Friday assorted links


From the 99 things: "Germany took on rape culture." From what we have seen in Cologne on New Year's and elsewhere, it seems like "took on" may be more accurate in the sense of "acquired."

The entire "99 Things" list is bogus to a degree, and either the result of declining populations using less resources (acid raid for example) or natural processes burning themselves out (decline in syphilis due to older populations; Ebola virus dying out naturally), or spin: "71. Later that month, Israel revealed that it now makes 55% of its freshwater. That means that one of the driest countries on Earth now has more water than it needs" -hahaha! More water than it needs is like saying people have more money than they need. Bogus feel-good story.

Well, they have more than half the water they need right now. B
Rrazil would have acted more decisively.

* Brazil

LOL thanks for clarifying which country you were talking about, Thiago, we'd never have guessed.

You are welcome. One must strive to be correct at all times because "whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much." As an old Brazilian anthem says,

"If it is to be that from brave chests
Our banner will be bloodied
The living blood of the hero Tiradentes
Baptized this bold flag!
Messengers of peace, it is peace for which we yearn,
From love comes our force and power
But in war, in the greatest ordeals
Thou shall see us struggling and victorious!"

This is totally off topic, but anyway .... So the policeman boyfriend of the wife of the Greek Ambassador to Brazil has just murdered the Ambassador because he found out. Always interesting news from the Latin/Greek world. It is like a telenovella actually only involving less realistic people.

But I have to say it made me think of our fake Brazilian Thiago and whatever Ray is. I mean, in a cage fight between our two main trolls, who would win? I think the monster from Alien. The only way to find out is to try.

@SMFS - OT, but I commented on this already in one of the sub-comments a day ago. It's on Greek TV (such small news gets on Greek TV and is blown out of proportion). By contrast, here in Washington DC, this story gets NO press from the local TV news, I think to keep interracial harmony: (black deranged man kills beautiful white yoga teacher, "He also told police that he picked up a prostitute and drove around the city with McCauley’s lifeless body in the back seat, the documents state. When asked why he drove around with the woman in the back seat, Johnson said he thought she was sleeping, the station reports") Not even Steve Sailer is commenting on this one, strange days indeed.

Brazilian press is having field days. So-called passion crimes are virtually unkniwn in Brazil - if I heard of two or three my entire life, it is too much. Probably his political enemies back in the old country put a contract on his life. Such contracts are somewhat common in Brazil, such is human condition. A Brazilian poet, Augusto dos Anjos, wrote a famous poem - every Brazilian knows it by heart - about hunan condition. An excerpt says: "Man, living on such a vile soil, among savage beasts, wishes to become a beast himself". I think the important point is how fast our police solved the case and caught one of them own. In yoyr so-called America, where lots of crimes go ubsolved and the "blue wall" makes virtually impossible to punish bad cops. justice would have never been reached, but the Brazilian people's sense of justice is invincible.

"More water than it needs is like saying people have more money than they need"

Both totally normal things, nothing bogus about it whatsoever. By the way their main desalination company IDE has lots of patents so you should love them right?

It's bogus to say what they said, if you reflect for a moment. But good press. I.D.E has some good I.D.E.AS it seems ("IDE has been awarded a World Technology Award for 2016 by the World Technology Network"). Considering water tech seems to me to be a lot of low lying fruit, I think I.D.E. will capture some rents from patenting stuff that's perhaps 'obvious' as well as actually inventing what laypeople think of when they talk about patents, namely, pioneer patents (which are rare patents indeed, most patents are just industrial design aka 'rent seeking' aka 'troll' patents to the layman).

Bonus trivia: in San Diego (not surprising, dry climate) and in Washington DC (surprising, considering DC gets 3-4" a month of rainfall year round), and in many other big US cities (not NYC as I think the Adirondacks, Catskills, and Hudson water saves them, ditto LA's Sierra water) you drink your neighbors piss, recycled, but with their legal and illegal drugs diluted in the recycled water. Enjoy!

May be Princess Leia's hair style comes from the 4th century BC Lady of Elche

Or Cinnabon...

One of the things I like best about George Lucas is that he recognizes obscure beauty that others miss - the Wolfman Jack in a little radio shed in the midst of a sad lonely midnight California Valley in American Graffitti - the High Renaissance riffs from the prequels - the self-respect of the American equivalent of Voinovich's (mercifully inaccurate) homo sovieticus, Gene Hackman, in the Conversation. Or was that Coppola? In just the last week, I have mixed up Boy George with George Michael, Saint John Bosco with Saint Benedict Joseph de Labre, the river Lot at Estaing with the river Dordogne in another cathedral town, the Battle of the Frontiers with the Angel of Mons Battle, Alito with Scalia, the scent of daisies with the scent of midsummer hay, the color of growing rye with the color of growing barley, Pushkin with Christina Rossetti, my old cellphone with my even older cellphone (thanks Verizon for that stupidly worded robo-call about how my device would no longer be serviced - oh I get it, you wanted me to call you back and say you don't need to send any more snail-mail bills), the funeral of Harry Truman with an alternate version of his funeral where he did not live until the 1970s, my favorite Budd Boetticher scene with my favorite Gecko ad (the one where he is pissed that they dropped him off at the wrong end of the aircraft carrier and he has to spend a whole gecko day walking to the formation which he is supposed to address), Sweeney and Andrew, the tears of Saint Lawrence with the festival of Laurence of Brindisi, and that weird way Morphy kind of complimented his opponents with a short series of midboard winning moves with the weird way that Gould misunderstood Bach. They should not have moved the feast day of Rose of Lima: she didn't care, I don't care, nobody who likes Rose of Lima should care: but still, they should not have done it. But we don't care, I guarantee that:The night is beautiful and God is good. Moy drook - zvezda s zvezdoyu govarit. (Lermontov: my friend, tonight (each star is lost in conversation with another star).

"God is good. It is a Beautiful Night" = Wallace Stevens liked those words enough to publish them, but he was too proud, at that point in his life, to put them in proper iambic pentameter "The night is beautiful and God is good." Dean Giamatti would get it.

Earlier this year, channel surfing (There's Something About Mary, The Tall T, Journal d'un Cure de Campagne, BBC (quickly abandoned), the Rosalindiade, the Weather Channel (hurricanes are bad!), and a dozen more familiar names, I learned that happiness is, far from being elusive, no more than a guaranteed gift for those who know that God loves them. I will try to remember that next time I am stuck in a hurricane with the helpless Ephesian cats and Ephesian dogs whom it has been my fate to be responsible for all these many years. I probably won't remember it - hurricanes are bad - but I will try. Happy New Year to my fellow MR commenters and of course to Tyler and Alex! May no hurricanes trouble your gardens!

Earlier this year, channel surfing (There's Something About Mary, The Tall T, Journal d'un Cure de Campagne, BBC (quickly abandoned), the Rosalindiade, the Weather Channel (hurricanes are bad!), and a dozen more familiar names, I learned that happiness is, far from being elusive, no more than a guaranteed gift for those who know that God loves them. I will try to remember that next time I am stuck in a hurricane with the helpless Ephesian cats and Ephesian dogs whom it has been my fate to be responsible for all these many years. I probably won't remember it - hurricanes are bad - but I will try. Happy New Year to my fellow MR commenters and of course to Tyler and Alex! May no hurricanes trouble your gardens!

3. I don't find this that surprising, but I think there was more an overlap of categories than this describes. The formerly good credit middle class risks were also given "low doc" loans, as their debt to income ratio soared, possibly as they did a "flip" or two on the side.

Free lunch economists caused this thinking: "they acted on this feeling that they were richer because their home was worth more"

In context:

' ' Schoar and her co-authors believe there was an increase in leverage among borrowers of all income levels. Homeowners and investors bought and sold homes at an increasing speed between 2000 and 2006. House flipping was especially pronounced in areas of the country that saw high housing price growth between 2002 and 2006. This is when the Tanners put in their enclosed patio.

' ' “Given that it's such a systemic event across income groups and especially in the middle class, it points to the fact that households as well as banks really believed in this house price appreciation and thought that it was sustainable,” Schoar said in an interview. “And they acted on this feeling that they were richer because their home was worth more. Once the economy slows down, then it becomes tougher for people to pay their mortgages, but also they have less incentive to pay them if the house is underwater. It points to the fact that this was a house price bubble that you could say most people in the economy seem to have bought into.” ' '

Price does not define value. Sorry free lunchers....

You want to increase value, you must put labor into it. Asset churn and price inflation likely destroys value.

One thing that has been rampant since the 80s is higher priced housing with diminishing marginal value.

Ie, a 1200 Sq ft ranch on 1/8th acre at $80,000 vs a 3000 Sq ft split on 1 acre at $300,000 is a value ratio of 1 to 1.8 for most American families. For some it might be 1 to 0.8 because the bigger property goes from asset to burden based on operating costs. Rare is the large family that needs space for 8 people.

3) This article is very one-sided. Mian and Sufi have a series of papers arguing with Schoar et al. One of them is actually also forthcoming in RFS:

"Treating fraudulently overstated income on mortgage applications as true income leads to incorrect conclusions on the nature of the mortgage credit supply expansion toward marginal borrowers from 2002 to 2005. A positive gap between zip-code level income growth calculated from mortgage applications and income growth from the IRS likely reflects mortgage fraud, not an improvement in home-buyer income. In support of the credit supply view, mortgage credit for home purchase expanded significantly more in low credit score neighborhoods on both the extensive and intensive margin from 2002 to 2005, even though these neighborhoods deteriorated on many measures of income prospects."

Mian and Sufi is not a believable story. It's merely speculation without data- surely the people whose income grew would be more likely to buy homes than people whose income did not. It makes the absurd claim that "we show that mortgages
made in high buyer income overstatement zip codes were significantly more likely to be fraudulently
reported as being for an owner-occupied property", as if those with low income were buying multiple homes. It then tries to make an argument about first and second liens, which doesn't take into account home equity loans, without a clear addition strategy. Finally, they simply ignore the point of the Schoar paper, and don't dispute the total credit numbers.

This insane desire to pin the bubble solely on sub-prime is a ridiculous attempt to make the narrative match the exploitation of the poor by big banks. Surely the real story is much simpler-- people buying houses, trying to get rich quick on rising prices, highly leveraged, drive up demand. Investment banks selling mortgages, trying to get richer quicker, highly leveraged, keep up credit supply. Bubble collapses, leveraged participants go under.

Most home (owner occupied) mortgage originations were not for home purchases.

I grew up when there were penalties for paying off mortgages early in lump sum without selling. Paying extra principle seldom triggered penalties, and in fact raised your status with the bank, which expected you to save a lot with them in the future.

What I heard in the mid to late 80s, cooled a bit in the early 90s, and then from mid 90s to the mid 00s was just insane given a home only has one kind of value: providing shelter and comfort, community.

4. The DM says her hairstyle came from Cinnabon:

Radio garden is fantastic

Which is the weakest link in this grab-bag of weak links? The Marginal Counterrevolution Assorted Links are far superior!


#3...When I bought my house in the Bay Area in 1991, it was towards the end of a. Bubble, and I believed I was buying my house at the bottom of a Bubble. At that time, most of the discussion that I remember had to do with demographics and zoning eventually driving housing prices much higher in the near future. However, in the 2000s, many more buyers were telling me something like the following...My retirement funds are not going to be enough for me to live on then. Nor can I save enough money from my wages. Therefore, my only choice is to switch from renting to owning and then using my home equity as a large part of my retirement plan. Some people I knew came close to being panicked by this fear. Add to that fear the fear that, as many people were being told, home prices were not going down from this point for a very long time, there was a desperate felt need to buy a house now. These buyers were all middle class. I can't say I've read much to support my view, truth be told.

I ended up selling my house near the top of the bubble because I was reading that, as housing prices were going up, buyers were putting less money down, and I thought this was bass ackwards. I put down 25 percent. But, also, California had two prior bubbles I knew of and assumed this was another one. I did not think it would be so bad, however. On the contrary, I was sure the government wouldn't allow panicked selling. Oops.

The secret to success DP is to reinvest your money. I hope you did (either in the S&P500 or other real estate). We actually bought at the top of the bubble, in 2006, but it worked out since DC real estate has recovered and surpassed the old highs in this location we bought. As for retirement living, once you get to be old, sell your stuff and move to Ecuador (WSJ had an article on this recently) or similar country (Philippines is also nice, but not as easy as Ecuador or Panama). Honduras if you really want to be cheap, or, where TC is now...AFRICA. TIA!

I'm doing okay, Ray. I'm moving to Victoria BC, next year, a lifelong dream. I hope you have a great new year, Ray, as well as you other MR posters, and you know who you are.

Donald - happy new year to you too. Even though I am not sure that the MR posters you wished a happy new year to know who they are. Whenever I am on a website - a habit I carried over from years of studying poetry - I try to think of what the poster (the poet) would look like if met in a situation of friendship, or at a DMV, or in a POW camp. Or at boot camp (which, unlike a POW camp, I experienced). Then again, one day I asked my elderly aunt, who liked to smoke and who was being harshly criticized about it, if she did - or did not - picture a sunny green tobacco field every time she lit up a cigarette (I was trying to be on her side against the PC prissiness of the other people at our table at a wedding - by the way, the bride and groom are still wife and husband, with multiple grandkids, all these years later). She looked at me with a mix of confusion and condescension - she liked me, but she did not like speech without clarity - and glared and said "No". Without any thought, it was just a reaction. For the record, after all these years of picturing what the poets would be like in this our ugly but beautiful world of 1960-20xx, the only world I know well, I still have only an insufficient idea of who among the poets we remember would be someone I would want to sit next to on a crowded bus. Christina Rossetti, of course; but who knows who else? Anyway, happy New Year.

Cheers, Don

Cheers back at you, from me!

Treading water for 10+ years is not "working out"

#2. That was good. Buried at 30 on the list: "In 1990, more than 60% of people in East Asia lived in extreme poverty. As of 2016, that proportion has dropped to 3.5%."

Staggering. One generation.

Even if you quibble with some of the 99 on the list, to see a list of good things that happened in this shitty year is welcome.

And it was not due to monetarism BD. It was due to the natural forces of capitalism and simply people moving from the countryside to the cities. Also probably undercounting (China fakes how many poor people it has, to show progress).

Of course, Ray. There's a lot more to a car than the lubricant. The real miracle is pulling this off under an inherently destabilizing and debasing fiat currency regime, amirite? No staunch self-respecting 19th century hard money goldbug could countenance this crap.

BD I understand where you're coming from, and I used to think the same, until I concluded money is largely neutral. So fiat money (or hard money) is irrelevant. BTW, reading Rogoff's "Curse of Cash" now, and he, sadly, is still a monetarist who thinks money matters. It doesn't. The election of McKinley vs Bryant was premised on a flawed notion, akin to mass hysteria. Monetarism is even less effective than the Temperance movement.

If it doesn't matter, climb on board with me for a little gentle debasement of the financial assets of inherited wealth 1%er parasites.

I mean, do you think the travails of Southern Europe and Greece in particular have zero to do with being in a monetary union with a tight-fisted country like Germany that is functional enough itself to sack up and impose supply side reforms on its own famously-diligent people? The euro meant these southerners never had a chance.

He pretends that he does think that

RE: rethinking the housing bubble

Paul Willen of the FRB Boston has been making this case but couldn't get anyone to listen. Similarly, watch the charts of the last speaker here.

As per video, the share of mortgage debt going to people with good credit increased throughout the housing bubble. The share of foreclosures made up of defaults on loans to prime borrowers increased during the 2000s generally, and accelerated post 2006. This is inconsistent with the "subprime" view of the bubble and subsequent mortgage crisis. Now that folks from MIT are on board, I expect a more serious re-evaluation of the current subprime consensus. Fingers crossed.

There are many reasons loans default. One is "overlending." That occurs when an otherwise creditworthy borrower is loaned more money than he/she can possibly repay. In addition to the excess liquidity provided buy various GSE's there was an over-reliance on collateral value combined with the superstition that RE prices never (despite prior bubble bursts in living memory) decline. Collateral value is never available when it is most needed. The only reason that every house in Merced, CA was sold at $700,000 was that lenders had money to lend. The lenders/originators then packaged the paper and sold it to FNM/FHLMC.

Housing prices were skyrocketing while disposable incomes and GDP growth were comparatively flat-line.

Two egregious metropolitan statistical area (MSA) examples reported by :Case-Shiller Home Price Index: January 2000 = 100.

Merced, CA (index level YoY % Change) 1Q2004: 184/16%; 1Q2005: 250/36%; 1Q2006: 311/25%; 1Q2007: 273/(12%); 1Q2008: 154/(43%); 1Q2009: 96/(38%); 1Q2010: 98/2%. By the end of 2008 the prices were back down to 2000 levels.

Las Vegas/Paradise, NV (index level/YoY % Change) 1Q2004: 156/29%; 1Q2005: 209/34%; 1Q2006: 229/10%; 1Q2007: 225/(2%); 1Q2008: 165/(27%); 1Q2009: 114/(31%); 1Q2010: 101/12%. By the end of 2009 the prices were back down to 2000 levels.

How in Hell did everybody misdiagnose such bubbles, their unsustainability, and the dire consequences?

Huge increases in housing prices also were the result of too much liquidity provided by the Federal government. The Feds (HUD, FHA, FNMA. FDIC insured deposits, FHLMC, Fed, etc.) juiced the housing bubble and are today propping housing prices.

Takeaway = Now, I see why, since 2009, the government has been killing the middle class.

The theory of how all this comes back to earth, back then, was that the housing prices will stagnate until they catch up with long-term historical trend (annual growth of 1-2% above inflation). The reason was that people don't like selling at a loss, so they'll just withdraw houses from the market rather than selling.

Also, the nationwide housing prices have never dropped YoY, since the great depression (there have been some local bubbles that burst, of course, such as in CA and TX). So, predicting the housing bust was not so easy, after all...

1. Some good news. Much about the environment, environmentalists don't seem aware of it. Tyler's right to note that it's not all good. Germany is embracing anarcho-tyranny, regulating consensual sex while covering up actual rape. Canada is spending 100 million dollars to "curb violence against indigenous women." The link gives a breakdown of how the money will be spent. Since "violence against indigenous women" is overwhelmingly committed by indigenous men, none is going to actually punishing those who commit the violence. Instead, it's all about Jobs for the Boys:

" $80 million to support children, youth and families, including hiring 220 outreach workers.
$15.75 million to prevent human trafficking, expand counselling, and boost supports.
$2.32 million in police and justice reforms, such as better training for officers and Crown attorneys.
$1.15 million for public awareness of violence prevention measures and anti-racism training for civil servants.
$500,000 for improved collaboration with First Nations and Ottawa and a national aboriginal women’s summit later this year.
$750,000 for better data and research to track problems. "

3. One of the big factors in the housing bubble which is IMO unappreciated is how many borrowers with good credit defaulted on their home loans even though they could afford to pay them. Previously, it had been observed by the banks that for a borrower with good credit, if the value of his house sunk, he'd pay back the loan anyway, even if he owed more than the house was worth. These borrowers were treated as if they had virtually no risk of default. But with everyone else defaulting, a lot of them decided to default.

So recently after the attempted (generally well meaning) cultural genocide involving residential schools, any strategy which involved facilitated reserve-to=prison pipelines is not likely to help the situation a whole lot.

While more independent and motivated first nations would be good in a lot of ways, filling capacity gaps in social services may very well get better value for money than following through on the generally expensive "tough on crime" approaches of limited or perhaps even negative results (excluding even considering what they cost).

Also, FYI (not many people know this) - for all the whining about how much funds go to first nations and related issues, in fact per capita funding for basically all relevant services tends to be WAY LOWER (!!) than for other groups. And that is despite being in more rural and expensive locations, as well as generally greater needs according to indicators which first nations groups seem to agree are acceptable in terms of what objectives are implicit in the process of monitoring something (e.g., monitoring water quality implies a desire to eventually solve that problem).

So don't forget, rich kids still get more handouts (in the form of public services) from the government, on average, than indigenous people who probably could use it a lot more.

"Also, FYI (not many people know this)"

Because you just pulled it out of your ass. #fokss

You will find the truth if you look.

@Nony - I work in the environmental field. People in this line of work are aware of those success stories in conservation, and environmentalists even worked to help accomplish them. Thanks!

That may be, but people I know who work in the environmental field still talk about radically shortened life spans, the extinction of the human race, and other things that, if true, would render the good news irrelevant. It's all BS, of course, but it's deeply believed and not just a cover for wanting more enviro-tech employment and bigger foundation grants.

#2. Some of Gary Cohn's thoughts are really good and a couple are not. On bank regulations he is two faced, "“I do think that part of the regulation we’ve gone through has inhibited our ability to transmit that capital. On the other hand, remember U.S. banks today are the strongest banks in the world….That’s a huge competitive advantage for U.S. banks, and I don’t want to lose that.” If the US banks are the strongest in the world why do anything with Dodd-Frank. Perhaps all the conservatives have it wrong and Dodd-Frank is doing exactly what it was designed to do!

“I wish we had more incentives for long-term investing….When you talk about growing the economy, we really do need long-term investment. We need capital that’s willing to be committed for a longer period of time. We need capital that’s willing to be committed through the cycle and rewarding investors that are willing to make those contributions is in everyone’s best interest.” Totally weird in that he said previously that BODs and CEOs have a fiduciary responsibility to shareholders to maximize value. We all know (or should know) what this means. More short term thinking and increased M&A activity. Other than issuing long term bonds which largely is not done these days, how does Mr. Cohn propose committing long term capital?

I think this is one of the better appointments by our President-Elect and probably should have been the Treasury nominee who looks like he will face a difficult confirmation given all the foreclosures the renamed IndyMac did after Mnuchin and others acquired it.

One of the biggest issues with Dodd Frank is it ended start up activity across the entire US.

Bull shit.

You don't even know what Dodd Frank refers to.

#3 maybe there is no bad guy and it was a just a bubble that got popped by a recession

Or maybe as Scott Sumner would say, the fed didn't do its job

"In 2016, some of the world’s biggest diseases, like colon cancer, dementia, and heart disease, started declining in wealthy countries." Mortality following heart attacks has been decreasing in wealthy countries since about 1970. Once you use age-corrected data, the decline in deaths by CHD is extraordinarily dramatic: scroll down to fig 14 in

+1, good one saved for my files. Perhaps CHD was simply a result of people eating too much food as food prices declined dramatically and sugar started being produced abundantly and sold cheaply after WWI.


"34. In June, after years of wrangling, the drive to end female genital mutilation in Africa made a major breakthrough, when the Pan African Parliament endorsed a continent-wide ban."

The ban was endorsed, not enforced. Meanwhile, in the advanced civilization of the US, infant boys have the end of their little peckers chopped off to satisfy an ancient cultural rite now justified on bogus health grounds.

Nah it's just some extra skin on the end, the pecker is still all there. Since you apparently don't know what you are talking about.

Saving the favorite lake of adolescent boys should be number one. :-)

Why does Prof. Jervis keep calling Mr. Schelling, "Tom?"

The Charles G. Koch Charitable Foundation, to which he has given as much as $80 million a year, has focused on "advancing social progress and well-being" through grants to about 150 universities. But in the past, most colleges, including Florida Gulf Coast University in Fort Myers, received just a few thousand dollars.

The big exception has been George Mason University, a public university in Virginia which has received more than $30 million from Koch over the past 20 years. At George Mason, Koch's foundation has underwritten the Mercatus Center, whose faculty study "how institutions affect the freedom to prosper."

"Billionaire's role in hiring decisions at Florida State University raises questions"

Tyler Cowen has a secret black baby!!!

Nothing on the stem cell breakthrough trial at Stanford this past summer? A 70 year old getting up out of his wheel chair or a 45 year old stroke victim who can again raise her arms and speak more normally to her fiance after stem cells were inserted into their brains isn't worthy of being in the top 99?

"#72. McDonalds announced it would be removing corn syrup from its hamburger buns and removed antibiotics from its chicken months ahead of schedule."

Stem cell therapy breakthroughs can't possibly compete with McDonald's removing corn syrup from hamburger buns months. ahead. of. schedule. So... maybe put the stem cell research at #100

#101 Elysium and its seven Nobel laureates showed that in a random trial NR (Nicotinamide Riboside), a Vitamin B3 derivative, raised depleted NAD+ levels in all cells due to aging in humans aged 60 to 80 by 45% at 250mg and 90% at 500mg. Published results of how NR affected blood pressure, glucose levels, lipid levels, pain threshold, etc. in the 120 healthy, non obese people, coming in the new year.

Links or it didn't happen, Todd. You post a lot on this stuff but never with links to back up anything you say.

Google "stem cell breakthrough Stanford." and read the articles. You can also search the name Gary Steinberg.

#2 Why isn't Clinton losing the election not on that list? Probably one of the best outcomes to happen this year.

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