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New Headaches For The Dollar

The dollar's strength is creating problems for U.S. companies with big earnings overseas.

Example: Mattel , which today reported that international sales were down 20 percent. However 11 of those 20 points were due to the dollar's strength. A strong dollar lowers the value of profits overseas when the money is brought back into the United States.

The dollar's strength has been helped by the selloff in bonds. Many feel it will continue while the global financial system is under stress. Watch the effect this will have on other companies with big overseas profits (Altria on Wednesday will be a good example).

Retail investors continue to put money into stocks. I told you last week that corporate money---represented by buybacks and insider buying--has been horrendous in January. But this hasn't stopped individuals. Charles Biderman at TrimTabs tells me that from Wednesday the 21st to Wednesday the 28th (when the market rallied 8 percent), there was 8.7 billion in inflows into mutual funds.

In other words, the public is putting money into the market looking for a bottom, but the professional money is not. Guess who usually wins.

Psst! Wanna buy a REALLY cheap laptop?

India is set to unveil a $10 laptop in the next couple days, according to physorg.com. It will be equipped with 2 GB of memory, WiFi, fixed Ethernet, expandable memory, and consume just 2 watts of power.

This would dwarf Nicholas Negroponte's $100 laptop (which is actually $200). The Indian government hopes to make the computers commercially available in the next six months.

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