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I had a converstaion with Mother down in Tucson about the Stock Market and the $. She said something interesting. That on heavy down days the only buyers of stocks are the companies themselves. Companies are buying back their own shares. Companies don't buy back their own shares unless they consider them to be at a bargain price. She feels that the coming year will be more of the same volatility due to it being an election year, however this is all prelude to a Big Bull Run in 09.

Mother is also a believer in Business cycles and the comment of another stock analyst come to mind when describing Stock Market conditions. " We all know what RE is doing and Bonds at a 4% yield, so what other alternative is there to the stock market?"

With regards to the $$, it seems like the US is in a race to see which currency will be cheaper the Yuan or the $$$. The $$ decline is a reaction to the Chinese reluctance to fairly value their currency and/or let it float on the world market like every other currency. Once the Chinese have their Olympics and get the prestige they feel they so reichly deserve things will move along and the $ will regain some of its strength.