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<title><![CDATA[Comments for entry "Vast Left Wing Conspiracies" at Dilbert.com Blog]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/123]]></link>
<description><![CDATA[Regular thoughts and updates from Dilbert.com]]></description>
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<title><![CDATA[Comment  from George_Frost]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/12380]]></link>
<description><![CDATA[Fact check.org claims there is plenty of blame to go around...including the Clinton Administration.

http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html

From thehill.com (http://thehill.com/leading-the-news/clinton-rejects-blame-for-financial-crisis-2008-09-25.html):

He [Clinton] also acknowledged that there was possible danger in his administrationâ€™s policy of pressing Fannie Mae, the mortgage company, to lower its credit standards for lower- and middle-income families seeking homes.

â€œI think, through the lens of this, it looks like that was true,â€ Clinton said. â€œBut let's go back to where we were at the time. At the time, they had lots of money, were making lots of money, and I thought too much of the money was being given out in value to the shareholders and compensation to the executives. And, at the time, we had a balanced budget and a surplus and a rapidly growing economy in other areas.â€ 
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<title><![CDATA[Comment  from falsedeity]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/12084]]></link>
<description><![CDATA[Scott,

Here is something that you might find interesting. 

http://www.slate.com/id/2201641/

It is on blaming the poor for the collapse of the economy in relation to the housing market.]]></description>
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<title><![CDATA[Comment  from supermomma4]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11858]]></link>
<description><![CDATA[You had asked for an article to confirm what you'd read in a New York Post article.  Check out this article from the New York times that was published in September of 1999.  That looks like a lot of proof to me.

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&amp;sec=&amp;spon=&amp;partner=permalink&amp;exprod=permalink]]></description>
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<title><![CDATA[Comment  from Brant]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11787]]></link>
<description><![CDATA[Presumably they're trying to pin everything on the C.R.A. (Community Re-investment Act). Here's a study which finds that the CRA actually made banks less likely to make bad loans and more likely to charge lower interest:

http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf]]></description>
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<title><![CDATA[Comment  from KevinKunreuther]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11570]]></link>
<description><![CDATA[I'm praying this news report from CNN I'm, posting doesn't turn to gobbledygook.Essentially a good reason WHY GOVERNMENT TAX MONEY SHOULDN'T BE USED TO BAILOUT FAILED FINANCIAL INSTITUTIONS.

Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A
Libertarian, he was one of 166 academic economists who signed a letter to congressional
leaders last week opposing the government bailout plan., Massachusetts (CNN) --

Congress has balked at the Bush administration' s proposed $700 billion bailout of Wall
Street. Under this plan, the Treasury would have bought the &quot;troubled assets&quot; of financial
institutions in an attempt to avoid economic meltdown.

This bailout was a terrible idea. Here's why.

The current mess would never have occurred in the absence of ill-conceived federal
policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970;
these two mortgage lending institutions are at the center of the crisis. The government
implicitly promised these institutions that it would make good on their debts, so Fannie
and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century,
Congress pushed mortgage lenders and Fannie/Freddie to expand sub-prime lending. The
industry was happy to oblige, given the implicit promise of federal backing, and sub-prime
lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This
lending was a wholesale abandonment of reasonable lending practices in which borrowers
with poor credit characteristics got mortgages they were ill-equipped to handle.

Once housing prices declined and economic conditions worsened, defaults and
delinquencies soared, leaving the industry holding large amounts of severely depreciated
mortgage assets.

The fact that government bears such a huge responsibility for the current mess means any
response should eliminate the conditions that created this situation in the first place, not
attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare
bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors
own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as
has occurred with several airlines). Bankruptcy punishes those who took excessive risks
while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly
engaged in risky sub-prime lending. Thus, the bailout encourages companies to take large,
imprudent risks and count on getting bailed out by government. This &quot;moral hazard&quot;
generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a
bailout is necessary to prevent economic collapse. According to this view, lenders are not
making loans, even for worthy projects, because they cannot get capital. This view has a
grain of truth; if the bailout does not occur, more bankruptcies are possible and credit
conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions
cannot make productive loans, a profit opportunity exists for someone else. This might
not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers
will not sell their lousy assets for 20 cents on the dollar if the government might pay 30,
50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The
administration' s claim is that many mortgage assets are merely illiquid, not truly
worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them,
and they would do so if the owners would accept fair market value. Far more likely is that
current owners have brushed under the rug how little their assets are worth.

The bailout has more problems. The final legislation will probably include numerous side
conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as
they shuffle their assets and position their balance sheets to maximize their take. The
bailout will open the door to further federal meddling in financial markets.

So what should the government do? Eliminate those policies that generated the current
mess. This means, at a general level, abandoning the goal of home ownership
independent of ability to pay. This means, in particular, getting rid of Fannie Mae and
Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks
into sub-prime lending.

The right view of the financial mess is that an enormous fraction of sub-prime lending
should never have occurred in the first place. Someone has to pay for that. That someone
should not be, and does not need to be, the U.S. taxpayer.
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<title><![CDATA[Comment  from rrassoc]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11517]]></link>
<description><![CDATA[I do agree to some extent that blame rests with the Clinton administration, and in part the Bush administration.  But I have no doubt that the majority of responsibiltiy rests with the congress, particularly the liberal democrats, but also with the weak republicans who cannot make a case for sticking to their apparent conservative principles.  I also blame the media to some extent for turning away from true investigative journalism.

Where is the mainstream reporting of the democrats' liberal policies of steering Freddie/Fannie toward revising mortgage policies to help people get mortgages (sorry-homes) that they could not afford?  Where is the reporting of McCain's warnings 2-3 years ago, pushing for reforms, that the dem's vetoed?  Where is it reported that Obama was one of the dem's that failed to act?  Where is it reported that Obama keeps blaming McCain as part of the problem though?

Of course, the same policies that made it easy for poor people to get loans made it very easy for everyone else to speculate on more expensive properties, resulting in the real estate bubble that ended up bursting when everybody figured it would simply deflate.

The Hot Air blog has done a great job of pulling the pieces together: http://hotair.com/archives/2008/09/17/mccains-attempt-to-fix-fannie-mae-freddie-mac-in-2005/

Follow the links to references.  Note that Obama is also #2 on the list of recipients of funding from Freddie &amp; Fannie and their employees.   I am not interested in listening to someone publicly blame somebody else for something when the actual records say the opposite.  Where I come from, that's LYING.]]></description>
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<title><![CDATA[Comment  from olivaw]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11516]]></link>
<description><![CDATA[I think a fairly balanced view of the situation is provided today by a New York Times financial reporter, Floyd Norris.

The link to this article is below. The gist is that although many factors led to this problem, the real problem is what Norris calls &quot;unregulation&quot;.

That is, the financial services industry invented a variety of new products that ostensibly eliminated the risk of issuing numerous subprime mortgages, and these new, complicated products were not subject to adequate regulation. There was not really &quot;degregulation&quot; in that these products had never been regulated because they hadn't existed before. 

Unfortunately, these new products did not in fact eliminate the systemic risk of a housing price crash, and we are now seeing the costs of two failures: (1) the failure of the private finance community to adequately analyze risk; (2) the failure of governmental authorities to adequately regulate new financial instruments. 

The revised bailout bill is the least worst of the politically feasible alternatives. In the end, if this is managed well, the net cost of this to taxpayers will be much less than $700 billion, probably more like $100 to $200 billion. But this cost is far less than the cost of a credit freeze and double digit unemployment for 3 to 5 years. We will have a recession even with this bailout; however, the bailout will help avert a much more severe recession.

Floyd Norris article:

http://www.nytimes.com/2008/09/29/business/29norris.html]]></description>
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<title><![CDATA[Comment  from KevinKunreuther]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11510]]></link>
<description><![CDATA[1.) Another essay I was proud of eaten by this excremental blogging software. I would be happy, and I'm sure others would be happy, too, if you shut down this blog for a week or two weeks to replaced the current with something that allowed one to preview their work before they posted, allow simple html, including embed links, and didn't logout people after a certain time, so people wouldn't lose the posts they've crafted and worked on.

2.) I'm too steamed and depressed to recall what I wrote, so here is a couple of links to editorial cartoonist and writer Ted Rall's latest rant ( http://news.yahoo.com/s/ucru/20080925/cm_ucru/bushcongresspartylikeits1929 ) and a nice analogy and simple plan by Robert X Cringely ( http://www.pbs.org/cringely/pulpit/2008/pulpit_20080926_005422.html )

3.) Personally, I believe it's short sighted, greedy myopic businesses and government people with Fed, Fannie Mae, Freddie Mac, congresspeople and senators from both parties and lobbyists from investment and savings banks who fomented this miasma. Alan Greenspan allowed it to ride, because of fear of a R E C E S S I O N .  
4.) Instead of flushing $700 Billion (a number pulled out of the fundament of a government economist) down the hole, I'd rather the money was invested towards something tangible that would truly benefit the American people, like a universal Western European style health care care system or nationalizing the energy industry.]]></description>
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<title><![CDATA[Comment  from TinaKubala]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11507]]></link>
<description><![CDATA[Just a question: Is your friend very lonely in his Republicanism? Or is he lonely in general?  

I have the first problem. Haven't had the second since high school.]]></description>
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<title><![CDATA[Comment  from FreemonSandlewould]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11499]]></link>
<description><![CDATA[duh!  the mainstream media is on the left / unDemocrat side.   Or are you one of those nutjobs who thinks the media is not in the tank for Obama ? 

Surely this guy is partially correct.  The main explanation for all this however is interest rates were effectively 0% or negative for a very very long time.  This will always lead to speculation.   However each political party likes them low as they borrow time ahead of the curve to pump up the economy.  Its not unlike amphetamine usage.  Today you feel all peppy but just wait until tomorrow.

That being said liberals / socialist / communist / unDemocrats suck.  They always will.  The higher your IQ the more likely you are a liberTarian.   We liberaTarians don't use coercion.  If a policy is good then you won't need to force anyone to do anything.   Taxes are an example of where we're forced.  I can very easily imagine willingly paying for items on an internet form that I check off.  But ask me to pay for senseless liberal programs....?  sorry.

I know I am wasting my time posting here as you are an engineer who could not make it as an engineer.]]></description>
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<title><![CDATA[Comment  from tmking999]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11484]]></link>
<description><![CDATA[This is all started with Jimmy Carter and every president since then has contributed to it.]]></description>
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<title><![CDATA[Comment  from RM123]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11473]]></link>
<description><![CDATA[A few comments from an Canadian's perspective:

1. Clinton seems to get blamed for a lot of stuff down there. Not saying he should or shouldn't get blamed, just an observation.
2. Assuming Clinton did something wrong between 1992-2000, was there nothing Bush could have done in the intervening 8 years to fix it? 
3. I caught a bit of Bill on the View.  The question was put to him and he had what sounded like an intelligent response to the criticisms - he spoke of a few bills that he tried to pass but I have no idea whether that is the case or whether those bills, if passed, might have prevented this mess.]]></description>
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<title><![CDATA[Comment  from smileynh]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11470]]></link>
<description><![CDATA[Most importantly the NYT's article is dated Published: September 30, 1999.

&quot;Fannie Mae Eases Credit To Aid Mortgage Lending &quot;]]></description>
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<title><![CDATA[Comment  from smileynh]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11469]]></link>
<description><![CDATA[I'm very tired of this crisis, but this might add some light for the left wing, Bush Sux clueless types.  It's from YOUR newspaper, not Fox.  Everyone knew this was going to happen, why it was going to happen.  The BS is that it's a surprise.  I don't want to blame the minorities, ever.  The banks just loaned money to people who could not afford it.   The banks made a lot of money doing it.  The Democrats just wanted to help people and the old saying, &quot;The best intentions ..&quot; applies.

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&amp;sec=&amp;spon=&amp;pagewanted=1  

&quot;Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.&quot;

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent. &quot;



 

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<title><![CDATA[Comment  from GrizDave]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11467]]></link>
<description><![CDATA[OK, so let me get this straight the 'liberal media' that helped crucify Clinton for having sex in the White House, is the same 'liberal media'  that has let Bush get away with just about everything (see WMD, gutting the Constitution, Gitmo torture, Alberto G, &quot;Where is Cheney?&quot;,etc), is the same 'liberal media'  that who has helped cover-up all of the Financial mess for Clinton for the last 8 years that is just now hitting the fan??
 On the matter at hand though I am curious how many of the recent foreclosures, bad loans etc. were written prior to Bush taking office, or even to give a benefit of the doubt to the current regime after 2002 even?  If it is loans that are that old, then banks and financial institutions have made plenty of money from these 'poor' folks (remember you pay Interest first, before you start on the principle).  I would be tempted to guess that a majority of the &quot;bad paper&quot; that is making up the $700B is a bit newer than 2002.
  Also in watching the way some of these financial institutions are being bought up I am reminded of a classic quote from &quot;It's a Wonderful Life&quot;
  &quot;Can't you understand what's happening here? Don't you see what's happening? Potter isn't selling. Potter's buying! And why? Because we're panicky and he's not. That's why. He's pickin' up some bargain. Now, we can get through this thing all right. We've, we've got to stick together, though. We've got to have faith in each other.&quot;]]></description>
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<title><![CDATA[Comment  from alberg137]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11431]]></link>
<description><![CDATA[The CRA was responsible for half of the subprime loans.  Stupidity was responsible for the other half.  
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
Regardless of whether the CRA caused the current crisis, it certainly gave it an extra push in the wrong direction.  And don't forget the fact that Freddie Mach and Fannie Mae were encouraged by the government to buy up subprime securities even from banks that weren't covered by the CRA.  Anyone with any sense at all should have known the housing bubble would burst eventually; fluctuations like this are natural in a free market economy.  But the government's interference has made the natural periodic downturn of the market into a full blown crisis, and their current attempt to fix the problem they caused will likely make it even worse in the long run.  As far back as 1776 Adam Smith was making the point that government regulation only ever hurts the economy overall, but we still don't get it.
People who take out loans they can't pay back deserve to be foreclosed on.  People who lend money to people who can't pay it back deserve to loose their shirts.]]></description>
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<title><![CDATA[Comment  from steveskf]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11426]]></link>
<description><![CDATA[We are like sheep being lead to the slaughter, and we continue to volunteer for it.. For centuries the elite wealth class has raped the masses economically and still we believe their BS.. We must take you money for the good of the nation they keep telling us, and we continue to buy it. Now the tax payers must bail out the money changers again or the nation will crumble!!!  Fear has always been the best friend of the ruling classes. There will be no more credit if you don't bail us out, or so they tell us.   GOOD!!    Maybe its time credit is used only sparingly. Maybe the stock market should be scrapped as the illegal scam of a gambling operation that it is. How long must the masses be flogged before we get it?]]></description>
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<title><![CDATA[Comment  from gregb]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11424]]></link>
<description><![CDATA[In addition to any effects of pushing minority home ownership, Clinton also signed Phil Gramm's
&quot;Commodity Futures Modernization Act.&quot; into law.  Among other things, this bill deregulated a little known financial instrument known as a 'Credit Default Swap'.  AIG (remember them) holds lots of this instruments.  They are effectively an insurance policy on a risky mortgage loan.  Their existence makes  the purchase of these loans more attractive to the secondary mortgage market.  But...because they are unregulated, the issuers are not required to have any cash reserves to pay off claims as they would for regular (regulated) insurance instruments.  For more info, see the article from (the admittedly left leaning) Mother Jones:

  http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html

Oh yes, this is the same Phil Gramm that was the architect of McCain's economic platform and, until recently, the #2 person in his campaign organization.]]></description>
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<title><![CDATA[Comment  from olivaw]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11423]]></link>
<description><![CDATA[The New York Post article tries to blame the crisis on the Community Reinvestment Act (enacted in 1977), and on Fannie Mae and Freddie Mac. This argument is mostly wrong.

For more on why Fannie Mae and Freddie Mac were not the main instigators of sub-prime mortgage lending, see the below post by Ezra Klein, and his links to posts by Mark Thoma, the Calculated Risk blog, and Richard Green. Essentially the argument, which can be backed up by quantitative evidence, is that Fannie Mae and Freddie Mac were significantly restricted by various regulations from getting into the subprime market early. They did succeed in getting into it late, but by then much of the damage had already been done. They deserve some blame, but they were not the leaders.

On the Community Reinvestment Act, it is hard to see how a crisis occurring in 2008 is due to a law enacted in 1977. The timing doesn't fit.  In any event, there was hardly an upsurge in enforcement of the Community Reinvestment Act since 2000, under the Bush Administration. Furthermore, at least half of subprime loans came from mortgage companies that are not subject to the CRA.  Robert Gordon had a good article refuting this notion back in April; see the link below.

Ezra Klein link: 
http://www.prospect.org/csnc/blogs/ezraklein_archive?month=09&amp;year=2008&amp;base_name=fannie_and_freddie_were_not_th

Mark Thoma link:
http://economistsview.typepad.com/economistsview/2008/09/once-again-it-w.html 

Robert Gordon link:
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis
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<title><![CDATA[Comment  from bubba jones]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/11422]]></link>
<description><![CDATA[1999

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. 

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. 

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' 

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market. 

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's. 

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&amp;sec=&amp;spon=&amp;pagewanted=1

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' 
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