Felix Salmon

ETFs start to underperform

Is this the beginning of the end of ETFs as an asset class? Ian Salisbury has an important story this weekend, saying that the average ETF underperformed its benchmark by 125bp in 2009, and even the monster SPY underperformed by 19bp. That’s more than twice its total expense ratio.

FICO’s new businesses

The FICO people invited me to a press dinner on Thursday evening, where I learned quite a bit about their credit-scoring system — including the fact that the “free” credit score being sleazily shilled by Ben Stein is not actually a FICO score at all, and therefore even more useless than I’d thought. I also learned about their new Credit Capacity Index — a pretty useful tool, I think, which tells banks not how likely someone is to default on their present debt load, but rather how likely they are to default if you extend even more credit to them.

The NYT’s blogs are set to be paywalled

Arthur Sulzberger, Janet Robinson, and Martin Nisenholtz of the NYT all took the opportunity of hosting today’s PaidContent conference to talk at length about their paywall plans. Which makes it all the more surprising that their message was so garbled: when they weren’t simply refusing to say anything at all, they were giving three conflicting answers to the same question.

Lessons from FT.com

Now that the New York Times has decided to move to a metered paywall system, a lot of attention at the PaidContent conference — at the TimesCenter, no less — is being directed towards Rob Grimshaw. He’s the managing director of FT.com, which has been a pioneer in the meter-model space.

Why Treasury shouldn’t regulate banks

Wow, Democratic Senator Chris Dodd really doesn’t want the Federal Reserve to be the main systemic-risk regulator — to the degree that his latest proposal gives that job to the Treasury Secretary, of all people. This is not a good idea, as Karen Shaw Petrou says:

Counterparties

Paterson is even more useless than I’d thought — NYT

Crap tax law implicated in Austin terror-suicide: it’s not the IRS’s fault, it’s Congress — NYT

Adventures in Fedspeak

The news of the moment is that the Fed has raised the discount rate to 0.75%. So why does the headline announcing the fact read like this?

Cash on Delivery Aid

I like Nancy Birdsall’s idea of “Cash on Delivery Aid” a lot. Instead of spending money on building schools or hiring teachers or any other means towards an educational end, just pay for outputs instead:

Why car tracking isn’t a privacy issue

Last week, weighing in on a miles-travelled tax, I said that “there really is something quite creepily Big Brotherish about trying to track every single vehicle in America”. But then I heard from Bern Grush of Skymeter, and he’s persuaded me that you don’t actually need to make tracking information available in order to tax miles travelled.