More pressingly, Paulson is inept as a communicator. His near-perverse suggestion that China should "speed up the pace of reforms because...they're somewhere between a market-driven economy and [a managed economy]...and that'll get them nowhere" is a logical fallacy. Last time I checked, the Chinese had a gross domestic product that is up 10%, industrial production that is up 14%, a trade balance of more than $163 billion for the past year, a current-account upside of $160 billion, and foreign reserves above $987 billion.
The audacity of telling Chinese officials to drop their mixed, even quasi-managed economy for the free-market approach of the current U.S. model is tantamount to an ill-tempered parent smacking a baby. With communication ineptitude like this, Paulson did not deserve the hearing he got from the Chinese.
Associate Professor, Communications
Boston "Where to invest 2007" (Cover Story, Dec. 25/Jan. 1) promised to help "plan a winning strategy for the new year, whatever your investment needs." Fascinating, I must say. But what ever happened to the good old academic mantra of investing on the Standard & Poor's 500-stock index and not having to worry about selecting specific stocks? It is a statistical fact that 70% to 80% of money managers often fail to beat the index's market returns. Do you consider yourself within the other 20%?
Arlington, Va. "The foreclosure factories' vise" (News & Insights, Dec. 25/Jan. 1) was wrong to mention a mortgage foreclosure recently experienced by borrowers who had a loan with our company. There's absolutely no association between the borrowers' situation and the story's premise that mortgage services are using predatory tactics to harm consumers.
The article grossly misrepresents, solely as late charges and attorney fees, an amount it states was owed on the loan. The fact is, the actual amount owed would have consisted almost entirely of past-due principal and interest and amounts advanced on the borrowers' behalf for real estate taxes and insurance. The borrowers also received and signed disclosures from their broker as well as additional plain-language disclosures from Option One Mortgage (HRB
) indicating that they understood how an adjustable-rate mortgage works, contrary to what the article contends.
No one wins when a borrower loses a home. As a top-rated servicer, Option One did all the right things to help the borrowers get back on track toward curing their loan default and repaying their debt.
While the reasons for foreclosures, such as bankruptcy, job loss, and divorce, remain outside the control of the servicer, there are remedies. At Option One we will continue to focus on keeping people in their homes through early intervention, workout plans, and a compassionate, humane approach.
Chief Servicing Officer
Option One Mortgage Corp.
Irvine, Calif. Your article is titled "Silicone goes subtle" (News & Insights, Dec. 25/ Jan. 1), yet Allergan's (AGN
) marketing as outlined within is anything but. It includes Web sites with links to positive studies and an "ask the nurse" feature, a public relations "blitz" (your word, not mine) targeting editors of women's magazines, and a print campaign. The company is also poaching employees from Nestl? (NSRGY
) and Procter & Gamble (PG
) as if selling silicone breast implants were as innocuous as hawking candy and toothpaste.
Citing new studies that support the Food & Drug Administration's lifting of the 14-year moratorium, Allergan is attempting to push its product on well-educated women with the tagline "You've never looked smarter." But is it smart to believe only the results of the latest studies? Intelligent people know that all studies are suspect and that you can find one to support whatever theory you want to promote. And do women need bigger boobs to feel smart, to themselves and others?
Intelligent people know there is no correlation between gray matter and externals. And finally, women's experience with being experimented on by the medical Establishment makes it unlikely that they will be suckered again. Can you say "hormone replacement"?
Karen Ann DeLuca
Alexandria, Va. It's interesting that former House Majority Leader John Boehner (R-Ohio) characterizes proposed investigations into fraud in Iraq contracts as "revenge" by the Democrats ("Give-'em-hell Nancy?" Up Front, Dec. 25/Jan.1). I suppose, by the implied standard, uncovering fraud against shareholders is simply sour grapes from those who weren't quick enough to have already cheated.
It would be helpful to investors and others if BusinessWeek published an annual list of "Liars, Cheaters, and Thieves." After all, anyone willing to cheat the federal government is certainly waiting for an opportunity to cheat shareholders, business partners, and the general public.
The list could serve as a warning. Prosecution has proved insufficient to deter fraudulent behavior, but perhaps being shunned by investors and others might work.
Covington, Ga. If the corporation is a democracy of its owners, then anti-Wal-Mart union organizers have just as much right to be in the Wal-Mart Stores (WMT
) boardroom as they do in Congress, if they can get elected ("The boardroom bunker," The Welch Way, Dec. 25/Jan. 1).
While those in power never enjoy the process of dissent and diversity of opinion, its value to all institutions is well established. Did board members at General Motors (GM
) welcome Ralph Nader's attack on the Corvair's safety? If they had, might GM have won a larger share of safety-conscious buyers?
If, however, you believe the corporation is a dictatorial institution, then aggressive dissent has no role or economic value in its boardroom. A third approach is to assume that all shareholders have similar basic values and that they are mirrored in the board's views on fundamental decisions, which are not open to debate.
Choosing a model of corporate governance is now every board's challenge. Before deciding, they should examine the purpose of shareholders' votes. If "corporate democracy" turns out to be an oxymoron, it should be eliminated permanently before it brings more fear and distraction to board members. If not, then directors should be prepared for more discomfort.