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Night of the Zombie Debtor

Responding to "A New Menace to the Economy" (News, Jan. 26/Feb. 2), most readers agreed that investors and taxpayers face peril from "zombie debtors," those skirting failure thanks only to support from lenders or the government. Several readers drew on their deep knowledge of zombie movies to observe that it's nearly impossible to eliminate the undead. Others warned that wiping out these debtors in the name of the free market carries its own risks. —Peter Coy

I agree that we should avoid supporting zombie businesses and homeowners. A lot of these "loan modifications" are doing nothing more than kicking a can [further] down the road.

Screen name: Shannon

Right now, a little social capitalism is our only hope. There will be no loosening of credit until investors are satisfied that the appropriate regulatory structure is in place to safeguard their investments.

Screen name: Fuzzy

There have been firms that were considered zombies by the market and that came back--and made a killing. Caterpillar (CAT) was one. Apple (AAPL) was another, before the iPod. Maybe they weren't on life support, but they were on their way. One size does not fit all.

Screen name: who decides?

I liked the insight that the housing sector, too, is like a big zombie. Many property owners I know are doing exactly what you say: trying to make payments even though it is becoming unaffordable, given their monthly budgets.

Screen name: lo

You really missed the biggest zombie of them all: the federal government. It is the mother of all zombies.

Screen name: tony

Brilliant concept, but somebody hasn't been paying attention during zombie movies. The zombies almost always winbecause they're already dead.

Screen name: DannyD

Satyam's Auditor Was Asleep at the Switch

Regarding "A Scandal Shakes India's Outsourcers" (News, Jan. 19): How bad can CPA auditors get? For eight years, PricewaterhouseCoopers was the auditor for Satyam Computer Services (SAY) but didn't notice the $1 billion of cash missing. Satyam's stock has traded on the New York Stock Exchange (NYX) for years, and many American investors have thus been plundered.

The Indian police raided PricewaterhouseCooper's office in Hyderabad to find out what the apparent culprits did. Maybe U.S. law enforcement can learn something about speedy justice from the Indian system.

Carl Olson Chairman

Fund for Stockowners Rights


No Way to Vote Against a Board Member

In "Shareholders Already Have a Say on Pay" (Feedback, Jan. 19), a reader writes that shareholders have a say on executive pay because they elect the board.

Not exactly true. For example, as a mutual insurance policyholder, I can vote for a board member or I can withhold my vote. There is no way to vote against a board member. What good is an aye-only vote?

Paul Wetor


Credit Crash: The Problem Was Incentives, Not Models

"Perfect Models, Imperfect World" (Outside Shot, Jan. 12) piled blame on the quantitative models that contributed to the credit crash of 2008.

That misses the point. The real catalyst to this disaster was a perverse system of incentives and the financial community's failure to fix them.

As a former investment banker—first in private equity and later in commercial real estate finance—I knew, as did my superiors, that most of the debt-saddled firms and properties couldn't weather the next ebb in the business cycle.

The deals passed through committee regardless. Frankly, the pressure to drive deal volume at every stage would have overruled anything the models predicted anyway.

Thomas Wollmann


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