Stories | December 11, 2014

“Contactless”, FIFA World Cup winners: the eZonomic significance of four news events of 2014

A take on the top 2014 news items that are relevant – in some small way at least – to the tips, tricks and traps people face when managing money.

In November, the Philae lander tweeted that it had defied immense odds to land on the comet Churyumov-Gerasimenko, known as 67P. Time laid out the logistical challenge when it described the target as resembling a four-kilometre square unshelled peanut, tearing through space at 11 miles per second (39,600 mph, or 63,730 kph).

Chance is a fine thing
Those questioning why so much attention was given to news of successful landing may have been failing to understand the joy associated with winning when the probability of success is minute. Many actually overweight the likelihood of small probabilities coming true.
This thinking trap is a reason so many people play the lottery week after week believing that they will win and why an inconceivably high number of children think they will grow up to be professional singers or footballers.
Germany took home the FIFA World Cup 2014 in July, leading former England captain Rio Ferdinand to comment on BBC “domination goes in cycles...Germany look like they can dominate for years to come.”

Good neighbours
This may reflect what academics call “peer effects” – or put simply, players catching the world beating habits of players near them. It is similar to the situation that author Simon Kuper detailed for eZonomics in his view of factors that helped spur the German women’s team to glory. Likewise, people have been shown to catch money habits from those around them.

How to pay
The word “contactless” made it on the Oxford Dictionary Word of the Year shortlist, in reference to the emerging payment method that allows shoppers to use enabled devices (including money cards and smartphones) to touch and pay. Finextra writes that the last time a fintech-specific term made its way onto the Oxford shortlist was in 2008, when "credit crunch" won.
It is worth noting that making the payment process easier, through contactless and other technology, may alter shoppers’ decision making – as explored in the “pain of paying". It may be sensible for some people to introduce checks to limit overspending.

Magic signals
Influential share market index the Dow Jones Industrial Average closed at a new high of 17,958.79 on 5 December 2014, with the Wall Street Journal earlier writing the index had 18,000 “within its sights” (the sort of magic number that can catch attention and are said to influence trading decisions) and the New York Times reporting on how strong jobs numbers in the US announced that day saw one of the crucial “missing pieces of the economic puzzle” in the recovery start to fall into place. An analysis by ING economists showed that once inflation is taken into account, the “real” rise was only about 10% up from its previous peak in September 1999.

Your pick?
Have your say on the most relevant news here, on Twitter @eZonomics.

eZonomics team
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