For security purposes, what is your favorite color?

Last week I called my financial institution to wire transfer some money and they asked me to verify my identity with a secret question:  what is your place of birth?  I responded with Williams Lake, followed by my classic joke; well, not actually in the lake, that's just the name of a town in British Columbia.

She didn't laugh, but she proceeded to let me know that they have since upped their security measures.  It seems they have learned that people can easily find out where their clients are born on the Internet.  Go figure.  She needed to have me create a new secret question so she asked:  what is your favorite color?

I thought it was a joke, but it wasn't. And the sad thing is that it reminds me of every single Internet password picking experience I have these days.  First, it goes, pick a password - make it something that no one could ever guess and something that you are not familiar with.  It should involve a number or a letter or sometimes a special character (ugh).  You are reminded that no one should be able to guess your password.  Sounds secure enough, I think, but that's until I read the next part:  in case you forget your password, you should now pick a question with an answer that you know you can remember, like your pet's name or the place you were born (I wasn't actually born in a lake). 

I've never understood that one, and it is perpetuated on every site with no logic to me (someone please explain).  But not my financial institution.  They just pick one question - something that no one could ever find out on the Internet.