Thursday, September 23, 2010

What I have found interesting lately

Bizarre findings in advertising:
“ a relaxed situation like TV watching, attention tends to be used mainly as a defence mechanism. If an ad bombards us with new information, our natural response is to pay attention so we can counter-argue what it is telling us. On the other hand, if we feel we like and enjoy an ad, we tend to be more trustful of it and therefore we don't feel we need to pay too much attention to it.
"The sting in the tail is that by paying less attention, we are less able to counter-argue what the ad is communicating. In effect we let our guard down and leave ourselves more open to the advertiser's message.
"The findings suggest that if you don't want an ad to affect you in this way, you should watch it more closely."
Responsible lending?
Genworth’s acting chief executive Paul Caputo said yesterday the group had relaxed its view on earnings from overtime and second jobs in loan serviceability calculations...
Caputo said: “We support loans up to 95 per cent LVR. One of the lessons of the global financial crisis is that where a borrower has skin in the game the behaviour is very different.
“I don’t think we will get back to underwriting 100 per cent LVR loans.
“Another factor is the National Credit Act. It would be hard to see how a 100 per cent LVR loan would fit into the responsible lending criteria.”
Why of course, lending 95% of inflated values to people who need second jobs and overtime pay to meet repayments on teaser mortgage rates epitomises responsible lending.  
Why are German home prices so stable? It is something they aspire to. Unlike Australia, where high prices are frowned upon everywhere except in housing.
Amazing graphic on the daily activities of Americans
Helmet laws back in the headlines - a good introduction to the debate
Leading indicators for the housing market - a website tracking advertising history to give up to the minute data on vendor discounting and days on market.
In the spirit of environmental month, a short must see video on global commercial air travel. What would be an economist environmentalist view?

1 comment:

  1. Cameron, good point re. responsible lending. With deposits of only 5% required, a reasonable correction in house prices would send a significant number of households into negative equity and potential default.