The National Association of Realtors released the Pending Home Sales Index today.  The index measures housing contract activity and is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes, which is usually one to two months out for most contracts.

The index declined 7.6% from December to 90.4 in January.  Since last January, however, the index is up 12.3%.  The National Association of Realtors blamed the low sales on cold and poor weather conditions which detracted buyers from house shopping.  The cold weather doesn’t quite explain the lower numbers though as the numbers are seasonally adjusted.

An index of 100 is equal to the average level of contract activity during 2001, the first year the index was created. 2001 was also the first of four consecutive record years for existing-home sales. With 2001 as the base year an index of 100 coincides with a historically high level of home sales activity.  It may not be reasonable for the people to expect a level of 100 for this index in the future - at least until the base year reflects a normal market.

The Bureau of Labor Statistics released its employment numbers today - a drop from 10% in December to a 9.7% unemployment rate in January.  A large section of the increase in jobs came from temporary and contract workers sector, which added 52,000 jobs last month.  Factories added 11,000 workers, their first increase since January 2007 and biggest increase since April 2006.  However, the factories increase was largely due to an increase in temporary workers.

Manufacturing may lead the labor-market rebound as it brings in workers to push inventory levels up to a balance, but an increase in temporary workers is not all positive news.  The firms’ decision to take on temporary workers, instead of more permanent ones, is a clear tell on their hand - they don’t have confidence in the future.  Although, it is likely factories will continue to take on workers to approach normal inventory levels, pullbacks are still possible.  If the firms thought it was likely that they would have a continued need for these workers, meaning demand would continue steadily, then they would’ve taken on permanent employees.

President Obama stated this morning, ”These numbers, while positive, are a cause for hope, but not celebration, because far too many of our neighbors and friends and family are still out of work.”  He added the numbers were also likely to fluctuate - touching on the same thought manufacturing firms have, a lack of stability.

The Detroit Auto Show opened today almost a year after US automakers GM and Chrysler went into bankruptcy.  The theme for all automakers this year was small and economical - it seems the US automakers finally got the message.  Honda released its new CR-Z, a sporty hybrid meant to compete with Toyota’s less flashy, but market leading, Prius. The CR-Z unlike other hybrids will be able to cycle between three drive modes: sport, normal and economy.  The sport mode doesn’t come without a consequence as estimates for gas mileage are 36 city/38 highway compared to the Prius’ 51 city/48 highway.

Europe’s second-biggest car make, Peugeot, had its own revelation.  In a statement released today the Paris-based manufacturer reported falling sales of 2.2% for the last year.  Peugeot stated their sales were in a 14% slump in the first half of 2009, but were aided in incentive based programs similar to the US’ Cash for Clunkers.  The execs at Peugeot forecasted a recovery in the auto market outside of Europe, but were more dismal for their home market of Europe.  Peugeot Executive Vice President Jean-Marc Gales prophesied for next year,  ”a single-figure decline is probable, with the drop more like 8 percent than 2 percent.”

In broader news for the day, China reported increased lending for the beginning of 2010 and higher import and export growth for December.  The government seems to be sticking to its stance of support as China’s Finance Minister Xie outlines his viewpoint, “In 2010, active fiscal policies will continue, and this means we cannot weaken the intensity of fiscal support for economic development, avoiding the losses to our achievements that would come from an excessively early exit”

A cash cow is a business or a product that has a large market share in an industry with slow to little growth.  Cash cows usually require little reinvestment of their profits as they are not looking for growth and are only seeking to maintain profits.  The business is given the name cash cow because it is “milked” for its cash.

It is the goal of a business, and especially its marketing department, to transform their business or product into a star or a cash cow.

A cash cow will be found in the bottom left corner of a growth-share matrix where the growth rate is slow and the market share is large.

Are you interested in how money compounds and how if you start saving now you will love yourself in the future? Did you know if you start saving at a young age, after only 10 years you will have more money saved than someone who started saving at 30-years-old to 65-years-old?

So how does someone who puts money away for 10 years have more money in the end than someone who saved for 30 years? Well, say you start off with $1,000 and you get 10% interest each year.

Starting young:

• Year 1: 1,100
• Year 2   3,310
• Year10 (stopped saving)
• Year 20
• Year 40
• year 45 (age 65)

Starting older:

• Year 1: 1,100
• Year 2   3,310
• …….
• Year 35 (age 65)

Now you can see how much it really helps to save early.