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Date Problems May Plague 21st Century Software
A software article in this month's IEEE Spectrum discusses "date and data" problems that will occur over the next 50 years. According to the Spectrum, the notorious year 2000 isn't only dangerous to software applications today. Over the next 50 years, at least 100 million applications around the world will need modification because of dates or date-like data. The total cost of the remedies could top US $5 trillion.
The problems include the dates at which the pricing of commodities in much of Europe switches to the euro currency; the global positioning system's date rollover; the date on which Unix and C libraries roll over; leap year 2000, and some date-like patterns used for data purposes. Early in the next century, the United States will run out of new 9-digit social security numbers and 10-digit telephone numbers. Even software currently marketed by Microsoft can cause problems in 20-40 years - sooner if users revert to two-digit dates.
According to the article the Euro introduction on January 1, 1999 will cause immediate problems with present (e.g., Windows 95 and much proprietary financial, data analysis, data mining, and data warehousing ) software. For example, the new symbol for the euro currency cannot be printed out on many computer screens because the character set is not included in the computer's software. (The symbol for the euro will be a plain bold x .) Euro currency conversion will take several years. Financial software must be modified or rewritten to handle financial products that abruptly start being priced in the euro rather than a country's currency, or in the two currencies at once. Financial analysis software applications that analyze long-range trends covering periods before and after the euro introduction will have to include complex currency conversin algorithms. More complicated still, the introduction of the euro will vary by country, industry, and commodity at seemingly random intervals between 1999 and 2002.
Other serious date problems may occur when date counters "roll over" in operating systems like UNIX and the Global Positioning System. And thousands of computer systems that make it through January 2000 may crash in February 2000 because software wasn't programmed for leap year 2000.
The article's author, Capers Jones, feels that even recent efforts by the International Standards Organization (ISO) - ISO standard 8601:1988(E) - is insufficient because the standard fails to accommodate various date systems used around the world by various types of organizations. He feels that a universal date format should be at least 24 digits long. He also believes that an international symposium should be connvened to address the root causes of date problems. The article appears on page 47.
Long-Term Capital Management - Little Investor Data
According to a front page article in the September 25th issue of The Wall Street Journal, the collapse of the hedge fund Long-Term Capital Management arose from lack of controls in a business that shrouds itself in secrecy. The last minute rescue of Long-Term Capital on Wednesday has begun to shed light on a vast and complex network of loans, deals, and relationships among hedge funds and large financial institutions.
According to the Journal, much of Long-Term Capital's success in previous years apparently was the result of its sophisticated models, devised by its Nobel laureate partners, to predict how various markets would act and react in essentially normal times. The models appear to have failed to take into account what might happen in the event of a world-wide financial crisis that caused unusual reactions in markets. Such a crisis recently occurred in mid-August when Russia devalued its ruble and defaulted on some of its debt. Those actions touched off a world-wide flight to U.S. Treasury bonds and the sale of riskier debt instruments. These moves were contrary to Long-Term capital's leveraged bets and set up conditions that quickly pared the value of its assets. [Editor's note: There are many similar financial models that assume stable markets - oil and natural gas price models, for example.]
A major problem with Long-Term Capital was that the firm was secretive with its investments. Moreover, Long-Term Capital had no oversight except by those who lent the firm money. And U.S. Treasury Secretary Robert Rubin and others urged bankers and banking regulators to pay more attention to the risks and complexities of derivatives and other hybrid investments. According to the Journal, Long-Term Capital was bailed out because there were very large exposures in securities at stake. The bailout averted a possible bankruptcy filing that could have dumped huge amounts of securities onto the markets. Most bankers were aware that Long-Term Capital's market exposure was large enough and cut across enough varied markets that if the fund were forced into sudden liquidation, markets around the world would be disrupted yet again. Many other articles about Long-Term Capital have appeared in the Journal and other newspapers this week. Contributors to the article included Journal staffers Mitchell Pacelle and Anita Raghavan.
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