Table On-Topic Summary - 12-Oct-2002
A compilation of this board's financial/economic posts From 43531 to 43568

Post  43531  by  lkorrow       OT: Tampa, your Israel posts take me back to Jr. H

Post  43532  by  pmcw       Reply
Electoral College, the constitutional system for the ELECTION of the PRESIDENT and VICE PRESIDENT OF THE UNITED STATES. It is the collective name for a group of electors, nominated by political parties within the states and popularly elected, who meet to vote for those two offices.

Each party within a state selects a slate of electors numerically equal to the state's congressional delegation--representatives plus senators. The electors normally pledge to vote for the nominees of their party, but they are not constitutionally required to do so. When the American people vote for president and vice president, they are actually voting for slates of electors pledged to their candidates. Because the electors usually are chosen at large, the electoral vote of each state is cast as a unit, and the victorious presidential and vice presidential nominees in each state win the state's entire electoral vote. The candidates receiving a majority of the total electoral vote in the United States are elected.

The electoral college system was established in Article II, section I, of the U. S. CONSTITUTION and has been modified mainly by the 12th Amendment. Numerous plans have been proposed for eliminating or altering the electoral college, including direct election of the president and vice president by popular vote.

How the College Operates

The Constitution leaves the selection of electors to the state legislatures, stipulating only that their number equal that of the congressional delegation and that officers of the federal government are not eligible. Candidates for elector usually are nominated by party conventions, in PRIMARY elections, or by party organizations.

The electors, popularly elected on election day, meet in their respective state capitals on the first Monday after the second Wednesday in December in presidential election years. They vote by BALLOT separately for president and vice president. To discourage having a president and vice president from the same state, at least one of the candidates for whom they vote must not be a resident of the electors' own state. Certified lists of votes cast for the two offices are transmitted to the president of the U. S. Senate--since 1950 through the General Services Administration. On the following January 6 the president of the Senate, presiding at a joint session of CONGRESS, opens the certificates, and the votes are counted by tellers. The election is decided by a majority of the total electoral college vote.

In the absence of a majority of electoral votes for president, the HOUSE OF REPRESENTATIVES proceeds quickly to elect by ballot from the three candidates standing highest in electoral votes. Each state has only one vote, cast as a majority of its representatives determines, and a majority of all the states is necessary for election. For vice president, if a majority is lacking in the electoral college, the Senate elects from the two highest candidates. A majority vote is necessary for election.

Historical Development

The framers of the Constitution regarded the electoral college as part of a procedure for electing the president by the people, at least indirectly. It seemed probable to the framers that the system of electors voting by ballot in the states would ordinarily serve also as a nominating device, with the final election frequently left to the House.

Before the adoption of the 12th Amendment in 1804, the electors voted for two persons without distinguishing between a vote for president and vice president. The highest number of votes, if a majority, elected a president. If two persons were tied for first place, the House, voting by states, chose between them. If there was no majority, the House was required to choose among the five highest. After the choice of a president, the highest remaining electoral vote determined the vice president, the Senate being authorized to make a selection in case of a tie.

This unworkable system was altered by the 12th Amendment because of defects demonstrated in the election of 1800, when Thomas JEFFERSON and Aaron BURR, nominees of the Democratic Republican party, each received a majority, with exactly the same electoral vote (73). Despite Jefferson's designation as the party's presidential candidate, it was not until the 36th ballot in the House that Federalist party opposition was overcome and Jefferson was chosen over Burr.

In the early years of the electoral college system, several state legislatures chose electors without a popular vote. After 1828 only South Carolina continued this practice, abandoning it after the Civil War. Electors were chosen by the legislature in Florida in 1868 and in Colorado in 1876.

Before 1828 a number of states permitted voter choice of electors by districts. Michigan utilized this method for the election of 1892. Maine, since 1969, and Nebraska, since 1988, have reintroduced variations of this system, but most states now give all their electoral votes to the candidate with a plurality of the popular vote.

When the names of electors are chosen individually by the voters, the electoral vote of the state may be split, as in 1916 when West Virginia gave seven votes to Charles Evans Hughes and one to Woodrow WILSON. Many states, however, utilize the presidential short ballot, so that the voter makes only one choice for all electors pledged to a given presidential candidate.

The 23d Amendment, adopted in 1961, which enfranchised residents of the District of Columbia for presidential elections, provided that the District choose electors equal to the number it would be entitled to if it were a state, but not more than the least populous state.

Weaknesses of the System

The electoral college system generally gives all of a state's electoral votes to the winner in that state, no matter how slim the margin. Thus it has happened that candidates have been elected even though they received fewer popular votes than their opponents. Both Rutherford B. HAYES, in 1876, and Benjamin HARRISON, in 1888, were elected in this manner. In the case of Hayes, a special electoral commission was called in 1877 to decide the contested returns.

John Quincy ADAMS also received fewer popular votes than his opponent, Andrew JACKSON, in the election of 1824, but his election was decided by the HOUSE OF REPRESENTATIVES because Jackson failed to win a majority of electoral college votes. On several occasions the popular vote pluralities of the electoral college victors have been razor thin or even questionable. One instance was the election of John F. KENNEDY over Richard M. NIXON in 1960.

The feature of the electoral college most prone to attack is the requirement that the election go into the House of Representatives to determine the president and into the SENATE to determine the vice president if the electoral college fails to reach a majority. There might be a paralyzing delay in determining the victors, and the president-elect and vice president-elect could be members of opposing political parties.

The House was called upon to elect a president in the cases of Jefferson and John Quincy Adams, and the Senate chose Richard M. JOHNSON as vice president after the election of 1836. The possibility of this happening again remains very much alive. Should a third-party candidate carry enough states to prevent an electoral vote majority for any candidate, the House, voting by state delegation, might be prevented from reaching an absolute majority.

Pledged electors generally have been regarded as legally free to cast their votes as they choose, and there have been cases of defection from pledged positions. No such deviation has had a clear effect on an election result, but the possibility raises an additional objection to the electoral college. In 1820 a New Hampshire elector voted for John Quincy Adams instead of James MONROE; in 1956 an Alabama elector voted for a circuit judge instead of Adlai E. Stevenson; in 1960 an Oklahoma elector pledged to Richard Nixon voted instead for Harry F. Byrd; in 1968 a North Carolina elector defected from Nixon to George C. Wallace; and in 1988 a West Virginia elector voted for Lloyd M. Bentsen, Jr. instead of Michael S. Dukakis.

Proposed Changes

Major proposals debated for change in the electoral college have been: (1) substitution of direct popular vote for the president; (2) choice of electors by districts; (3) elimination of electors as individuals, but retention of the electoral college principle, perhaps with an arrangement to distribute a state's votes in proportion to voter support of candidates. Many fear that any change would threaten the two-party system.

The appeal of a popular election is checked by the practical difficulty of achieving it by constitutional amendment. Congressmen and state legislators from small states usually favor retention of the electoral college, reasoning that the college, which includes two votes for each state's two senators, tends to increase the relative weight of the small states.

The district proposal is based on recognition of geographical divisions within a state. It would also reduce the political dominance of the large industrial states by splitting their electoral votes between the candidates. This proposal has been objected to, however, as a crude substitute for more accurate apportionment.

Distribution of electoral votes in proportion to voter support of candidates has occasioned the sharpest controversy. It would eliminate many present inequities of the all-or-none allocation of at-large electoral votes, but it might weaken the two-party system. Candidates of minor parties having no chance to win a state's votes under the all-or-nothing principle might enter the race to win fractions of the apportioned vote.

--Franklin L. Burdette
Director, Bureau of Governmental Research, University of Maryland

For Further Reading

Durbin, Thomas, ed., Nomination and Election of the President and Vice-President of the United States (USGPO 1988)

Post  43533  by  pmcw       Reply
The framer’s intent of setting up the American government will never be known for sure, but it is gathered that they preferred a republic over a democracy. In the constitutional convention the drafters had to decide how much power they would entrust with the people of the United States, and how much should be controlled by representatives. They chose to have Congress make the laws, and congress would be selected directly by the people. But another branch of government, the executive branch, needed a sole president and the framers had to decide how to choose this president. They chose from three main systems: elect the president by congress, the people, or electors. Much debate was made over this topic in the constitutional convention and eventually the Electoral College system was chosen. The electoral college system has been in place for over 200 years and Americans are still not sure how it works or if it is the best system. Many Americans feel they go to the polls every year and vote for the president, and in the long run they are in control of the fate of our executive branch. With the 1992 election it was clear that many people have little understanding for how a president is chosen; the 1992 election came close to having no majority of electors due to Ross Perot and his third party. The electoral college is just barely surviving and is under more and more attack all the time. Many other alternative systems will be discussed and more importantly how to come about change.

Before any debate it was assumed the best system of electing the president was to have congress do it. However, if congress was to elect the president, then the president might feel an obligation to help congress get certain laws passed by not vetoing. This would put a dent in the checks and balances system. Even with this problem the system was voted for and approved on four different occasions(Peirce 39).

Not many believed in the direct vote system, but three prominent people did: James Wilson, Gouverneur Morris, and James Madison(Peirce 41). Most delegates did not think that the American democracy had matured enough to offer a direct vote. It was still an unstable government. Sure enough, the arguments that were made in favor of this system were presented for the future generations of America. Madison said, "with all [the direct election’s] imperfections, "that he, "liked the best(Peirce 41)." After all the president is to guard the people from the legislature, therefore he should be selected by the people. But most drafters believed that the people were generally misinformed and easily misled(Peirce 41). This system was voted down twice, but was helpful in seeing the pitfalls of the legislature deciding a president(Peirce 41). When they had seen the pitfalls of two systems, a third compromising system evolved, the electors.

This third system was to have electors that could not be a member of congress vote for the president. Most of the arguments made in support of the elector system were nothing more than negative arguments of the other two systems. The elector system was voted down twice, once as the electors to be chosen by state legislatures, and the other time as the electors to be chosen by direct vote. Finally it was passed under the system of letting state legislatures decide how to choose the electors(Peirce 44). Another compromise had to be made about how many electors each state would have. This was agreed upon by the electors equaling the total of the states representatives and senators(“Electoral” 256). There was no further debate on how to choose electors or the apportionment of electors. Finally they had chosen a system of electing a president. Winston Churchhill later said, "the electoral college system is probably the worst possible method of choosing a president-except for all the others(Glennon 3)."

States went three main routes in choosing electors: the legislative system, where state legislatures choose the electors; a district system, where electors are selected by the people of each congressional district; and the general ticket, or a winner-take-all system, where a popular vote was held in the entire state, and the winner took all electoral votes(Glennon 12). Many have tried to reform by making a more uniform system state by state, but the constitution is very clear that it is each state’s own decision of how to choose electors. This is one right that congress definitely does not have to change.

The legislative system eventually failed because of too much bargaining, promises, and payoffs. The district system eventually lost popularity because it encourages third parties. This left the general ticket system as the dominating system(Glennon 13). However, the framers originally intended electors to be chosen by the people and then vote for what they thought was best. This winner take all system had turned the electors into "mere mandarin toys that nod when set in motion," according to Professor Lucius Wilmerding(Glennon 13). There are two states that still use the district system, but the remaining 48 states use the general ticket system("Electoral" 256).

Most all states no longer show the electors’ names on the ballot. The voter votes for either the president or the party that they wish to hold office. This causes a problem of the unfaithful elector. Electors are expected to ratify the people’s choice by voting for candidates winning the popular election. Electors that do not vote for what they are expected to vote for are considered faithless or unfaithful electors. This has not traditionally been a problem in the history of the electoral college but it could possibly be a problem. Less than 1% of electors have ever misrepresented their community(Glennon 32). 26 states do not require an elector to vote for what they have pledged to vote for by state law(Glennon 32). Although these states are still considered under the general ticket system.

Basically the electoral college system works like this today. Every ten years the census figures adjusts how many representatives each state has. This number plus two, representing the two senators, equals how many electors each state has. Also DC has 3 electors. Then each state has the right to decide how to select these electors. Forty eight states use the general ticket system, two, Maine and Nebraska, use the district system. The general ticket system is suppose to operate as follows. There is a direct vote election held in each state and the winner of the vote is suppose to get all of that states electoral votes. In 24 states the electors are required to vote as pledged. In Maine and Nebraska there is an election held in each congressional district. The winner of every district gets one electoral vote, and the candidate with the most electoral votes gets the remaining two electoral votes. Then all of the votes are counted, and if a candidate gets more than half the votes, he/she becomes the new president. If there is no majority then the election gets thrown into the House of Representatives. There each state is given one vote and they vote on the top three candidates. If a candidate gets a majority vote, then he/she becomes president. If not they continue voting until a majority is reached and the speaker of the house become a temporary president until a majority is reached(Glennon 45).

As I see it there are three problems to the current electoral college system. First a president can be elected to office even if it is not what the people want. Another problem is that electors are not punished for being unfaithful to what they have pledged. And finally the system for electing a president if no electoral majority is reached.

Under the assumption that all states used the general ticket system, all electors were faithful, there are only two candidates, and if a candidate lost a state the candidate received no votes, then a president could be elected with only 22% of the national popular vote. If there was three candidates, it would require only a 15% popular vote. This is because the thirty nine smaller states in the US have a much proportionally larger vote than the larger states. And if a president received 49% of the vote in a state, he could walk away with nothing to show for it in terms of electoral votes. The United States democracy has matured to the point where the people of the US are ready to elect their officials. Under the general ticket system it is possible for a good strategist to ignore 78% of the nation in trying to get his president elected(“Majority” 521). Also note that only 49% of the nation actually votes, meaning the outcome of an election theoretically could represent only 12% of the nation(Reichley 107).

Since the people of a state vote for a president, and not an elector, it should be required for the elector to vote for who they pledged to represent. If the electoral college was to deadlock, and no president had a majority, then the election would pass to the House of Representatives. This would outlaw all logic of the electoral college, giving one vote per state.

Most people believe that the only way to change the voting system is to pass an amendment to the constitution. There are 39 generally smaller states in the US. These states hold a majority in the senate, and also hold a majority in the ratifying of the constitution. The electoral college gives the proportional advantage to the smaller states. Thus it would be near impossible to pass an amendment to take away power from the smaller states and give that power to a direct popular election. But this is not the only way to change the electoral college system.

The constitution clearly states that the choice of electors is to be made by the states. And court cases have named it constitutional for the states to require electors to vote one way or another according to their pledge(Glennon 137). Thus an easier, but just as effective, method of change is called "Allocating the Electoral Vote." In this method the states hold a poplar election and the electoral votes are allocated by percentage. Thus if a state had ten electoral votes, and candidate A received 70% of the popular vote, and candidate B received 18% of the vote, and candidate C received 12% of the vote, then candidate A would receive seven electoral votes, B would get two electoral votes, and C would get one vote. In a worse case scenario, a president could be elected with a minimum of 42% of the popular vote. While this is not as accurate as a real direct vote, it is much more accurate than the current general ticket system. The reason this system does not require a constitutional amendment is because it can be imposed on an individual state basis. In order for this system to work properly, it must also be part of state legislation to require the electors to vote on what they have pledged to vote.

I also believe that a majority of electors should not be required, just a system of whoever has the most votes wins. If there is a tie, my expensive model would be to have a re-election with only the two candidates that tied. It is also possible to just redistribute the votes using only the two main candidates and then recount the votes. I do not think it is the House’s job to solve voting disputes.

I think the best strategy to getting a change in a 200 year old system is to start small, test out a new system on a smaller basis, and if people like it, it will spread and eventually take over the national policy. At that time it would become an amendment. But no matter how change comes about, there is only one way to get that change. It is to get involved. Every American that believes that the presidential election system is wrong, needs to speak up and get it changed. I personally would start at the state level, but no matter where someone starts, they will get one step closer. Get involved; get heard; get change.

Math Supporting Argument

Works Cited
"Electoral College." Congressional Digest Oct 1992: 226,256.
Glennon, Michael J. When No Majority Rules. Washington: Congressional
Quarterly Inc, 1992.
"Majority Rule." Mathematics Teacher Oct 1992: 520-21.
Peirce, Neal R. The People’s President. New York: Simon and Schuster, 1968.
Reichley, James A., ed. Elections American Style. Washington: Brookings
Institution, 1987.

Post  43534  by  ferociousD       How would you classify a government that denied ri
Post  43535  by  clo       OT: It's the War, Stupid
Post  43536  by  clo       OT:It's the War, Stupid
Post  43537  by  clo       OT:Chuck Hagel:For some reason I needed to break u

Post  43538  by  Tampathom       Reply

Hopefully your mindset has become somewhat more sophisticated since junior high.

Education is meant to inculcate social values. Political scientists refer to the term as "political socialization."

The Holocaust was perhaps the worst example of genocide in human history, but it was by no means the only incident, even in Jewish history. Even in the present day, there are several examples of genocidal movements...from tribal warfare in Africa, to ethnic cleansing in the Balkans, to Pol Pot's Khemr Rouge scourge of Cambodia. But the Holocaust is the holy grail. Never again, they cry! You cannot go to any major city in the world without being confronted with a Holocaust museum. Holocaust themes are continually pounded into our brains by the media--movies, documentaries, etc. Is this wrong? Of course not! long as the message we process is that genocide is of those moral absolutes.

But there is a second message that is also deeply ingrained; that Jews have been victims throughout history and therefore they are deserving of restitution and special privilege. Even the word "Jew" pri cks (sic -can't say the word on RB) our ears and is a politically-laden term like "gay" (which just a few decades ago would have been considered an innocuous word). It suggests "victim."

Think about how you have been politically socialized to accept Jews as victims and how it affects your sympathies for Israel. Why do you suppose you and most Americans are more willing to overlook Israeli atrocities? Despite our billions in military aid, despite the fact that Israel is the major regional military power, do we still, deep down, view Jews as victims?

Post  43539  by  lkorrow       Reply
Tampa, do we still, deep down, view Jews as victims? I would suggest that it is probably more on a conscious level and such a viewpoint applies to Israeli Jews. For most American Jews, it's a historical thing, but they are largely a new generation. September 11th drove home what the Israelis face and have faced in their daily lives, increasing our sympathies and solidarity.

The rememberance of the Holocaust and other such atrocities against other peoples helps solidify our views of right vs. wrong and good vs. evil. It shapes our emotional and actual responses to pushing the Israelis into the sea as well and our reaction to sadman's actions on his own people and his agression towards his neighbors. It's all part of the reason Americans chose life over death and find it hard to understand people who do not.


Post  43540  by  lkorrow       OT: A thought on the sniper.
Post  43541  by  Decomposed       OT: Table ON TOPIC SUMMARY Oct 11, 2002
Post  43542  by  oldCADuser       OT: While I'm tempted to jump into this Electoral

Post  43543  by  brent0919       Reply

I do not post much, but am an avid reader of your posts. We all know that buyer be ware when investing as well as subscribing to information about the possible direction of the markets. In reading your post, I take you to mean that longer term as in years and possibly decades, in your opinion the market will be okay by shaking out the undercover losers. Is that what your are saying? ie enron wcom etc. Our job as investors is to do what you have done and look deeper than on the surface and how things appear. Risk management is the name of the game. don't put all of your eggs in one basket. If the market does turn around in the next 10 years or so, people who took your advice will be handsomely rewarded in their retirement. Enough Rambling. I check your posts on both Table and Yhoo. My question is what is your long term opinion of Xico, EMC, CSCO, hlit, nok, Palm, mot, at these levels. I am curious to know where you think these companies will be in 10 years.


Post  43544  by  danking_70       OT: Why Finland??
Post  43545  by  danking_70       OT: Let's not forget Bali

Post  43546  by  pmcw       Reply
Brent, Thanks for the kind words. When I say "in the longer term" I'm thinking more about three to maybe as long as ten years. However, generally, I'm trying to look out three to five years when I'm making investment decisions. This is not to say that I'm not making daily trading decisions, but that's more for income than it is to support life style.

Right now I strongly favor companies that have very simple business plans and a strategic focus in growing their served market. The latter can be through product introductions that bring them into new markets, via the existing market they serve growing or both. I see HLIT, ISIL and XICO fitting this definition.

I also suggest keeping a large stash of cash just in case there are new opportunities or just in case you need it to support your personal needs. I've been using a portion of my reserves to buy my three focus stocks very aggressively during the last few weeks.

I'll make some brief comments about the other companies you mentioned, but remember, they are very general and my knowledge is neither in-depth nor is it totally up to date.

CSCO: I think CSCO is getting stronger and when their market turns they will grow with a vengeance. I feel they have also redefined operations so that they will run more efficiently. "When" is the real question rather than "if".

EMC: I like the new software-centric focus of EMC and the fact that they are no longer telling customers "it's the EMC way or no-way". They are striking deals for niches within the customer base and working hard to insure customers are happy. Through this approach I feel they will continue to be the leader.

NOK: NOK has been more of a trader for me. I like to buy it anytime it drops below $12.50. However, I feel the Koreans will offer continued competition and keep pressure on their margins for handsets.

PALM: I wouldn't touch a company lead by Benhamou for love or money. He has effectively turned this diamond to coal.

MOT: MOT management looks brilliant next to Benhamou, but they are another shining example of how not to run a company. MOT had it all ten years ago, but bumbled it away. Heck, beyond controlling some great markets they could also count most of their competitor as customers for either semis or subsystems. There are too many great companies to toy with those not run by strong management.

A sector you didn't mention was semi capital equipment. It will soon be time to start filtering some money into AMAT and NVLS. Of course, it might be better for you to simply take a look at the SOXX index since it includes both semis and equipment. If you make monthly or quarterly investments into a SOXX index fund I feel confident that you'll be real happy over the "longer term". ;o)

Regards, pmcw

Post  43547  by  pacemakernj       Reply
Nvr, RE: MIMS: yes I did. As you know I had been trading it almost daily. But I got out at 9.70 for a small loss. Once it broke 10 on the downside I knew something was up. How could that CEO say only 2 months that they would meet their earnings for the year. That's like the tenth CEO that I know of that has done that. But once I saw their earnings for the second quarter I knew this company was in trouble. If you look at their statements they really had no growth other than an acquisition they did this year. So to me it was right there in front of me. The stock wasn't acting to good prior to the warning anyway. I've got my eye on BLUD though. Also bought INTC, CY this week and DUK and traded EP as well. To me the story is still the same, trade, trade, trade. I've been pretty active in here at what I think is a short term bottom. It's been very exciting for quick pops. Hope you are well. Regards, Pace.

Post  43548  by  Decomposed       ot: Sniper

Post  43549  by  pacemakernj       Reply
Linda, I am a little disappointed in gold this week. Given the carnage in the market I thought gold would have broken 330. The news keeps pouring in and none of it is good. As Roof keeps hammering away on JPM their $42 billion debt got downgraded this week. I would have thought that downgrade would push gold above $330. Throw in the war resolution and gold went the other way. Strange action that bears watching. I don't know if you saw Sir John Templeton on Ruykeyser's Wall Street last night. He was very cautious about the US market. I don't think he wanted to come off as too bearish but reading between his words this market is STILL overvalued. Right now he's borrowing money from Japan at get this .04% and buying Treasury Strips 5 and 10 year's. He said he was making about 20%. That was where he was putting his personal money. He did say the DJIA would hit 1 million by the end of this century. That would equal a compounded return of 7%. But he really said that there was no market out there yet worth buying. Except China. But he said they don't have any way to purchase stocks there yet. Regards, Pace.

Post  43550  by  maldinero       OT: Snooping for sniper(s)…
Post  43551  by  lkorrow       OT: Finland, it looks like no place is exempt from

Post  43552  by  lkorrow       Reply
Speaking of Cisco, they have come up with a new innovation related to charitable contributions and volunteer work of sorts.

From High-Tech To Nonprofit
Kerry A. Dolan, 10.01.02, 8:00 AM ET

NEW YORK - When Cisco Systems laid off 8,500 employees in March 2001 it offered a six-month severance package--or an unusual alternative: Take a two-thirds pay cut, keep benefits and commit to working one year for one of 21 nonprofits chosen by Cisco. The nonprofits would pay nothing.

It wasn't for everyone, of course, but eventually 81 Cisco (nasdaq: CSCO - news - people ) workers were placed at nonprofit organizations around the country. The Cisco fellows, as they are called, have been put to work doing everything from networking printers to installing databases to developing business plans.

More on Cisco Systems
Tear Sheet

Forbes 500s

What has happened since? Only five people left the nonprofits early, mainly when offered good jobs elsewhere. Those who stayed talk of a life-changing experience, even as they had to battle slow-moving organizations and slash their personal spending. For the charities, it was a "once-in-a-lifetime opportunity," offers David Sandretto, executive director of San Jose, Calif.-based food bank Second Harvest. Sandretto's seven Cisco fellows helped install a new payroll system that he wouldn't have been able to afford otherwise.

Cisco had hoped to rehire the fellows once their year of nonprofit work ended. But with tech spending still flat, Cisco extended the fellowship program through January 2003. 46 of the fellows are staying on and 12 leaving; so far 17 have accepted jobs back within Cisco. Here's a look at three fellows:

"Cisco Bob"

Until late April last year, Robert Wendel was working 60-hour weeks managing engineers servicing Cisco's 50 largest accounts in Oregon. Now Wendel, 47, spends his days as a "digital accelerator" with One Economy, a Washington, D.C.-based nonprofit that wires low-income housing for high-speed Internet access. Wendel, dubbed Cisco Bob by his new colleagues, has helped 2,000 public housing units in Oregon get high-speed access. "The people we're helping want to see me," says Wendel, noting that wasn't always the case at Cisco.

His new job has its challenges. Though it costs on average only an extra $150 to $200 to wire a unit for high-speed access, Wendel is competing with basic needs like carpet and paint. "Sometimes it's hard to convince [housing authorities] to prioritize this program," he says.

"I'll see a single mother who's made the effort to buy her kids a computer," he says. "They have an Internet connection and she'll notice the kids are doing their homework at home. Before, the kids weren't doing their homework."

No longer making six figures, Wendel, who is married with five children, has asked his oldest kids, now in college, to start paying some of their own expenses. His wife has gone back to work as a substitute teacher. "My family has reevaluated the way we live our life," he says. "Before if we wanted a DVD player, we'd just go buy it. Now we're saying, do we really need this?"

But he's enjoying his work so much that he's staying at One Economy through January and then plans to work full time (for pay) for the nonprofit--at least for a few years.

Moving Back In

Sandra Hodgin, 27, lost her $52,000 job as an analyst in Cisco's corporate finance department in April 2001. She was immediately drawn to the Cisco Fellowship program, but to survive on the reduced salary, she rented out her condominium and moved back with her parents. In late June last year she started as the accounting manager for InnVision, a San Jose, Calif.-based group that runs 13 homeless shelters.

She started by replacing InnVision's DOS-based system with a Windows-based accounting system, which is not only faster but also generates more detailed reports.

Looking for a more hands-on role, in October of last year she moved into a residence for battered women in Santa Clara to serve as manager. It was a big change from the white-collar world of Cisco. At first she was overwhelmed with hundreds of small requests, such as replacing light bulbs. But she takes pride in her small accomplishments, like getting a very shy woman at the residence to interact more with tenants.

Hodgin's year at InnVision was up in late June, but she's decided to stay at the women's residence through the end of the year. In part, that's because there were no jobs she was qualified for at Cisco. But she's loved being able to expand her horizons at InnVision.

Mellowing Out

Paul Moeller, who pulled in $225,000 running Cisco's marketing from Boston for the northeastern U.S., started in July 2001 as the chief knowledge officer at City Year, a Boston-based organization that tries to get young people to do volunteer work. An admittedly pushy type, he ran into office politics trying to implement new technology systems. Some City Year employees balked at certain decisions, questioning his authority. City Year President Michael Brown squelched that by having Moeller report to him while promoting him to chief information officer.

Over time Moeller realized he had to adjust the way he dealt with co-workers. "I had to educate people more about what [new technology] would do for them," he explains. "Some people got it right away; others didn't."

His accomplishments were real. A new online human resources system implemented by him and six other Cisco fellows promises to save City Year about $250,000 in labor costs annually. And Moeller negotiated a 20% discount on supplies when the fellows implemented an online, nationwide office-supply purchasing program.

Moeller, who has a wife and two grown children, hasn't had to change his lifestyle, thanks to a nice payout he received when his former employer was bought by Cisco. He's decided to extend his stay at City Year through the end of the year, and after that will look for whatever opportunities--in the for-profit or nonprofit world--come his way. No matter what, he intends to make community service a part of his life.


Post  43553  by  pacemakernj       OT: Tin, can you imagine saying that "you hop

Post  43554  by  pacemakernj       Reply
Linda, yes some companies are moving to China. Also the Japanese are building factories there along with many US multinational's. Hey, when you can get labor for .35/hr and no benefits wouldn't you want to manufacturer there? Pace.

Post  43555  by  pacemakernj       OT: Clo, I don't agree with Frank Rich on ANYTHING

Post  43556  by  pacemakernj       Reply
PMCW, RE: ISIL, just thought you would like to know there was a very favorable article on on ISIL in today's IBD. It was a Q and A with the CEO. He was very upbeat on the future and judging from the interview I would conclude with your assessment that ISIL should be bought in one's account and put away for the next ten year's. Regard's, Pace.

Post  43557  by  lkorrow       Reply
Pace, me too, I was up 25% and all of a sudden I'm about flat. AU is the only shining star left, up 9% plus a 3% 6-month dividend. I'm about flat.

The rally seemed to be more than short covering. Perhaps it was GWB putting the west coast back to work and saving $1B/day . . .

China. Saw something on a China Telecom IPO, I think Merrill is handling it. Maybe others, I don't recall. Said they want to distribute 20% of earnings as dividends. I think the shares are less than a dollar. Perhaps CSCO will benefit by their spending (speculation). I think there are funds on China, a Yahoo search on China picked up a bunch of stuff. More on deflation another time, got to get going . . .

I didn't catch Sir John, will have to look and see what strips are since 20% would be quite nice.

Post  43558  by  lkorrow       Reply
Pace, seems like its a gain for us, since mfg's already offshore. Frankly, I think a lot of prices went up with the bubble. Ready for some relief on the cost of sneakers, they're not keeping pace with PCs, a. k. a., Moore's Law. :-)

Post  43559  by  jeffbas       Reply
pmcw, a few comments on your comments.

I think there are only two kinds of stocks to buy:

-Blue chip stocks that have the current leadership position AND the cash to emerge from this environment with a stronger competitive position than before AND low valuations. Cisco was a good example at $8, with $3 per share in cash and 50 cents a share earnings. It is also almost unique in having the cash to make sure that it can buy any technology it wants for its product line at a cheap price.

-Companies on a clear path to greatly expand the size of their served markets with competitive products, both as to features and price. Xicor is an example there.

I generally dislike most big tech companies, for a couple of reasons.

-They are too big to avoid the drag of the general economy which may not be strong for years. Being big also means they are likely to have a major competitor for each key product line. Motorola is in the same boat as Nokia on that score, with respect to cell phones.

-The price may still reflect the past and not enough a more challenging future. Dell, Intel and Microsoft come to mind in slower growing PC markets; you don't want to own a company with a problematic core market trying to develop growth opportunities elsewhere. Hewlett Packard is another example, which may have issues getting value out of Compaq (you take market share from a competitor, not buy one), and could have problems with Dell planning to enter the printer market.

I also am not partial to the semi-equipment companies. With the Cisco type company you can anticipate where they WILL be in 5-10 years; with the Xicor type you can anticipate where they MIGHT be. With the semi-equipment companies, I think it is "who knows" - which, in my mind, is a major issue.

I think the industry is undergoing change which makes the 5-10 year period unpredictable. The chip manufacturers will probably move more to an outsourcing model, causing growth for equipment manufacturers to generally be less than for chip manufacturers. Also, in maybe 5-10 years or so, a lot of the chip manufacturers will have to move to new technology (such as EUV) to make the small feature size chips of the day. Any shifts in technology makes it more difficult to know which semi-equipment companies will be around in 10 years and with what market share. It also has some of the risks that have bankrupted most of the telecom equipment industry - a very cyclical industry served, some over-indebted customers (buying much less), and risks of bankrupt customers (buying zero) if the downturn continues for a couple more years. Thus, I would avoid this industry unless it were available at a meaningful discount to the chip manufacturers. (I don't see any discount today with, for example, AMAT/NVLS and INTC/TXN at similar Price/Sale ratios.)

Post  43560  by  pmcw       Reply
jeff, I guess what you're generally saying is that you agree with my assessment other than my point about looking at semi equipment companies during the next few months.

Right now it will cost a semi company about $2B to bring up a 0.9 micron plant. I wrote last spring about some of the technical problems with this and future smaller technologies as well as the huge costs associated with this transition. I suggested (strongly) that we would see a huge recession and then a consolidation in the equipment/fab sectors. That fact is becoming clearly understood now and, to a great extent, priced into the stocks.

I see a resurgence in fab spending starting between Q3 2003 and Q3 2004. I think we need to see some additional evidence that semi sales will build next year before I would be willing to bet on this though.

Regards, pmcw

Post  43561  by  oldCADuser       Reply
It will be interesting to see both what the markets do and the kind of comments we will hear in both the financial and popular media as people start to receive their 3rd quarter 401k statements. I got mine today (my wife's will be here in a few days I would think, but I won't be able to report on her results until I get back).

As for my account, I was DOWN 18.3% for the quarter. Year-to-date, I'm DOWN 29.5%.

Just for the record, the current asset mix in my account is 14% Cash, 10% Bonds, 72% Stocks and 4% Company Stock (EDS). Also note that I did not move any funds between accounts this last quarter and that I continued to contribute the maximum amount that I was allowed each pay-period.

Anyone else out there with a 401k care to comment on their experiences this quarter?


Post  43562  by  oldCADuser       OT: I decided that I needed a couple more books fo
Post  43563  by  lkorrow       OT: This is probably all wet because anyone living

Post  43564  by  lkorrow       Reply
OCU, I hope you're going to give us a book report on your return. Have a good trip. Linda

Post  43565  by  maniati       OT: I wasn't planning on a second post on this sub
Post  43566  by  ferociousD       OT: Interesting analysis of German election-

Post  43567  by  uponroof       Reply

I am wondering about JPM and gold myself.
Here's something of interest in todays Midas letter wrt their recent downgrade:

October 12 - Gold $316.10 down 30 cents - Silver $4.30 up 3 cents

Central Banks Cracking Down on Morgan’s Gold Loans

Yesterday was a significant day for us gold bulls. While the stock market soared in a PPT/short-covering inspired rally, gold barely budged. It closed higher in Europe and only slightly lower in the U.S. The gold spot basis in London over Comex went up noticeably versus the same basis in New York. Gold held because the central banks are cracking down on JPM’s gold loans. That was the word circulating on the Comex floor. And, I mean circulating!

Morgan was not the only one mentioned on the Comex floor. Commercebank also caught flak, but to a MUCH lesser extent.

All of this brouhaha has been expected by MIDAS and the GATA ARMY, but this is coming as a bit of a reality shock/surprise to many in the clueless gold world.

It gets better. All of a sudden, counterparty risk has become the topic of the day among gold producers and bullion banks. From what I hear, contracts between the two are being closely scrutinized and is the talk of the Comex. That scrutiny is only going to grow in intensity as time goes on. This is EXACTLY what Jim Sinclair has been pounding the table about for a long time.

As past stated, the central banks have certain loan covenants that forbid their bank from loaning gold to certain bullion banks that are not AA rated. Now that Morgan has been downgraded below a AA rating, those covenants HAVE to be enforced. Most likely it means that certain gold loans will not be rolled over, while others could even be recalled in the immediate future.

Morgan is going into the persona non grata phase with the world’s central banks...."

snip're right, "strange action that bears watching" indeed. It's fairly obvious that POG is under maximum security. The question is, as it has always been, can they guard it forever? I got a few chips on the table that say they can't.

Good Luck


Post  43568  by  Briguy       Reply
A bit of prophecy coming true...

Back in the beginning of August, I posted that I felt LU and NT would file for bankruptcy someday in the future...

Well, looks like we are moving closer to that prophecy coming true...

Hard to believe isn't it?