Mark Carney vs. The Race below Zero

Mark Carney (why does that name sound familiar?), The Current Head of the Bank of England is speaking out against negative interest rates.

While defending ‘monetary stimulus’ he points out that negative interest rates haven’t done much to improve economies and is instead a game of hot potato where everyone loses:

So negative interest rates are effective in only one way: via the exchange rate – or as he says, “via beggar-thy-neighbor” – which might be “an attractive route to boost activity” for an individual country. “But for the world as a whole,” this “transfer of demand weakness elsewhere is ultimately a zero sum game.

Read the full article over at business insider.

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paulb
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http://www.paulboenisch.com

emmi
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emmi

That inventory number puts us right on 2006’s line, right before the crash. Something something slowing volume with non-linearly increasing prices . . .

Confucius
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Confucius

A cautionary tale.

“Around 1624, the Amsterdam man who owned the only dozen specimens was offered 3,000 guilders for one bulb. While there’s no accurate way to render that in today’s greenbacks, the sum was roughly equal to the annual income of a wealthy merchant. (A few years later, Rembrandt received about half that amount for painting The Night Watch.) Yet the bulb’s owner, whose name is now lost to history, nixed the offer.

Who was crazier, the tulip lover who refused to sell for a small fortune or the one who was willing to splurge?”

http://www.businessweek.com/2000/00_17/b3678084.htm

When will the boomers decide they will cash in on their much needed retirement funds?

Shut It Down Already
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Shut It Down Already

Oh, interesting. Nobody has ever mentioned tulips here before.

Saul
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Saul

A jerk, aren’t you one? You should find partner, relax a bit, have some fun…

Shut It Down Already
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Shut It Down Already

Nice first post, Saul. I can see you’re going to fit right in here.

Saul
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Saul

Thanks, if others are tossers like you I don’t think I would hang around for long. Just don’t like wankers being “smart”.

Jimmy
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Jimmy

I read somewhere recently that 2016 is the start of the s-curve for boomer retirement. The problem is the author was suggesting a large percentage will move to our coast now that the snowbird states are too expensive.

patriotz
Member

Because BC is such a bargain? Nonsense. Why would someone give up family and friends to move to Canada’s most expensive province and still get cold (if not so cold as home) winters?

Jimmy
Guest
Jimmy

Retirement cities like Victoria are starting to go vertical. Maybe they’re bringing their family & friends with.

http://www.timescolonist.com/news/local/buying-wave-sparks-bidding-battles-for-victoria-real-estate-1.2188107

Best place on meth
Member
Best place on meth

This is just part of the ripple effect, people in Vancouver are cashing out and moving east, west, north, buying ranches, so on and so forth.

The idiots who kept saying that buyers from China would only affect prices for high end homes on the west side were either clueless or lying.

We have some of those on VCI.

Shut It Down Already
Guest
Shut It Down Already

….and total mortgage debt has remained constant over the last decade, so the only possible explanation for “new” money driving up prices is those pesky foreigners paying cash, right?

Oh wait.

patriotz
Member

Victoria is no longer a retirement city, i.e. a net destination for retirees. It’s also one of the slowest growing metros in the country.

It’s going vertical simply because it’s expensive and entry level buyers can’t afford houses.

http://www.statcan.gc.ca/daily-quotidien/150211/cg-a001-eng.htm

Jimmy
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Jimmy

No, it’s one of the fastest growing metros in the country.

https://www.crd.bc.ca/docs/default-source/crd-document-library/maps/census/victoria-census-metropolitan-area-(cma).pdf?sfvrsn=2

Langford is actually growing much faster than places like Surrey.
(area 11 in the CMA map above)

wwwww
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wwwww

I don’t know patritoz, why did you give up family and friends to move to Canada’s most expensive province?

voter
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voter

Smart man ,this experiment will not work. People need an incentive to produce.

p123
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p123

But they’ll keep on doing it even if it doesn’t work. Japan has had this policy for 2 decades I believe. The FEDs don’t know what to do except for kick the can down the road, so they aren’t left holding the bag and having to deal with the consequences of a bad economy.

This could be played out for a decade as they look for another sector to provide growth so they could stop the low interest rates. It’s best to let the markets crash with higher rates and let things reset so growth occurs naturally again.

p123
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p123

Agree what he says makes sense, only if he followed through while he was the head of Canada. He did a lot of warning but never increased the rates.

space889
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space889

Look at what happened to Swiss when they at first tries to do the right thing. Their currency already having a safe heaven status went through the roof. They end up have to go the most negative of any country trying to curtail hot money inflows.

There is what is morally right, and then there is realty. The two don’t always play nice together.

Local Refugee
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Local Refugee

Donald Trump is going to fix it. He did well tonight…

s22
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s22

ha ha ha he’s the only one that doesn’t think low interest rates are good. Hopefully he understands it fully and gets interest rates back close to normal.

the_midnight_toker
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the_midnight_toker

My good friend called from Alberta today. He has gotten into flipping houses in Edmonton and Regina,Saskatoon. Basically the plan is to find houses that need to be sold fast ( foreclosure, estate sale, divorce, etc ) and need work, make lowball offers. Bring in a crew and fix it up , sell it on within a few months. I hope it works out for him but I’m afraid he may be catching the proverbial “falling knife”. Seeing a lot more alberta license plates here in Vancouver these days.

What do you guys think?

emmi
Guest
emmi

I’ve been getting those flipping houses seminar ads lately. Those ads and the mentality that makes them viable are a harbinger of their own.

I\'m With Stupid v
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I\'m With Stupid v

Tell him to go and fucking die. He is no worse than the Chinese flippers everyone talks about here.

Bubble Tea
Guest
Bubble Tea

Moody’s cuts China outlook to negative
http://www.bbc.com/news/business-35704022
Its offical now, china is in the tank. Bet strict capital control around the corner, no more RE mania in Vancouver.

Hyper-mega-Bull
Member
Hyper-mega-Bull

China already has strict capital controls and money is flooding out of there. Everyone in the country is an expert in gaming the system. When families meet, friends congregate, the topic is how to get the latest freebie, who has a sale on toilet paper, and how to move 10 million out of China.

ostritch
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ostritch

LOL!

Hyper-mega-Bull
Member
Hyper-mega-Bull

more and more locals have given up on the market. more and more, the only participants are offshore buyers, satellite families, and new canadians.

now, mainlanders feel confident enough to openly tell me (a non-chinese person) what i already know, that vancouver is becoming a chinese city.

with business interests (developers) actively discouraging discussion, the local thinking classes and media (left wing) in denial, and politicians not wanting to touch this with a 10 尺 pole HAM and sinofication have no opposition.

Local Refugee
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Local Refugee
Best place on meth
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Best place on meth

The locusts see that Obama is a weakling who won’t stand up to them. These barbarians only understand one thing, brutal force.

Expect them to speed up their nefarious plans before the next president takes office.

Local Refugee
Guest
Local Refugee

Reading comments, suddenly lots of Canadians kinda like him? Is Justin doing something wrong or could be something else?

http://canadaam.ctvnews.ca/trump-will-win-u-s-presidency-prof-predicts-1.2800414

southseacompany
Member
southseacompany

“Have high home prices stalled your ownership dream – or scrapped it?”, Global News

http://globalnews.ca/news/2547988/have-high-home-prices-stalled-your-ownership-dream-or-scrapped-it/

“Have rising real estate prices changed your plans to own a home, or scrapped them altogether? It’s a reality confronting more buyers in the Toronto and Vancouver areas this spring as prices spiral higher and higher.”

“f you’re in this situation, we want to hear from you for an upcoming story.”

“Email(required)

Comment(required)”

bullwhip29
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bullwhip29
Yunak
Member
Yunak

Motherfuckers still shill that bullshit about attractive cities, luxury housing, global investor, etc..

This ranking is nothing but the list of cities that managed to absorb the most dirty money and successfully launder it. It is just list of most corrupted launder-shops and their respective officials taking care of dirty business on the global level.

space889
Member
space889

So basically you are saying that Vancouver is a cesspool cuz dirty money being dirty will always flow to the lowest dirtiest cesspool right? No wonder you people are miserable all day. Not only are you living in piles of shit, you are most likely to be living below the shit surface where you can’t even get the sun & fresh air regularly.

Hit in the cat
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Hit in the cat
patriotz
Member

Thanks for the link. Required reading for anyone who thinks Oz restricts or discourages Chinese RE investment.

Money Laundering
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Money Laundering

Most money is brought here via import and export. Watch the import numbers from China. Fake imports into China and real money leaving China.

Even Garth is having a hard time containing his followers. He is deleting the vast majority of his posts. Doesn’t the even put the word deleted. Sneaky guy but his readers are mostly furious at him for lying.

Scenario: people who don’t work but own $5 million dollar houses, don’t pay MSP, own houses via numbered companies so don’t pay land transfer tax, and clog up the streets for commuters to work., this has to end. Yet have income producing assets overseas.

Your gov is against you. They are just people. If the working class stops paying taxes then the establishment can be brought down.

space889
Member
space889

Are you volunteering to organize and start this movement? I love not having to pay my payroll taxes too, but I like staying out of the jail even more.

ostritch
Member
ostritch

Carney: say one thing; do another. Is he trying to bluff other central bankers out of going to NIRP? What a hypocrite.

patriotz
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Oracle
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Oracle

Us renters are more screwed from what I’m hearing. Trudeau about to announce he is increasing immigration to 1% of population. That is in addition to the 500,000 plus we get as temps per year.

Incredible. This is a free for all. Grab what you can. Be altruistic and you will lose big time. Be greedy.

voter
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voter

He’s got to feed the machine The machine just need’s more and more ,the machine is neither liberal or conservative it’s just the machine and it alway’s need’s more.

space889
Member
space889

That’s why they call Liberals Libertards. Trust fund babies like him are so removed from day to day life of average Canadians that they probably don’t even know what make middle class possible in the first place.

Basically you have the Cons selling out the countries to big money interests on one side, and then you have Liberals that totally f up the country & society in the name of political correctness / progress on the other. All the while ensuring only those rich enough to afford private schools have an actual decent shot at successful jobs & careers. Too bad the sheeples believe they actually have a choice in choose a leader & party that cares about them.

Oracle
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Oracle

Patriotz :

The article says 3 % decrease in prices. Hardly a plunge. Say, how’s your Ottawa house doing in price?

Vancouver houses are going up as much in 3 months as the total value of your house. You are priced out of Vancouver.

So why do you post here. Ulterior motives?

GreenSalad
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GreenSalad
paulb
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Interesting
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Interesting
Join the discuDear Neighbour: Thank you for writing to me about the crisis in Vancouver’s housing market. My office has received an overwhelming amount of correspondence in response to this issue from people all across the province. The sheer volume of letters has meant that I may not have had an opportunity to respond to you personally. But the moving stories we’ve received have convinced me that we need to hold an emergency housing meeting so that we can hear from one another and send out a visual representation of the frustration in our communities across the Lower Mainland, and across the province. As someone who has written, we’re asking for your help to keep the pressure on. We need you to come and show your support to convince the government that this issue is serious, and that they need… Read more »
Piklishi
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Piklishi

Why not charge the Chinese a fee for keeping the houses they buy, empty. This will help the city, help the taxpayers and won’t even do a dent to the money laundry buyers. How about a 10k a year to start. Then every year a 20% increase. Something like the carbon tax…
Second for us, the locals with families who pay inflated property taxes, the government should have a property tax break. Also in our favor the rates should be lower. I don’t mind the rates right now. Helping us pay the mortgage faster.
Third I don’t have anything against immigration. It will help the country in a good way.

wwwww
Guest
wwwww

They lie about everything else, why would they tell the truth about the status of their house? Would you?

patriotz
Member

The answer is not to try to determine whether the house is “empty” or not, but to make all owners of luxury properties pay a suitable level of income tax.

space889
Member
space889

Any residential house that isn’t used as a tax file return address gets slapped with a 100% property tax surtax.. Increase property transfer tax by 1% per million for amounts over $1M to $5M or $10M ceiling. Use those extra taxes and do something useful like reducing income taxes, or properly fund desperately translink projects like replacing Portello bridge.

The best part is most of the people you piss either can’t vote, or is a very small minority, it doesn’t really matter. Granted, you will lose campaign funds from the super rich and RE industry. So, the only party that will do something like that would be the NDP. But then people are going to be complaining about how NDP will ruin the economy, raise taxes, etc, etc, etc

southseacompany
Member
southseacompany

From the UK: “Seven years of low interest rates have ‘cost savers up to £160bn'”, The Telegraph

http://www.theguardian.com/money/2016/mar/02/low-interest-rates-savers-monetary-policy

“Seven years of quantitative easing (QE) and record low interest rates have cost savers an estimated £160bn, but supported strong increases in the prices of property, stocks and bonds.”

“Hargreaves Lansdown said the average mortgage rate had fallen by 31% over that period, saving borrowers £270 a month on a £200,000 repayment. Access to cheap credit has supported the housing market, leading to a 32% rise in prices over the same period.”

ChinaOne
Guest
ChinaOne

I am banned here but I tell truth. My cousin come and keep buy houses. We no pay tax here. We no work here. We enjoy and buy houses.

That’s all. Why me banned?

wwwww
Guest
wwwww

>Why me banned?

Because you’re repetitive, not funny, and don’t give any information of value.

Diadora
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Diadora

Banned?
You are mocking this site and all the readers to it. You are not even Chinese but trying too hard to look like one by using broken english. Get lost. Pope, please ban this idiot right away.

Hyper-mega-Bull
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Hyper-mega-Bull
Hyper-mega-Bull
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Hyper-mega-Bull
Yunak
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Yunak

“Bank of Montreal senior economist Sal Guatieri said both Vancouver and Toronto “are likely benefiting from an influx of foreign wealth.”

https://ozonelaundry.files.wordpress.com/2010/02/money-in-washer.jpg

Confucius
Guest
Confucius

Is that the Challenger?

Yunak
Member
Yunak

Lol, a good one.

space889
Member
space889
space889
Member
space889

Be thankful that a house / flat isn’t a general marriage pre-requisite for a guy yet.

patriotz
Member

Marriage itself isn’t a prerequisite for anything here, so a lot of people don’t get married anyway.

space889
Member
space889

Hmm…I didn’t know most of the local non-Asian women are really only into one night stands, or short term relationships.

Royce McCutcheon
Member
Royce McCutcheon

Wildly missing with an out-of-left-field false-choice non sequitur? Oh my – what a shocking change from your normal posting behavior! Oh wait…

Declines in marriage rates are long standing and well-documented and the opposite of marriage isn’t “one night stands”:
http://well-being.esdc.gc.ca/misme-iowb/.3ndic.1t.4r@-eng.jsp?iid=78#M_1

space889
Member
space889

If you live together for 1 year and have sexual intercourse, you are considered married. So if people aren’t getting married then they either have long term dating non-cohabiting relationships, or short term relationships. What’s so hard to understand about it?

Royce McCutcheon
Member
Royce McCutcheon

“If you live together for 1 year and have sexual intercourse, you are considered married.”

False. You have a common law spouse. And it’s after two years. And you’re the one who made the crack about one night stands.

And I’ll save you some trouble and post your reply:
“Fail to ever rebut the topic at hand! Something something racist! Something that no one was talking about!”

space889
Member
space889

Ok, fine I stand corrected, it’s 2 years then. So I guess 18 months relationship wouldn’t be a short term relationship.

But aside from that, what’s the diff between common law and marriage? Aside from a piece of paper you have to pay for, I don’t see any difference between the two.

patriotz
Member

Well you don’t have to get divorced if either one of you wants to legally marry someone else. That’s a fairly significant difference I think.

Yunak
Member
Yunak

Spaceshit, you should just fuck-off and get lost instead of waiting to get banned. Either you are some kind of pervert or the worst sort of racist misogynist? Disgusting!

space889
Member
space889

Uhm??? When did non-Asian become a race? And when did GRVD non-Asian become a race?

And what do you have against one night stands, or short term relationships? You don’t believe that adults have the right to do agree what kind of relationship they have? Are you some kind of religious nut?

elvince
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elvince

Everytime I visit New-York, I have the same thought: It must be great to be rich here, but it must suck a whole lot to be poor.

For Vancouver, it’s slightly different: It’s quite ok if you’re rich (but let’s be honest, it’s not NY, and it’ll never be NY), but it sucks if you’re middle class now. Being middle class in Van is like being poor anywhere else in the country.

it really didn’t take long for vancouver to change from being a great place to live to a really crappy place to live. I just hope the rest of the country doesn’t follow the same path.

Ulsterman
Member

Agreed. Middle class people are told to go live in the suburbs where they belong, and then they discover a house in Port Coquitlam is still selling for $1m.

space889
Member
space889
Here is a question, a house SFD cost consists of building costs, and land cost. Build costs aren’t really going down cuz labour cost keeps on rising, and we keep getting more and more “green” regulations that really just doesn’t nothing but add costs. So the only things that would go down is materials which isn’t that much in terms of overall costs right now, and land cost. So a Dunbar standard lot is now what? $3M? A 25% crash would still make it above $2M. A 50% crash would make it $1.5M. More affordable if you are a DINK on a $300K/yr household income, which yes, yes, yes I know, every self-respecting bear here is. But not really for say teacher-firefighter, city + provincial employees family. So let’s have a real crash of 75%, that would take land cost… Read more »
Royce McCutcheon
Member
Royce McCutcheon

Gee Space, welcome to the longstanding argument that many have made against putting so many eggs in one basket.

Thanks for your concern, but my household will be fine as I made the decision to seek non-local income a while ago.

But yeah, the big correction that will follow if prices fall anywhere close to back in line with rents or incomes will have massive knock on effects. Most people calling the present situation crazy, reckless, or long-term destructive are very aware of this and it’s one of the reasons they have for opposing the price run-up.

Or you could believe that this was a profound realization on your part.

space889
Member
space889

Oh right, I forgot…bears are perfect forecasters and would never ever let such a trivial thing like collapsing house prices affect them daily lives or financial wellbeing. What was I thinking? Off course, they would have everything all planned and the only hard choices are how much to low bid, and which homeowers balls are they going to enjoy twisting the most.

Royce McCutcheon
Member
Royce McCutcheon

If I was a perfect forecaster I would have predicted the leaders of this region selling out its future a dozen years ago and plunked every penny I had into Vancouver real estate instead of pursuing higher education and a well-paid career.

Also, I have no idea who you are arguing with your response. Seriously – what are you saying?

I said that many people who have a problem with the price run-up have a problem with it in part because you are completely right: a meaningful correction will absolutely decimate our economy and lead to a lot of job loss. I said this has been a key argument for a long time.

And your response is to talk about perfect forecasting? And you think people have a problem with you here because they’re racist? Dude: before anything else, you’re incoherent.

space889
Member
space889

Uhm…the bears here have always maintained that they can’t wait for the crash so they can dance on the home owners grave, spit “I told you so” right in their face, really put the screws to the few lucky surviving ones.

And yes, they do also maintain that their forecasts are totally right, and the market crash in 08 just meant they more than double their money since then.

So, it’s a fair question to ask to them what do they think will happen in a crash.

I don’t see why you are so worked up about it.

elvince
Guest
elvince
So the minimum wage barista gets laid off because the average VanWester can’t afford 5$ coffee anymore. Big loss? Not as far as the barista is concerned… If tomorrow morning, all lands in the COV magically lost 75% of its price (note that I said price, not value; the value of land is irrelevant to its price), I’d say the construction industry would do quite well (average people could now afford average houses, and so on…) and the most hard hit are the ones who lose their jobs and must sell at the new price. Them and their bankers. Retail and service industry would lose some revenue due to impossibility to get even deeper into debt for some people (car dealerships would lose a lot more than dollarama), and that’s pretty much it. Other than that, the damage would be… Read more »
space889
Member
space889

So that big US recession back in 08/09 and the ongoing problems in Spain/Ireland aren’t caused by the big housing bust??

elvince
Guest
elvince

And I dispute the fact that a DINK couple with 300k$ HH income should buy a 1.5M$ house. 3X income is a lot of debt, and DINKs don’t really need a whole lot of house.

How much is the average HH income in Vancouver anyway? Like 90k$? 300k$/yr in Vancouver is the 1%, or at least close to it. Vancouver isn’t London or New-York.

space889
Member
space889

Reading this blog & Garth, it seems every RE bear makes 6 figures with at least a mid-6 figures, if not 7 figures, investment portfolio, especially with all those extra savings from rent.

Diadora
Guest
Diadora

Citizenship revamp: New Canadians no longer have to intend to live in Canada.
In other words, door is open, just launder your dirty money here.

patriotz
Member

Canadian citizens have a constitutional right to leave the country. Making citizenship conditional on staying in the country violates this right.

There are plenty of ways to deal with illicit money other than attacking citizenship rights of everyone.

space889
Member
space889

Right, cuz citizenship is no longer a privilege and an obligation to the country anymore. Those archaic ancient concepts. It’s all about how to game the system and cry poor me when the country fail to show up promptly in a nice cruise ship to haul your ass away from an area known for wars. And how can we forget that a Canadian is a Canadian is a Canadian, even if the said Canadian is a determined terrorist.

Hyper-mega-Bull
Member
Hyper-mega-Bull

this is what you ppl voted for. i know prices are going to keep going up because the people most opposed to HAM don’t even vote according to their own interests.

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