Friday's Top 10: Lies, damned lies and statistics; Banking advice stepping up; Croatia next for bailout; US nowhere near a housing bubble; Chinese hotels 'deluxing'

Today's Top 10 is a guest post from Craig Simpson, senior analyst for interest.co.nz.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz. And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 10s here.

1. According to Mark Twain there are three kinds of lie: Lies, damned lies and statistics.
If you have a long enough time series of data you can usually find a trend or pattern emerging which helps justify or rationalise a decision. A pretty good example of this is the Super Bowl Indicator.

The Super Bowl Indicator was originally floated by New York Times sportswriter Leonard Koppett in 1978. In theory depending on which conference the Super Bowl winner came from indicated whether the stock market was going to be positive or negative over the coming 12-months.

The highly respected Financial Analysts Journal (FAJ) published an article in 1989 entitled “Did Joe Montana Save the Stock Market?” The title referred to the fact that in the 1989 Super Bowl, legendary quarterback Joe Montana drove the San Francisco 49ers 92 yards in the final three minutes of the game to score a touchdown and beat the Cincinnati Bengals 20-16.

If the Seattle Seahawks beat the Denver Broncos we should see the market rally further.

2. Bank advice stepping up - really?
Every day I cycle through a handful of websites, as you do, and came across a stunning remark. In this particular article there was a comment attributed to Grant Gilbert ASB's general manager of branch banking (out of Auckland)......'because banks were increasing their advice offerings, it was no longer always necessary for customers to seek independent mortgage or investment advice.' 

I don't know too many people that would blindly go with what ever solution their bank put in front of them without first either doing their own homework or getting a second opinion from either an adviser or friend.

How stupid do the banks think their customers are?

3. Is Croatia the next EU country to need a bailout?
Croatia was the 28th country admitted into the European Union. They finally were included in July last year after a journey taking more than 10-years. Questions are being asked around whether Croatia should have ever been accepted given its economy is in such a mess.

Not only is Croatia's economy a basket case they are also rated as one of the most corrupt countries in the EU according to a survey conducted by Ernst & Young. Only Slovenia (also an EU member country) was viewed as being more corrupt.

Maybe Europe is not quite out of the woods just yet.

4. The US nowhere near a housing bubble
Housing bubbles are measured by comparing current prices to a reliable index of housing prices. The U.S. Bureau of Labor Statistics has been keeping track of the costs of renting a residence since at least 1983; its index shows a steady rise of about 3 percent a year during this 30-year period. This is as it should be; other things being equal, rentals should track the inflation rate. Home prices should do the same. If prices rise much above the rental rate, families theoretically would begin to rent, not buy.

Housing bubbles, then, become visible - and can legitimately be called bubbles - when housing prices diverge significantly from rents.

The U.S. housing market could be in the early stages of yet another bubble, warned Robert Shiller, co-founder of the Case-Shiller index.

The team at Barclays still believe U.S. homes remain very affordable and have produced the following chart to illustrate their point. 

5. What is your wearable strategy?
One of the latest terms doing the rounds is "wearable strategy". Yes, I had to google this too to find out what it was.

At the 2014 Consumer Electronic Show in Las Vegas, Intel outlined their latest wearable strategy which includes smart earbuds, a smart headset called Jarvis and a smartwatch to a device - developed with Rest Devices for its Mimo Baby product line that can be worn on an infant's onesie that monitors the baby's vitals and sends the data to a coffee mug, where it can be displayed.

Here are some other wearable strategy ideas found on the web.

- a pair of sandals that pulsates when your bus is due (great idea for school kids who have to wear sandals in summer maybe).

- ankle band that quivers when you've got a hangover (I think the headache kind of gives it away!)

- a handbag that glistens when it's going to rain (handy I guess).

- a pair of trousers that undulates when you fall asleep on the nightbus (don't ask me how this works).

The possibilities are endless.

6. Latest Italian Fashion
No, this is not about the next must have items from the latest Milan fashion show but a venture by BioMilano which promises to incorporate 60 abandoned farms into a greenbelt surrounding the city. Part of BioMilano's mission is to create a vertical forest building which boasts a stunning green façade planted with dense forest systems to provide microclimate and to filter out polluting dust particles.

As a latte sipping, apartment dweller myself, I'm not too sure I want that many trees on my balcony. I am sure it will appeal to some more environmentally conscious folk out there.

7. For around 20-years the launch code for US nuclear missiles was a series of eight zeros 
One of the first things you are told when choosing a pin number for your bank account or any account for that matter is don't use your birthday and do not write your password down or share it with anyone.

I was surprised to learn therefore that at the height of the Cold War, the US military put such an emphasis on a rapid response to an attack on American soil, that to minimise any foreseeable delay in launching a nuclear missile, they intentionally set the launch codes at every silo in the US to eight zeroes. So we have to go to great lengths to protect our money but not the ability to fire off a nuclear weapon. 

SplashData's annual top 25 dumb password list was compiled from files containing millions of stolen passwords posted online during the previous year. The company advises consumers or businesses using any of the passwords on the list to change them immediately. 

I used to think qwerty (the keys on the top row of the keyboard) was a pretty good password but apparently not. Qwerty by the way was the 4th dumbest password. The top three were: 123456; password & 12345678.

One that took me by surprise was 'monkey' - who would ever think of that?

8. Is higher education a waste of money - the findings from Davos 2014
I used to think that work experience was more valuable than a piece of paper from a university. That was until I wanted to advance my career in the late 1990's and found that a degree at a minimum was required.

At the World Economic Forum in Davos in one of the open discussion forums they pondered the merits of going to university.

Angel Gurria (OECD Secretary-General) concluded that despite debt and misdirected skills problems, it was still worth getting a college degree. In 2008, people with a degree in OECD countries earned on average 75% more than those without one, he said. Today that figure is about 90%.

"Not everyone can be a dropout like Bill Gates or Zach [Sims] or [Mark] Zuckerberg," so do take that extra loan and get a degree, he advised.

9. Chinese hotels scale back the luxury factor to meet sumptuary laws
Many hotels strive for a 5-star rating, it signals superior standards of service, and attracts more affluent clients. Well in China many of the luxury hotels are "deluxing" to meet the ruling party bans on consumption in upscale accommodations at public expense.

As the Chinese Lunar New Year on Jan. 31 approaches, the Party released another notice ordering beefed-up supervision and welcoming tip-offs from citizens and media about excessive spending and gifts before and during the week-long holiday.

Picture of the five star InterContinental Songjiang Shimao hotel, which is being built inside an abandoned quarry in China located at the base of Tianmenshan Mountain.

10. Clarke & Dawe
Yeah, they're back! (Those Aussies get super long holidays.) Turning back the news where it is safe to do so ...