype. It'll still be ruled by fear and greed. Nice to know that things don't really change.
Sheila O'Flanagan is a fixedincome specialist at NCB Stockbrokers
