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In the readers comments section of a ZeroHedge article about the poor-reception-unless-you-hold-it-the-magic-way [url=http://www.zerohedge.com/article/apples-latest-fad-lying-its-customers#comments]issues with the iPhone4[/url], reader Michelle has a pithy comment:
[i] "I cannot stand looking around on the roads or at restaurants and seeing people sitting side by side, silently and frantically texting people or surfing the internet and ignoring the people they're actually supposed to be hanging out with."[/i] This echoes the thoughts that occur to me when I see a modern wired couple out on a date together, sitting across the table from each other sharing an intimate conversation,and one of them has a blue-LED-blinking BlueTooth sticking out of one ear. "Of course you`ll always be my number One, honey ... wait, why don`t you go ahead and continue our date without me while I take this REALLY IMPORTANT call..." Mish has a nice synopsis of the latest [url=http://globaleconomicanalysis.blogspot.com/2010/07/hussman-on-misallocating-resources.html]weekly column by John Hussman[/url] - the quote below is all Hussman: [quote]If our only response to excess consumption is to pull out all the stops trying to "stimulate" consumption every time it falters; if our only response to reckless lending is to defend the bondholders every time their poor allocation of capital threatens to produce a loss for them, then quite simply, we will destroy our economy, our future, and our standard of living. The last thing I want to be is a cheerleader for the bears here. But quite honestly, it's difficult to envision a return to long-term saving, productive investment, and thoughtful allocation of capital until - as happens every two or three decades - the speculative elements of Wall Street are crushed to powder. With regard to education, my impression is that the educational sector in the U.S. is about as inflexible the European labor market - the entire structure is hugely inefficient because it is detached from measures of quality and student time-on-task, undercompensating many excellent teachers and at the same time institutionalizing the employment of poor ones. Meanwhile, the failure of parents to maintain a heavy involvement in their kids' education, in the belief that the responsibility for education, personal responsibility and moral development can simply be thrust onto teachers, is a problem that money alone can't address. If we as a nation fail to allow market discipline, to create incentives for research and development, to discourage speculative bubbles, to accumulate productive capital, and to maintain adequate educational achievement and human capital, the real wages of U.S. workers will slide toward those of developing economies. The real income of a nation is identical its real output - one cannot grow independent of the other. [/quote] Robert Reich`s latest piece - this one a long, insightful one - compares the similar patterns of widening wealth inequality which preceded the Great Depression and the current financial/economic crisis: [url=http://robertreich.org/post/805148061/the-root-of-economic-fragility-and-political-anger]The Root of Economic Fragility and Political Anger:[/url] [quote]What we get from widening inequality is not only a more fragile economy but also an angrier politics. When virtually all the gains from growth go to a small minority at the top — and the broad middle class can no longer pretend it’s richer than it is by using homes as collateral for deepening indebtedness — the result is deep-seated anxiety and frustration. This is an open invitation to demagogues who misconnect the dots and direct the anger toward immigrants, the poor, foreign nations, big government, “socialists,” “intellectual elites,” or even big business and Wall Street. The major fault line in American politics is no longer between Democrats and Republicans, liberals and conservatives, but between the “establishment” and an increasingly mad-as-hell populace determined to “take back America” from it. When they understand where this is heading, powerful interests that have so far resisted fundamental reform may come to see that the alternative is far worse.[/quote] [i]My Comment:[/i] Full piece is highly worthwhile, here is his conclusion, but I fear he underestimates the selfishness and sheer ruthlessness of the "powerful interests". I fear that the kinds of avaricious sociopaths running Wall Street, Washington and much of modern-day corporate America will not change their ways - and "our" government has given them precious little reason to - unless confronted by harshly and zealously enforced laws and regulations or literally faced with nooses hanging from lampposts. The more time goes by without the former, the greater the odds of the latter occurring, as part of an unprecedented (at least in post-revolutionary America) breakdown of the social fabric. On the other hand, the cynic in me says that as long as we have all the fast food we can stuff into our fat modern gobs and daily doses of American Idol to keep us pacified, "social unrest" will be something for "socialist countries" like Greece and France. |
A modest proposal
Here's one organization's proposed way for any U.S. citizen or legal resident to [I]personally[/I] alleviate both the unemployment and illegal immigrant problems ([I]but be sure to read the fine print before signing up![/I]):
[URL]http://takeourjobs.org/[/URL] |
US financial reform passed by Senate
[url]http://www.bbc.co.uk/news/business-10654128[/url]
"the most sweeping set of financial reforms since those that followed the Great Depression" if you believe these things. Paul |
Here's a document the Congressional Budget Office whipped up last August:
[URL]http://www.cbo.gov/ftpdocs/102xx/doc10294/08-06-BudgetOptions.pdf[/URL] (3.8Mb) It's a list of "188 options for altering federal spending and revenues" (other than those related to health care or health insurance, which were listed in an earlier document). Note that "altering" includes both increases and decreases (most spending options are decreases; most revenue options are increases) and a few non-fiscal revisions. ("Decreases spending" sometimes means increasing the fees charged for certain services, thus offsetting some spending by the same agency, so that there's a decrease in [I]net[/I] spending.) This document could be useful for discussion ideas -- but please don't limit yourselves to the list of samples below. See the PDF -- it contains figures, descriptions, and discussion of pros and cons for each option. Here's a sampling (25 spending, 25 revenue): [U]Military:[/U] Procure Additional DDG-51 Destroyers to Replace the Canceled DDG-1000s (increases spending) Cancel the Navy and Marine Corps Joint Strike Fighters and Replace with F/A-18E/Fs (decreases spending) Consolidate Military Personnel Costs into a Single Appropriation (revise procedure) [U]Energy:[/U] Eliminate Funding for the Department of Energy’s Nuclear Power 2010 Program (decreases spending) Index the Nuclear Waste Fund Fee to Inflation (decreases spending) [U]Natural Resources and Environment:[/U] Reduce Funding for Timber Sales That Lose Money (decreases spending) Impose Fees That Recover the Costs of Pesticide and New-Chemical Registration (decreases spending) [U]Agriculture:[/U] Reduce Payment Acreage by 1 Percentage Point (decreases spending) Limit the Repayment Period for Export Credit Guarantees (decreases spending) [U]Commerce and Housing Credit:[/U] Permanently Extend the Federal Communications Commission’s Authority to Auction Licenses for Use of the Radio Spectrum (decreases spending) [U]Transportation:[/U] Reduce Highway Funding to Maintain Positive Balances in the Highway Trust Fund (decreases spending) Increase Fees for Aviation Security (decreases spending) [U]Community and Regional Development:[/U] Restrict First-Responder Grants to High-Risk Communities (decreases spending) [U]Education, Training, Employment, and Social Services:[/U] Eliminate Funding for Abstinence-Only Education (decreases spending) Increase Funding for the Education of Children with Disabilities (increases spending) [U]Income Security:[/U] Modify the Formula Used to Set Federal Pensions (decreases spending) Increase Funding for Child Care (increases spending) [U]Social Security:[/U] Link Initial Social Security Benefits to Average Prices Instead of Average Earnings (decreases spending) Lengthen by Three Years the Computation Period for Social Security Benefits (decreases spending) Eliminate the Social Security Lump-Sum Death Benefit (decreases spending) Eliminate Social Security Benefits for Children of Early Retirees (decreases spending) Require State and Local Pension Plans to Share Data with the Social Security Administration (decreases spending) [U]Veterans Benefits and Services:[/U] Reduce Veterans’ Disability Compensation to Account for Social Security Disability Insurance Payments (decreases spending) [U]General Government:[/U] Eliminate General Fiscal Assistance to the District of Columbia (decreases spending) [U] Allowances[/U] (options that cut across programs and agencies and that affect more than one budget function): Raise the Threshold for Coverage Under the Davis-Bacon Act (decreases spending) [U] Revenue Options:[/U] Increase Individual Income Tax Rates (increases revenue) Permanently Extend the Zero and 15 Percent Tax Rates for Capital Gains and Dividends (decreases revenue) Provide Relief from the Individual Alternative Minimum Tax (decreases revenue) Use an Alternative Measure of Inflation to Index Some Portions of the Tax Code (increases revenue) Reduce the Mortgage Interest Deduction or Replace It with a Tax Credit (increases revenue) Limit the Tax Benefit of Itemized Deductions to 15 Percent (increases revenue) Create an Above-the-Line Deduction for Charitable Giving (decreases revenue) Eliminate the Additional Standard Deduction for Elderly and Blind Taxpayers (increases revenue) Include Employer-Paid Premiums for Income-Replacement Insurance in Employees’ Taxable Income (increases revenue) Eliminate the Tax Exclusion for Employment-Based Life Insurance (increases revenue) Include Investment Income from Life Insurance and Annuities in Taxable Income (increases revenue) Tax Social Security and Railroad Retirement Benefits Like Defined-Benefit Pensions (increases revenue) Consolidate Tax Credits and Deductions for Education Expenses (increases revenue) Reduce the Top Corporate Income Tax Rate by 5 Percentage Points (decreases revenue) Set the Corporate Tax Rate at 35 Percent for All Corporations (increases revenue) End the Expensing of Exploration and Development Costs for Extractive Industries (increases revenue) Extend the Period for Recovering the Cost of Equipment Purchases (increases revenue) Repeal the Deduction for Domestic Production Activities (increases revenue) Permanently Extend the Research and Experimentation Tax Credit (decreases revenue) Increase Federal Employees’ Contributions to Pension Plans (increases revenue) Increase Excise Taxes on Motor Fuels (increases revenue) Eliminate the Federal Communications Excise Tax and Universal Service Fund Fees (decreases revenue) Impose a Tax on Emissions of Sulfur Dioxide (increases revenue) Impose an “Upstream” Price on Emissions of Greenhouse Gases (increases revenue) Make Permanent the Tax Credits for Generating Electricity from Renewable Sources (decreases revenue) |
[url=http://www.bloomberg.com/news/2010-07-15/goldman-sachs-to-pay-record-550-million-to-settle-sec-subprime-fraud-suit.html]#Goldman Sachs to Pay $550 Million to Settle SEC Lawsuit[/url]: [i]Goldman to Pay $550 Million to Settle SEC Suit[/url]: [i]Goldman Sachs Group Inc. agreed to pay $550 million and change its business practices to settle U.S. regulatory claims it misled investors in collateralized debt obligations linked to subprime mortgages.[/i]
[quote]The penalty is the largest ever levied by the Securities and Exchange Commission against a Wall Street firm, the agency said in a statement announcing the accord today. Under the deal, Goldman Sachs acknowledged it made a “mistake” and that marketing materials for the instruments had “incomplete information,” the agency said. For Goldman Sachs, the payment amounts to 14 days of earnings, based on first-quarter results. It’s the equivalent of 93 cents a share, said Brad Hintz, an analyst at Sanford Bernstein & Co., who had estimated a cost of $1.05. “This appears to be negligence, not fraud,” Hintz said in an e-mail, citing the SEC’s use of words such as “mistake” and “incomplete information.” “Bottom line the SEC and the administration gets a headline and a ‘political win’ and GS gets an ‘economic win.’” [/quote] [i]My Comment:[/i] That`s right ... letting John Paulson hand-pick a bunch of mortgage-backed securities he deemed most-likely-to-blow-up and bet against them while not disclosing that the Abacus CDO was thus *designed* to implode spectacularly to the dupes you peddled it to was "an honest mistake" ... nothing to see here folks, returning a small percentage of the billions in government welfare for Wall street we`ve gotten in the past 2 years is a small price to pay for no criminal indictments. This latest "laws are for little people" mockery of the constitution brought to you by your friendly Federal-Corporate Kleptocracy. [b]Bloomberg's Simon Johnson[/b] strives mightily to find some good in the Financial Reform Bill: [url=http://www.bloomberg.com/news/2010-07-09/flawed-financial-bill-contains-huge-surprise-simon-johnson.html]Flawed Financial Bill Contains Huge Surprise: Simon Johnson[/url] [quote]The Treasury Department will get the much vaunted “resolution authority” that will in effect allow the Treasury (and the Federal Reserve) to take over and manage the liquidation of any financial firm. This essentially allows a Federal Deposit Insurance Corp.-type closure process for bank holding companies and other entities that do not have insured deposits and therefore aren’t covered by the FDIC. But this authority applies only to firms whose operations are entirely domestic. It doesn’t apply to those that do any type of global business because there is no cross-border resolution mechanism and no prospect that the G-20 will even take up such an idea. [/quote] [i]My Comment:[/i] In other words, the much-touted "resolution authority" is entirely toothless, since every single one of of the mega-finance firms which has the potential to present systemic risk has at least some operations outside the U.S. What a joke. Johnson goes on to pin his hopes on the Kanjorski amendment to the bill: [quote]In essence, Kanjorski proposed that a group of 10 federal regulators be given the explicit power to break up big financial firms when they pose systemic risk. Not only that, the wording of the bill makes it clear that these regulators now face the expectation that they will use these powers. This is a big shift in responsibility, away from the Federal Reserve, which implicitly had all kinds of emergency powers but would never have taken such action. Who are the Kanjorski 10? This is the systemic risk council, which includes the treasury secretary (as chairman), the chairman of the Federal Reserve’s Board of Governors, the director of the new consumer protection agency, the head of Federal Housing Finance Agency, the chair of the National Credit Union Administration board, an individual who will represent insurance regulators and representatives from the each of the four standard federal regulatory agencies. If two thirds of the council’s members agree (i.e., 7 out of 10), then a financial company can be subject to a variety of restrictions, up to and including the requirement that it divest itself of particular activities or more generally break up. ‘Grave Threat’ The criteria for an intervention here are broad, with the key condition being defined clearly and quite sensibly as “a grave threat to the financial stability of the United States.” This is not, of course, the same thing as a legislative requirement that megabanks be subject to a hard size limit -- in effect breaking up the largest six banks -- in order to reduce system risk. That idea was put forward by Democratic Senators Sherrod Brown and Ted Kaufman. It received impressive support on the Senate floor, but ultimately failed, 61-33. [b] The Kanjorski Amendment wasn’t a surprise. It is an entirely reasonable reaction to the too-dangerous-to-fail experience of 2008-2009. The surprise here is that the bank lobbyists weren’t able to get it taken out or entirely watered down.[/b] The supermajority decision-making at the level of the risk council might seem like a weakening from the original Kanjorski proposal, but it also helped keep political support for what is, at its heart, a very radical idea. [/quote] [i]My Comment:[/i] I suspect that the reason the banking lobby "wasn't able" to get the amendment taken out is that once they had gotten the supermajority-clause added,they no longer needed to worry, since they only needed to capture 4 of the 10 council members. Johnson mentions 5 of the 10, and 2 of those [the Treasury Secretary and chair of the FR Board of Governors) are well-known to be tools of Big Finance ... as long as 2 others are either captured or merely loath to stick their necks out and force the breakup of a TBTF, there is nothing for the banking interests to fear. |
Reich: A Mountain of Paper, a Molehill of Reform
Robert Reich`s take on the just-passed financial reform bill:
[url=http://robertreich.org/post/818142564/the-new-finance-bill-a-mountain-of-legislative-paper]The New Finance Bill: A Mountain of Legislative Paper, a Molehill of Reform[/url] [quote]The American people will continue to have to foot the bill for the mistakes of Wall Street’s biggest banks because the legislation does nothing to diminish the economic and political power of these giants. It does not cap their size. It does not resurrect the Glass-Steagall Act that once separated commercial (normal) banking from investment (casino) banking. It does not even link the pay of their traders and top executives to long-term performance. In other words, it does nothing to change their basic structure. And for this reason, it gives them an implicit federal insurance policy against failure unavailable to smaller banks — thereby adding to their economic and political power in the future. The bill contains hortatory language but is precariously weak in the details. The so-called Volcker Rule has been watered down and delayed. Blanche Lincoln’s important proposal that derivatives be traded in separate entities which aren’t subsidized by commercial deposits has been shrunk and compromised. Customized derivates can remain underground. The consumer protection agency has been lodged in the Fed, whose own consumer division failed miserably to protect consumers last time around. On every important issue the legislation merely passes on to regulators decisions about how to oversee the big banks and treat them if they’re behaving badly. But if history proves one lesson it’s that regulators won’t and can’t. They don’t have the resources. They don’t have the knowledge. They are staffed by people in their 30s and 40s who are paid a small fraction of what the lawyers working for the banks are paid. Many want and expect better-paying jobs on Wall Street after they leave government, and so are shrink-wrapped in a basic conflict of interest. And the big banks’ lawyers and accountants can run circles around them by threatening protracted litigation. Why do you think Goldman got off so easily from such serious charges of fraud? Reliance on the discretion of regulators rather than structural changes in the banking system plays directly into the hands of the big banks and their executives and traders who contribute mightily to Democratic and Republican campaigns. The flow of money virtually guarantees that regulatory agencies won’t be adequately staffed to enforce the law, that penalties for violations won’t be overly onerous, and that all loopholes (what’s a “derivative”? what has to be listed on exchanges? exactly how much capital must be on hand for which transactions? How are the various forms of predatory lending to be defined?) will be easily stretched in future years. Wall Street lawyers will have a field day. The profit-for-nothing sector of the economy (law, accounting, finance) will continue to grow buoyantly. Make no mistake: As long as there’s no fundamental change in the structure of Wall Street — as long as the big banks stay as big and are allowed to grow bigger, and have every incentive to invent new financial gimmicks with which to bet other peoples’ money — they will remain too big to fail, and too politically powerful to control.[/quote] |
Bank bailouts bleeding Ireland
[url=http://wallstreet.blogs.fortune.cnn.com/2010/07/19/bank-bailouts-bleeding-ireland/]Bank bailouts bleeding Ireland[/url]: [i]The Irish are finding a bit of belt-tightening can't pay the freight for a giant bank bailout.[/i]
[quote]Moody's downgraded Ireland for the second time in a year Monday. In a familiar refrain, the rating agency pointed to deteriorating government finances and weak growth prospects as the country cleans up after a massive real estate bust. Tight enough for you? Ireland's economy contracted 7% last year, and the nation's debt load as a share of economic output could quadruple by the time the crisis peaks, Moody's said. "Today's downgrade is primarily driven by the Irish government's gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability," said Moody's Dietmar Hornung. A major contributor to that loss of strength is the rising cost of propping up the banking sector. The government moved aggressively during the crisis of 2008 to backstop lenders such as Allied Irish Banks (AIB), adopting policies including a blanket deposit guarantee that kept funds from fleeing the country. The moves succeeded in stabilizing up the banks, but at a staggering cost. Moody's said Ireland has already committed to spending some 25 billion euros ($32 billion) to recapitalize the banks and free them of some of their bad loans. That doesn't sound like much, given that the United States at one point had extended 10 times that amount in support of Citigroup (C). But Ireland's expected outlay amounts to 15% of last year's gross domestic product – and Moody's warns that the figure could yet rise should another bailed out bank, Anglo Irish, need more support as it expects. The rating agency says that in a moderately stressed scenario the government's losses could approach 25% of last year's GDP, and notes that "the uncertainty surrounding final losses would exert additional pressure on the government's financial strength." For comparison's sake, 25% of last year's GDP here would be $3.56 trillion. The grim tidings come in spite of the aggressive moves the Irish government has taken to set its house in order after a long and wasteful property bubble. The government has raised taxes and slashed public sector pay in a bid to restart the economy.[/quote] |
WaPo: A hidden world, growing beyond control
The Washington Post has a major investigative piece on the out-of-control post-9/11 growth of the already-sprawling U.S. intelligence and anti-terrorism industry.
Want to balance the Federal budget? Besides the obvious - slashing the pork added to entitlements spending over the past several decades, firing at least half of government employees over the next decade, stopping acting as the world`s policeman - here`s another ginormous, nontransparent government pork-0barrasle project that would be more effective at its stated mission if it were radically smaller, less redundant and turf-war-riddled and more focused: [url=http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-world-growing-beyond-control/]A hidden world, growing beyond control[/url]: [i]The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.[/i] [quote]These are some of the findings of a two-year investigation by The Washington Post that discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight. [b]After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.[/b] The investigation's other findings include: * Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States. * An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances. [b] * In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings - about 17 million square feet of space. [/b] * Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks. * Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year - a volume so large that many are routinely ignored. These are not academic issues; lack of focus, not lack of resources, was at the heart of the Fort Hood shooting that left 13 dead, as well as the Christmas Day bomb attempt thwarted not by the thousands of analysts employed to find lone terrorists but by an alert airline passenger who saw smoke coming from his seatmate. They are also issues that greatly concern some of the people in charge of the nation's security. "There has been so much growth since 9/11 that getting your arms around that - not just for the CIA, for the secretary of defense - is a challenge," Defense Secretary Robert M. Gates said in an interview with The Post last week.[/quote] [i]My Comment:[/i] This has "colossal government-bureaucratic boondoggle which provides net zero or negative benefit" written all over it. But hey, why worry about deficits when you can paper over them by simply robbing people under the guise of getting them to pay ever-more of their earnings into the holy socialsecurity "trust fund"? [url=http://www.philstockworld.com/2010/07/17/its-the-end-of-the-world-as-we-know-it/]It's the End of the World as We Know It[/url] [quote][b]The 1983 payroll tax hike has generated approximately $2.5 trillion in surplus Social Security revenue which is supposed to be in the trust fund for use in paying for the retirement benefits of the baby boomers. But the trust fund is empty! It contains no real assets. As a result, the government will soon be unable to pay full benefits without a tax increase. Money can be spent or it can be saved. But you can’t do both. Absolutely none of the $2.5 trillion was saved or invested in anything.[/b] That is how the largest theft in the history of the world was carried out. 300M people worked and saved their whole lives to set aside $2.5Tn into a retirement system that, if it were paying a fair compounding rate of 5% interest over 40 years of labor (assuming an even $62Bn a year was contributed), would be worth $8.4Tn today – enough money to give 100M workers $84,000 each in cash! The looting of FICA hid the massive deficits of the last 30 years in the Unified Budget. Presidents and Congresses were able to reduce taxes on the wealthiest Americans without complaint from the deficit hawks, because they benefited. The money went directly from the pockets of average Americans into the pockets of the rich…”[/quote] [i]My Comment:[/i] [Hat tip 'Mike in Nola' over at Ritholtz.com] This cartoon - featuring none other than our ol' pal Alan Greenspan - does a great job explaining the Great Social Security Train Robbery: [url]http://2.bp.blogspot.com/_H2DePAZe2gA/TER_1jnFFVI/AAAAAAAAN0Q/2aQevfr-ur0/s1600/themaestro.jpg[/url] |
Morons
I just heard a Yank burbling on about "qualitative easing"
I don't use the words qualitative or quantitative much these days since (thank god) I gave up ******** chemistry, but I assumed those two words were antonyms. Don't bother to correct me because this shit bores me to tears. |
[quote=ewmayer;222170]The Washington Post has a major investigative piece on the out-of-control post-9/11 growth of the already-sprawling U.S. intelligence and anti-terrorism industry.
< snip > [URL="http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-world-growing-beyond-control/"]A hidden world, growing beyond control[/URL]: [I]The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.[/I][/quote] "Paranoia strikes deep Into your life it will creep It starts when you're always afraid ..." |
[QUOTE=cheesehead;222385]"Paranoia strikes deep
Into your life it will creep It starts when you're always afraid ..."[/QUOTE] davieddy, I think that is your cue. |
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