THE ENTERPRISE--TIRED OF READING? WATCH & LISTEN, THEN READ!
We are in the era of the audio-video media, and you will note that the following clips all come from YouTube, but originated in vastly different media formats, from political commercials made for TV, to Cable News broadcasts, to multi-media shows. What do they all have in common. They can be instantly transmitted everywhere, and watched by anyone with a computer or a multi-media smart phone. Unless, however they are broadcast on widespread TV, the millions of people who are either too busy, or too unmotivated, or too poor (to have this kind of access), or too uneducated (to use it), or too adverse to different viewpoints than they currently have --those people will never see them at all. But those millions still vote.
Somebody else shares my opinion of Speaker Pelosi
http://www.youtube.com/watch_popup?v=A6_xgKWzhRw
A "Open Letter" warning to current Democratic leaders
http://www.youtube.com/watch?v=UiM6JAQZwHI
A somewhat extreme but very concerning look at the Health Care bill's content
http://www.youtube.com/watch?v=HcBaSP31Be8
The Revolution has begun. THE MUST WATCH ONE!
http://www.youtube.com/watch?v=7nEoW-P81-0
The geography of a recession (and why it will take 7-10+ years to return to full employment).
http://www.youtube.com/watch?v=G9jBNyysbho
A plea for prayers for the future of America
http://www.greatdanepro.com/Pray For America/index.htm
FOR THOSE WHO STILL WANT TO READ SOMETHING
--Good news & Bad news: Productivity is climbing fast, +6.9%, +8.1% and +7% in the past 3 quarters.
Good news: it makes American business more competitive. Bad news: there is less need to hire or rehire workers.
--Private Label goods always prosper during recessions
Good news: P/L is usually a functionally acceptable option at a lower cost. Bad news: P/L seldom measures up the the branded equivalent, but steals sales. Result: Stores comp sales numbers suffer and the sales revenue to fund innovation at the branded companies is undercut.
--Terrorists captured!
Good news: We have caught some of the bastards and can now extract information and punish them for killing Americans. Bad news: The idiots in the Obama administration want to treat them with kid gloves and give them all the legal rights of US citizens. The Attorney General should be removed from office, if that's who is was behind these lunatic concepts. But Obama needs to "get real" too.
--Want a frightening thought?
A suicide bomber terrorist attacks somewhere and kills President Obama. The result--President Biden--OMIGOD; but what if Biden is with Obama and both are killed. The thought it too awful to put into words--but I will-it would mean we are stuck with President Pelosi. CAN YOU THINK OF A MUCH SCARIER OUTCOME?
Experience? Who needs experience in political office?
American elected the most raw rookie in Barack Obama in modern Presidential history. Good news: He delivers a great speech. Bad news: He had never led or run much of anything of consequence--other than his campaign--which others managed for him. He was the front man, the pretty face, and a shill for the party. New news: Many inexperienced politicians, but experienced in real jobs that add value to society are now running for office. Drafting "political newcomers" is a great idea. They might actually cause positive change instead of jockeying for power and influence to build their political resume--for a while at least.
Finally, some honesty from government officials
When asked by Senate Intelligence Committee Chairman Dianne Feinstein: "What is the likelihood of another terrorist-attempted attack on the US homeland in the next three to six months, high or low?" Good news: The answers had the ring of the cold, hard truth. Bad news: Here are the answers--Dennis Blair, Director of National Intelligence--"An attempted attack, the likelihood is certain I would say." CIA Director Panetta: "I would agree." FBI Director Mueller also agreed.
Budget cutting in Government is an oxymoron--it just seldom or never happens.
Already, when the first words about cutting budgets are whispered, members of both parties react like petulant children hoarding their Trick or Treat candy. GOP'er Shelby of AL is just one example, pulling a Ben Nelson/NB type trick and blackmailing by holding up all Obama nominees unless his state gets some juicy aircraft and service contracts. And the people of AL who don't see the bigger picture just think he's "fighting for them."
AMERICA IS TECHNICALLY BANKRUPT.... And China will the debtor who ultimately forecloses on us. It is already making noise about the US-Taiwan arms deals. YOU READ IT HERE--CHINA WILL BE A BIG USA PROBLEM IN THE NEAR FUTURE...Even if something is done about indebtedness--which it won't be!
The country is "broke!" What do you do at home when you are broke and all your credit cards are maxed out? QUIT SPENDING!
WHEN WILL ANY GOVERNMENT (ELECTED) OFFICIALS FACE THE ENTITLEMENTS PROBLEM?
No elected official and few appointed ones will even mention that something dramatic has to be done about Social Security, and Medicare/Medicaid. Worse yet, the recent Obamacare bills would add to the Medicare and Medicaid burdens both at Federal and State levels. THIS IS BLATANT IRRESPONSIBILITY--MIXED WITH SOME INSANITY.
Is it false hope or a real recovery? "We'll see!"
"Signs of Hope as Jobless Rate Falls," screams the headline. The problem is that a drop in that unemployment rate is misleading. It dropped because so many people gave up and quit looking for jobs. Plus, the real unemployment (U-6, not U-3) and "underemployment rate" is more like 17+%. Read that again: ONE IN 6 AMERICANS OF WORKING AGE ARE EITHER UNEMPLOYED OR UNDEREMPLOYED--AND THAT DOESN'T COUNT THOSE WHO ARE NOT TRYING! Hiring has not yet started up very much again. Job growth is still slightly negative. When hiring does resume and continues a couple of months in a row, then (maybe) Americans realize that sooner or later, taxes on their new income will have to go up to pay for all that spending--sooner or later--because there is no such thing as a "free lunch."
Somebody has to pay for all that unfunded government spending. Raise taxes on banks, and they will pass them on to their customers. Ditto retailers and service businesses. Raise them on oil companies and the increases flow through to the gas pump, the heating plant or by-products (like chemicals and plastics used all through every household. Get the idea? NO FREE LUNCHES!
READ Uncertainty and the Slow Recovery posted below for a great analysis of what happened, why, and what might happen next. Opinions differ and analysis is notable for being off the mark, but this article pinpoints many causes and probably effects that I think are mostly right. Forewarned is forearmed.
Best, John
=============================
Uncertainty and the Slow Recovery
A recession is a terrible time to make major changes in the economic rules of the game.
by Gary S. Becker, Steven J. Davis and Kevin M. Murphy (reprinted from FORECASTS & TRENDS E-LETTER, by Gary D. Halbert, Jan. 26, 2010)
In terms of U.S. output contractions, the so-called Great Recession was not much more severe than the recessions in 1973-75 and 1981-82. Yet recovery from the latest recession has started out much more slowly. For example, real GDP expanded by 7.7% in 1983 after unemployment peaked at 10.8% in December 1982, whereas GDP grew at an unimpressive annual rate of 2.2% in the third quarter of 2009. Although the fourth quarter is likely to show better numbers—probably much better—there are no signs of an explosive take off from the recession.
We believe two factors are behind this rather tepid rebound. An obvious one is the severe financial crisis that precipitated this recession, with many major financial institutions receiving large bailouts from the federal government. The confidence of bankers and venture capitalists has been shattered, at least for a while, and it will take time for them to recover from the financial turmoil of the past couple of years. The household sector also faces a difficult period of financial retrenchment in the wake of a major collapse in home prices, overextended debt positions for many, and high unemployment.
The second factor is less obvious, but possibly also of great importance. Liberal Democrats won a major victory in the 2008 elections, winning the presidency and large majorities in both the House and Senate. They interpreted this as evidence that a large majority of Americans want major reforms in the economy, health-care and many other areas. So in addition to continuing and extending the Bush-initiated bailout of banks, AIG, General Motors, Chrysler and other companies, Congress and President Obama signaled their intentions to introduce major changes in taxes, government spending and regulations—changes that could radically transform the American economy.
The efforts to transform the economy began with a fiscal stimulus package of nearly $800 billion. While some elements served the package’s stated purpose and helped to soften the recession’s impact, the overall package was not well designed to foster a speedy recovery or set the stage for long-term growth. Instead, the “stimulus” was oriented to sectors that liberal Democrats believe are deserving of much greater federal help. This explains why much of the stimulus money is going toward education, health, energy conservation, and other activities that would do little to soak up unemployed resources and stimulate the economy.
In terms of discouraging a rapid recovery, other government proposals created greater uncertainty and risk for businesses and investors. These include plans to increase greatly marginal tax rates for higher incomes. In addition, discussions at the Copenhagen conference and by the president to impose high taxes on carbon dioxide emissions must surely discourage investments in refineries, power plants, factories and other businesses that are big emitters of greenhouse gases.
Congressional “reforms” of the American health delivery system have gone through dozens of versions. The separate bills passed by the House and Senate worry small businesses, in particular. They fear their labor costs will increase because of mandates to spend much more on health insurance for their employees. The resulting reluctance of small businesses to invest, expand and hire harms households as well, because it slows the creation of new jobs and the growth of labor incomes.
The administration also indicated early on that it would take a different approach to antitrust policy, reversing a 30-year trend toward more consumer-based interpretations of antitrust laws. Likewise, the installation of a pay “czar” in Washington is scary, even though his activities are so far confined to companies that received substantial bailout assistance from the Treasury. Perhaps as a next step, Congress will decide that executive pay is too high generally and levy special taxes on bonuses, or impose other controls over executive compensation—as the British and French have done. Congress is also considering major new regulations on consumer financial products.
In its efforts to combat the financial crisis and recession, the Fed created over $1 trillion of excess reserves at banks through various bailout programs and open market operations. When banks draw on these reserves for loans to businesses and households, there is a potential for the money supply to grow rapidly, possibly producing a substantial inflation. How hard the Fed will fight inflationary pressures through open market sales and other actions that raise interest rates is a significant source of uncertainty about future inflation and about the potential for monetary policy tightening to choke off the recovery.
The uncertainty about monetary policy has important political dimensions as well. The Fed now faces greater political pressures than at any other time in the past quarter century, as seen from the grilling the Senate Banking committee gave to Fed Chairman Ben Bernanke in deciding whether to approve his reappointment. These pressures may intensify greatly if, and when, future Fed actions to restrain inflation conflict with politicians’ desires to prop up housing and the major government enterprises enmeshed in housing finance.
Even though some of the proposed antibusiness policies might never be implemented, they generate considerable uncertainty for businesses and households. Faced with a highly uncertain policy environment, the prudent course is to set aside or delay costly commitments that are hard to reverse. The result is reluctance by banks to increase lending—despite their huge excess reserves—reluctance by businesses to undertake new capital expenditures or expand work forces, and decisions by households to postpone major purchases. [Emphasis added, GDH.]
Several pieces of evidence point to extreme caution by businesses and households. A regular survey by the National Federation of Independent Businesses (NFIB) shows that recent capital expenditures and near-term plans for new capital investments remain stuck at 35-year lows. The same survey reveals that only 7% of small businesses see the next few months as a good time to expand. Only 8% of small businesses report job openings, as compared to 14%-24% in 2008, depending on month, and 19%-26% in 2007.
The weak economy is far and away the most prevalent reason given for why the next few months is “not a good time” to expand, but “political climate” is the next most frequently cited reason, well ahead of borrowing costs and financing availability. The authors of the NFIB December 2009 report on Small Business Economic Trends state: “the other major concern is the level of uncertainty being created by government, the usually [sic] source of uncertainty for the economy. The ‘turbulence’ created when Congress is in session is often debilitating, this year being one of the worst. . . . There is not much to look forward to here.”
Government statistics tell a similar story. Business investment in the third quarter of 2009 is down 20% from the low levels a year earlier. Job openings are at the lowest level since the government began measuring the concept in 2000. The pace of new job creation by expanding businesses is slower than at any time in the past two decades and, though older data are not as reliable, likely slower than at any time in the past half-century. While layoffs and new claims for unemployment benefits have declined in recent months, job prospects for unemployed workers have continued to deteriorate. The exit rate from unemployment is lower now than any time on record, dating back to 1967.
According to the Michigan Survey of Consumers, 37% of households plan to postpone purchases because of uncertainty about jobs and income, a figure that has not budged since the second quarter of 2009, and one that remains higher than any previous year back to 1960.
These facts suggest that it was a serious economic mistake to press for a hasty, major transformation of the U.S. economy on the heels of the worst financial crisis in decades. A more effective approach would have been to concentrate first on fighting the recession and laying solid foundations for growth.
They should have put plans to re-engineer the economy on the back burner, and kept them there until the economy emerged fully from the recession and returned to robust growth. By failing to adopt a measured approach to economic policy, Congress and the president may be slowing the economic recovery, and thereby prolonging the distress from the recession. [Emphasis added, GDH.]
We are in the era of the audio-video media, and you will note that the following clips all come from YouTube, but originated in vastly different media formats, from political commercials made for TV, to Cable News broadcasts, to multi-media shows. What do they all have in common. They can be instantly transmitted everywhere, and watched by anyone with a computer or a multi-media smart phone. Unless, however they are broadcast on widespread TV, the millions of people who are either too busy, or too unmotivated, or too poor (to have this kind of access), or too uneducated (to use it), or too adverse to different viewpoints than they currently have --those people will never see them at all. But those millions still vote.
Somebody else shares my opinion of Speaker Pelosi
http://www.youtube.com/watch_popup?v=A6_xgKWzhRw
A "Open Letter" warning to current Democratic leaders
http://www.youtube.com/watch?v=UiM6JAQZwHI
A somewhat extreme but very concerning look at the Health Care bill's content
http://www.youtube.com/watch?v=HcBaSP31Be8
The Revolution has begun. THE MUST WATCH ONE!
http://www.youtube.com/watch?v=7nEoW-P81-0
The geography of a recession (and why it will take 7-10+ years to return to full employment).
http://www.youtube.com/watch?v=G9jBNyysbho
A plea for prayers for the future of America
http://www.greatdanepro.com/Pray For America/index.htm
FOR THOSE WHO STILL WANT TO READ SOMETHING
--Good news & Bad news: Productivity is climbing fast, +6.9%, +8.1% and +7% in the past 3 quarters.
Good news: it makes American business more competitive. Bad news: there is less need to hire or rehire workers.
--Private Label goods always prosper during recessions
Good news: P/L is usually a functionally acceptable option at a lower cost. Bad news: P/L seldom measures up the the branded equivalent, but steals sales. Result: Stores comp sales numbers suffer and the sales revenue to fund innovation at the branded companies is undercut.
--Terrorists captured!
Good news: We have caught some of the bastards and can now extract information and punish them for killing Americans. Bad news: The idiots in the Obama administration want to treat them with kid gloves and give them all the legal rights of US citizens. The Attorney General should be removed from office, if that's who is was behind these lunatic concepts. But Obama needs to "get real" too.
--Want a frightening thought?
A suicide bomber terrorist attacks somewhere and kills President Obama. The result--President Biden--OMIGOD; but what if Biden is with Obama and both are killed. The thought it too awful to put into words--but I will-it would mean we are stuck with President Pelosi. CAN YOU THINK OF A MUCH SCARIER OUTCOME?
Experience? Who needs experience in political office?
American elected the most raw rookie in Barack Obama in modern Presidential history. Good news: He delivers a great speech. Bad news: He had never led or run much of anything of consequence--other than his campaign--which others managed for him. He was the front man, the pretty face, and a shill for the party. New news: Many inexperienced politicians, but experienced in real jobs that add value to society are now running for office. Drafting "political newcomers" is a great idea. They might actually cause positive change instead of jockeying for power and influence to build their political resume--for a while at least.
Finally, some honesty from government officials
When asked by Senate Intelligence Committee Chairman Dianne Feinstein: "What is the likelihood of another terrorist-attempted attack on the US homeland in the next three to six months, high or low?" Good news: The answers had the ring of the cold, hard truth. Bad news: Here are the answers--Dennis Blair, Director of National Intelligence--"An attempted attack, the likelihood is certain I would say." CIA Director Panetta: "I would agree." FBI Director Mueller also agreed.
Budget cutting in Government is an oxymoron--it just seldom or never happens.
Already, when the first words about cutting budgets are whispered, members of both parties react like petulant children hoarding their Trick or Treat candy. GOP'er Shelby of AL is just one example, pulling a Ben Nelson/NB type trick and blackmailing by holding up all Obama nominees unless his state gets some juicy aircraft and service contracts. And the people of AL who don't see the bigger picture just think he's "fighting for them."
AMERICA IS TECHNICALLY BANKRUPT.... And China will the debtor who ultimately forecloses on us. It is already making noise about the US-Taiwan arms deals. YOU READ IT HERE--CHINA WILL BE A BIG USA PROBLEM IN THE NEAR FUTURE...Even if something is done about indebtedness--which it won't be!
The country is "broke!" What do you do at home when you are broke and all your credit cards are maxed out? QUIT SPENDING!
WHEN WILL ANY GOVERNMENT (ELECTED) OFFICIALS FACE THE ENTITLEMENTS PROBLEM?
No elected official and few appointed ones will even mention that something dramatic has to be done about Social Security, and Medicare/Medicaid. Worse yet, the recent Obamacare bills would add to the Medicare and Medicaid burdens both at Federal and State levels. THIS IS BLATANT IRRESPONSIBILITY--MIXED WITH SOME INSANITY.
Is it false hope or a real recovery? "We'll see!"
"Signs of Hope as Jobless Rate Falls," screams the headline. The problem is that a drop in that unemployment rate is misleading. It dropped because so many people gave up and quit looking for jobs. Plus, the real unemployment (U-6, not U-3) and "underemployment rate" is more like 17+%. Read that again: ONE IN 6 AMERICANS OF WORKING AGE ARE EITHER UNEMPLOYED OR UNDEREMPLOYED--AND THAT DOESN'T COUNT THOSE WHO ARE NOT TRYING! Hiring has not yet started up very much again. Job growth is still slightly negative. When hiring does resume and continues a couple of months in a row, then (maybe) Americans realize that sooner or later, taxes on their new income will have to go up to pay for all that spending--sooner or later--because there is no such thing as a "free lunch."
Somebody has to pay for all that unfunded government spending. Raise taxes on banks, and they will pass them on to their customers. Ditto retailers and service businesses. Raise them on oil companies and the increases flow through to the gas pump, the heating plant or by-products (like chemicals and plastics used all through every household. Get the idea? NO FREE LUNCHES!
READ Uncertainty and the Slow Recovery posted below for a great analysis of what happened, why, and what might happen next. Opinions differ and analysis is notable for being off the mark, but this article pinpoints many causes and probably effects that I think are mostly right. Forewarned is forearmed.
Best, John
=============================
Uncertainty and the Slow Recovery
A recession is a terrible time to make major changes in the economic rules of the game.
by Gary S. Becker, Steven J. Davis and Kevin M. Murphy (reprinted from FORECASTS & TRENDS E-LETTER, by Gary D. Halbert, Jan. 26, 2010)
In terms of U.S. output contractions, the so-called Great Recession was not much more severe than the recessions in 1973-75 and 1981-82. Yet recovery from the latest recession has started out much more slowly. For example, real GDP expanded by 7.7% in 1983 after unemployment peaked at 10.8% in December 1982, whereas GDP grew at an unimpressive annual rate of 2.2% in the third quarter of 2009. Although the fourth quarter is likely to show better numbers—probably much better—there are no signs of an explosive take off from the recession.
We believe two factors are behind this rather tepid rebound. An obvious one is the severe financial crisis that precipitated this recession, with many major financial institutions receiving large bailouts from the federal government. The confidence of bankers and venture capitalists has been shattered, at least for a while, and it will take time for them to recover from the financial turmoil of the past couple of years. The household sector also faces a difficult period of financial retrenchment in the wake of a major collapse in home prices, overextended debt positions for many, and high unemployment.
The second factor is less obvious, but possibly also of great importance. Liberal Democrats won a major victory in the 2008 elections, winning the presidency and large majorities in both the House and Senate. They interpreted this as evidence that a large majority of Americans want major reforms in the economy, health-care and many other areas. So in addition to continuing and extending the Bush-initiated bailout of banks, AIG, General Motors, Chrysler and other companies, Congress and President Obama signaled their intentions to introduce major changes in taxes, government spending and regulations—changes that could radically transform the American economy.
The efforts to transform the economy began with a fiscal stimulus package of nearly $800 billion. While some elements served the package’s stated purpose and helped to soften the recession’s impact, the overall package was not well designed to foster a speedy recovery or set the stage for long-term growth. Instead, the “stimulus” was oriented to sectors that liberal Democrats believe are deserving of much greater federal help. This explains why much of the stimulus money is going toward education, health, energy conservation, and other activities that would do little to soak up unemployed resources and stimulate the economy.
In terms of discouraging a rapid recovery, other government proposals created greater uncertainty and risk for businesses and investors. These include plans to increase greatly marginal tax rates for higher incomes. In addition, discussions at the Copenhagen conference and by the president to impose high taxes on carbon dioxide emissions must surely discourage investments in refineries, power plants, factories and other businesses that are big emitters of greenhouse gases.
Congressional “reforms” of the American health delivery system have gone through dozens of versions. The separate bills passed by the House and Senate worry small businesses, in particular. They fear their labor costs will increase because of mandates to spend much more on health insurance for their employees. The resulting reluctance of small businesses to invest, expand and hire harms households as well, because it slows the creation of new jobs and the growth of labor incomes.
The administration also indicated early on that it would take a different approach to antitrust policy, reversing a 30-year trend toward more consumer-based interpretations of antitrust laws. Likewise, the installation of a pay “czar” in Washington is scary, even though his activities are so far confined to companies that received substantial bailout assistance from the Treasury. Perhaps as a next step, Congress will decide that executive pay is too high generally and levy special taxes on bonuses, or impose other controls over executive compensation—as the British and French have done. Congress is also considering major new regulations on consumer financial products.
In its efforts to combat the financial crisis and recession, the Fed created over $1 trillion of excess reserves at banks through various bailout programs and open market operations. When banks draw on these reserves for loans to businesses and households, there is a potential for the money supply to grow rapidly, possibly producing a substantial inflation. How hard the Fed will fight inflationary pressures through open market sales and other actions that raise interest rates is a significant source of uncertainty about future inflation and about the potential for monetary policy tightening to choke off the recovery.
The uncertainty about monetary policy has important political dimensions as well. The Fed now faces greater political pressures than at any other time in the past quarter century, as seen from the grilling the Senate Banking committee gave to Fed Chairman Ben Bernanke in deciding whether to approve his reappointment. These pressures may intensify greatly if, and when, future Fed actions to restrain inflation conflict with politicians’ desires to prop up housing and the major government enterprises enmeshed in housing finance.
Even though some of the proposed antibusiness policies might never be implemented, they generate considerable uncertainty for businesses and households. Faced with a highly uncertain policy environment, the prudent course is to set aside or delay costly commitments that are hard to reverse. The result is reluctance by banks to increase lending—despite their huge excess reserves—reluctance by businesses to undertake new capital expenditures or expand work forces, and decisions by households to postpone major purchases. [Emphasis added, GDH.]
Several pieces of evidence point to extreme caution by businesses and households. A regular survey by the National Federation of Independent Businesses (NFIB) shows that recent capital expenditures and near-term plans for new capital investments remain stuck at 35-year lows. The same survey reveals that only 7% of small businesses see the next few months as a good time to expand. Only 8% of small businesses report job openings, as compared to 14%-24% in 2008, depending on month, and 19%-26% in 2007.
The weak economy is far and away the most prevalent reason given for why the next few months is “not a good time” to expand, but “political climate” is the next most frequently cited reason, well ahead of borrowing costs and financing availability. The authors of the NFIB December 2009 report on Small Business Economic Trends state: “the other major concern is the level of uncertainty being created by government, the usually [sic] source of uncertainty for the economy. The ‘turbulence’ created when Congress is in session is often debilitating, this year being one of the worst. . . . There is not much to look forward to here.”
Government statistics tell a similar story. Business investment in the third quarter of 2009 is down 20% from the low levels a year earlier. Job openings are at the lowest level since the government began measuring the concept in 2000. The pace of new job creation by expanding businesses is slower than at any time in the past two decades and, though older data are not as reliable, likely slower than at any time in the past half-century. While layoffs and new claims for unemployment benefits have declined in recent months, job prospects for unemployed workers have continued to deteriorate. The exit rate from unemployment is lower now than any time on record, dating back to 1967.
According to the Michigan Survey of Consumers, 37% of households plan to postpone purchases because of uncertainty about jobs and income, a figure that has not budged since the second quarter of 2009, and one that remains higher than any previous year back to 1960.
These facts suggest that it was a serious economic mistake to press for a hasty, major transformation of the U.S. economy on the heels of the worst financial crisis in decades. A more effective approach would have been to concentrate first on fighting the recession and laying solid foundations for growth.
They should have put plans to re-engineer the economy on the back burner, and kept them there until the economy emerged fully from the recession and returned to robust growth. By failing to adopt a measured approach to economic policy, Congress and the president may be slowing the economic recovery, and thereby prolonging the distress from the recession. [Emphasis added, GDH.]
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