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  #1 (permalink)  
Old October 9th, 2008, 04:11 PM
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Default Oy Vey - stock market blues

We are now down 40% in the stock market in a remarkably short period of time. This is not limited to the US stock market, it is worldwide problem.

Russia and Iceland stock markets have almost shuttered their doors.

September and October are notoriously bad months for the stock market, and not just for logical reasons - a lot of it just coincidental. In other words, they are few specific things about these months that would lead to market sell-offs, it just seems to happen that way.

How many days left in October?

Are all or any of you watching this as closely as I am?
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Old October 9th, 2008, 04:26 PM
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Oh yea and its very unsettling to say the least I hope you are right and its just a bad month, but we still have the other half to get through. I'm also hoping that the election will turn things around, we can only hope, otherwise, I may never get to retire.
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Old October 9th, 2008, 04:31 PM
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Default Re: Oy Vey - stock market blues

Quote:
Originally Posted by Paul Motter
We are now down 40% in the stock market in a remarkably short period of time. This is not limited to the US stock market, it is worldwide problem.

Russia and Iceland stock markets have almost shuttered their doors.

September and October are notoriously bad months for the stock market, and not just for logical reasons - a lot of it just coincidental. In other words, they are few specific things about these months that would lead to market sell-offs, it just seems to happen that way.

How many days left in October?

Are all or any of you watching this as closely as I am?
Yes I have SPY in my retirement account. I just looked at it. :evil: I'm not so depressed I'm jumping out a window. But, man I bought it as $123 then again at $110 it is at $90 today. Good thing I don't retire for 15 years and can wait it out. I wish I had a hedge fund. I'm in hold mode.
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Old October 9th, 2008, 04:38 PM
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Every time the market does this, if you are a net buyer you win. I admit I have also been buying and averaging down, the problem is that nothing is working.

I am hoping people are NOT bailing out of the market because that would mean mutual fund redemptions forcing them to sell stocks.

Thuis is the worst quaqmire I have ever seen our economy in. The consumer, which usually saves it, can't save it now because banks are not giving credit. If banks don't give credit they can't make money, and if they can't make money they can't lend money.

CNBC is saying people are putting the money into their checking accts!
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Old October 9th, 2008, 05:03 PM
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I have less money this week than I had last week, that's for sure. Quite a few of my stocks hit the stop-sell early this week (CCL and RCL were part of that group) and I have bought into some equities that may be bargains but overall, I am taking a backseat to trading at this time. The money is sitting in cash accounts and money markets (I hope they maintain at least a $1.00 value ).

I do have some pending buy orders if certain stocks, including CCL and RCL, hit lower points. This may be an opportunity equal to the post 9/11 lows and the gains they made after that.

I knew that things would get worse before they got better and that the light at the end of the tunnel was a ways off but I am now thinking that the light was an oncoming train. I think I will to have to wait for the train to pass before I jump back in with both feet. I truthfully believe we haven't seen the bottom yet.

Take care,
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Old October 9th, 2008, 05:20 PM
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Even though we are retired, at this time we're not using any of our investments for our monthly budget...... however, I still feel like we need to hunker down until this storm passes. We aren't buying or selling anything! It is so unsettling. I'm still hopeful that things will turn around, but I sure don't see what will facilitate such a change.
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Old October 9th, 2008, 05:26 PM
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You stole my Oy...and there is no better word, other than scary, for what's going on now, and because of this, I will forgive you.
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Old October 9th, 2008, 05:27 PM
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OK - so CNBC is saying people who are taking money out of the stock market are putting it in their checking accounts - just in time for Christmas! Let's hope they are joint accounts and mom doesn't check with dad before she goes shopping.

The way I see it - something has to stimulate this economy and it could be the consumer.

For stocks - I am NOT telling anyone what to do, I am just saying that I am staying in for the most part, I have even been buying both yesterday and today.

Obviously, I regret what I bought yesterday after what happened today - but in the long run these are bargain levels.

My accountant puts it like this - if you try to time the market and sell your stocks hoping to buy back cheaper you can miss the entire recovery. if it goes down 1000 points in 3 days, it can also go up the same amount.

He said "you can miss the entire turnaround by being out two days." and I understand that.

You have to be able to stand the short term loss because no one blows a whistle when the bottom hits. The main thing is that we have to hope for a reasonably quick turnaround.

Remember the bear market of 2000? We have already gone down about the same percentage (right?), but that took almost a year while this has been about a month. Still, the market hit an all-time new high in 2007.

The trick is knowing what stocks to buy. You have to re-align your portfolio. If you sold your tech stocks in 2000 and bought oil you would have made a KILLING. Oil was in the tank then, now techs are. But everyone was in love with techs and most people lost money.

I also could not resist buying RCL at 21, and now it is under 15. I am very tempted to buy more here. Oasis is coming out in a year, and the economy will certainly be better by then.
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Old October 9th, 2008, 05:57 PM
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23 days left for October to answer that question.

As for the market, how can we not watch it. Being retired is getting scary. I sure don't want to go back to work after being retired, but one never knows.
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Old October 9th, 2008, 06:09 PM
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When the laws which resulted in the sub-prime mortgage fiasco were repealed, I thought it was a really good time to put my money elsewhere. Thankfully, I don't have a penny in the markets right now.
Gold looks pretty good.
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Old October 9th, 2008, 06:21 PM
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where is it, under your mattress? that's the problem, there is no good place for money right now.

I hear people saying "muni's" which could be a really good idea. I am not yet retired, but it is scary seeing the date get farther away.

I would prefer to see my stocks come back, but muni's at least give you a tax break. If cap gains go up stocks could languish, then a tax-free muni would look even better. But if cap gains go away then a muni has less advantage than a regular bond.
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Old October 9th, 2008, 06:42 PM
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I'm glad I'm young enough to just wait it out. Mark my words 5 years before my retirement I will be completely out of stocks. I have seen to many retiree become unretired because of this stuff.

I like to dollar cost average into my 457 account so right now it's a great buying opportunity. Dollar cost average over a long period of time is the only thing that truly works. Oh and not panicing right now and getting out of your retirement account, you are buying low now. I'm thinking long range so I let my hubby freak out about now.
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Old October 9th, 2008, 06:51 PM
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Paul, et al.,

I've been saying this was coming for fifteen or twenty years (and my wife will vouch for that). But as I'm not an economist nor even a college graduate, I've kept to myself. Now that even some top economists have no idea why what's happening is happening, then I admit to, if only a wee bit, some justification.

I think we're in for a long and very rough ride that will end up effecting everyone regardless of whether or not they own any stock or their retirement is backed by stock. Maybe it's based only on hope but it is my belief that probably ten years from now (hopefully less but that's probably unreasonable), today will only be a bad dream. I do hope that we don't bounce out of this horrific mess overnight, because if we do, we'll have learned nothing. I, uhh, don't perceive that happening anyway.

I do both hope and pray that out of all of this, we end up understanding our decades long harvest of what has finally proven to be the bitter fruit of our national attitude demanding immediate gratification and aggrandizement.

If nothing else, maybe we'll get back to basics and by that I mean; if we can't afford to pay cash for all but the biggest ticket items (such as cars and homes), then we don't buy them and if someone doesn't at least attempt to pull their own weight, some government entity isn't going to support them for the rest of their lives. Some entitlements are necessary and every reasonable person understands that necessity in today's society -- especially when it comes to doing something about healthcare. But what we're witnessing today is in part due to unbridled entitlements. This has only become exponentially worse as a result of the economy's meltdown while in the midst of a national election season with one side out proposing the other. And what remedies are being sought? More entitlements and give aways!

Simply and absolutely unbelievable.

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Old October 9th, 2008, 07:08 PM
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I've also been holding out, not selling or buying, but thinking of buying, don't know what to do.

Now, the unemployments rate alarm me as well, we need to keep people working and spending to keep things going, with more people loosing their jobs, it doesn't help the economy at all...I'll for sure have another 10 plus years before I can retire, I just hope its enough time for things to grow and I can live off it, who knows about social security at this point.
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Old October 9th, 2008, 07:50 PM
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I think Jake follows much the same investment pattern that Mike M does. In any case we are doing pretty good. We've been hit a little, but not as bad as we could have. Having said that I am very angry about what has brought us to this place, and the impact it will have on so many.

I've been following to some degree the direction that we've been heading towards for a year or more. I like to listen to Glenn Beck on the radio. I call him chicken little a lot of the time, but I trust him to give his honest opinion, and I've found him to be right more times than not. He is not an investment person--just a commentator. I am preparing for a future that may not be what I am accustomed to. I pray that won't happen, but prepare as if it will.

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Old October 9th, 2008, 07:50 PM
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I too am just holding on for the ride. I don't see anything else that can be done at this point that makes any sense to me. Guess I'll just go on a cruise, and not worry about it!

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Old October 9th, 2008, 08:14 PM
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We, too, are holding on. I'm trying not to pay to much attention to it but it's hard NOT to!
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Old October 9th, 2008, 08:23 PM
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I believe that it was Peter Lynch, from Fidelity, that come out with the phrase, "stay the course". Yes, the market is down and Rob got very anxious when he looked at his 401k. If you look at the market, historically, it always rebounds. This might take a few years but the worse thing that people can do is panic and sell low. If anything, this is a buying opportunity, and with dollar-cost averaging you are getting more stock now for your dollar than sevaral weeks ago. I was so confident in the cruise industry that I bought some more shares of Royal Caribbean two days ago; of course it has gone down since I bought it but, I know that all cruiselines stock will go up as more baby-boomers retire and have more time to cruise. Let's be optimistic and have good endorphens sent to our financial institutions!
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Old October 9th, 2008, 08:46 PM
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A few thoughts.....

This is all fear.

So don't panic -- don't do anything rash.

Any good Contrarian will tell you to do the opposite of what everyone else is doing. When everyone else is selling (and they are) you will be buying.

And then when everyone else is buying, you'll be there to sell it to them -- for a profit.

This is an excellent opportunity for dollar-cost-averaging. Keep buying the same $ worth every month, and right now, you'll be purchasing a larger number of shares to sell later for a profit.

So, don't panic. Keep the faith.

For this too shall pass.
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Old October 9th, 2008, 09:10 PM
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I am invested in a diversified group and, even though I am being hammered, I will recoup in the long run!
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Old October 9th, 2008, 10:31 PM
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I am very glad to see most people are staying the course. "We have nothing to fear but fear itself" is from what, the 30's?

I agree with Donna - the consumer should not stop reasonable spending now. We are about to lose General Motors and banks aren't giving car loans. Todd, I agree that people should not over-extend credit, but some credit is a part of how our economy works. Who could ever afford to pay cash for a home? Giving people a reason to take on and maintain responsibility is what keeps our society going.

I have to say I am skeptical of anyone who says they saw this specific meltdown coming. Signs of it yes, but not to this degree. I saw too many people over-extended on credit, but I had NO idea the government was giving money to Fannie Mae to buy loans from unqualified borrowers. They were hiding it and few in charge were telling us anything was wrong - and when they did we didn't want to listen.

I know, I have a relative who is $1,000,000 in debt, and she still doesn't see her own culpability. She figures that if they were willing to give it to her she must have been worth it. Her house was worth it, but it ended up mortgaged to the hilt. That was wrong on her part, but what does it also say about the lender?

I think the bankers who made these loans are as bad or worse than the people who took them. The banks deserve to fail. Also the whole credit card scheme this country has relied upon got way out of hand a long time ago. It is the desire of people who want everything without having to earn it, and the willingness of lenders to give it to them in exchange for indentured servitude (its all about your credit rating) that is at the root of this problem. The most coveted borrower was the one who could only afford to pay the minimum due every month - what does that tell you?

In any case - back to the market: there are people who rely on technical analysis for stock trading. Elliot Wave theory, Fibonacci analysis, etc is VERY popular with traders. According to that theory, the bottom should be in the range of 8000 (not THAT far from where we are). They say this is a long-term low before a complete turn-around. We have already dropped 40%, that is about another 10%.

Now - that is JUST a theory, and they are very bad at saying WHEN this will occur (the waves do not see time, only pattern). It could be in 10 years. They also tend to change the way they read the patterns after the fact. But in any case, the point is they have been pretty accurate so far, but I would never say I rely on it. It is just another tool.

But I also think recovery will not take as long as people think once it starts because the market has become so efficient. When real value becomes apparent and the market becomes liquid again, our economy wants to prevail. When the market is booming people think it will never end, and when it is busting they think the end is here. Reality is somewhere in the middle and historically we always recover. The fact that people are now saying it is "all over" is a sign that we are about to turn the corner.
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Old October 9th, 2008, 11:31 PM
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With all the turmoil in the market today and the collapse of Lehman Bros
and Acquisition of Merrill Lynch by Bank of America this might be some
good advice. For all of you with any money left, be aware of the next
expected mergers so that you can get in on the ground floor and make
some BIG bucks.
Watch for these consolidations in later this year:

1.) Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W R.
Grace Co. Will merge and become: Hale, Mary, Fuller, Grace.

2.) Polygram Records, Warner Bros., and Zesta Crackers join forces and
become: Poly, Warner Cracker.

3.) 3M will merge with Goodyear and become: MMMGood.

4. Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining will
merge and become: ZipAudiDoDa .

5. FedEx is expected to join its competitor, UPS, and become: FedUP.

6. Fairchild Electronics and Honeywell Computers will become: Fairwell
Honeychild.

7. Grey Poupon and Docker Pants are expected to become: PouponPants.

8. Knotts Berry Farm and the National Organization of Women will become:
Knott NOW!

And finally 9. Victoria 's Secret and Smith &Wesson will merge under the
new
name: TittyTittyBangBang
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Old October 9th, 2008, 11:40 PM
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LuAnne, I've already called my broker!
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Old October 9th, 2008, 11:44 PM
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lol Hey Paul I hope you and Luann are doing well.
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Old October 10th, 2008, 12:00 AM
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Paul,

You may be skeptical that I saw this coming and that is of course your prerogative. I will therefore explain why I said what I said. I may well have been wrong in my reasoning for, as I previously stated, I am not an economist, much less one all that knowledgeable about either the stock market or the terms used therein.

Back in probably the late seventies, the Dow Jones was maybe around 800, give or take. Then it started up and from the early 80's it, for lack of a better term, launched into the stratosphere until 26 years later it topped off at well above 12,000.....and this was EVEN INCLUDING PERIOD OF THE DOT.COM DISASTER!

Now maybe I was right for all of the wrong reasons but nevertheless, I told both family and friends when the topic would ever come up, that I personally could not fathom how the market could have gone up at both the pace and the speed it had attained. On top of that, retail prices in everything from coffee to beef were going through the roof doubling and trebling and in very brief periods at that. And it just couldn't last. Companies that were on the balance sheet losing tons of money were becoming more "valuable" every day. Inflation began to explode. Then to really make the situation frightening, many controls put on the financial industry back during the Depression were liftede (i.e. Glass Steagall, etc.) in the late nineties. To me at least, it didn't make any sense whatsover and it still doesn't make any sense.

What I personally can't fathom, Paul is why MORE PEOPLE didn't see this train wreck coming down the line. I used to ask my wife after watching the financial news, "Is it just me? Am I the one that's crazy?" I just couldn't believe that I was the only one saying this is going to blow up in our faces. And that is the exact reason that except for a minor 401K that I cashed in when I became totally disabled, I was always afraid to invest even though that I knew myself that were one to take any ten consecutive years, the stock market has gone up. And I know millions of people have made money, some a lot of money. Nonetheless, what has happened has happened and while again, it may be for ALL THE WRONG REASONS, my mightmares have become reality.

So while yes Paul, you and maybe even most others may be skeptical of my claim, I nevertheless staked it and I was proven, in a nutsell at least, correct.

And what stocks should one buy right now? Don't laugh but has anyone checked out Campbells' Soup and Kraft Foods? Guess even investors realize we gotta' eat!

Todd

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Old October 10th, 2008, 12:56 AM
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Todd,

If you have been predicting a major drop in the market since the late seventies and early eighties you definitely would have been right at some point.

It is a basic cycle of capitalism that a capitalist society will go through periods of recession and even depression in which the economy will fall and rise. It's part of the cycle with the overall economy averaging out somewhere in the middle. It's a basic, what goes up must come down.

Granted that with some better oversight in certain areas this drop would not have been as major but it was bound to happen. I too believe that the market will recover in a "relatively" short period of time. My guess is one to five years.

I do hope that it takes another 30 years for the next major drop to happen; and it will happen.

Take care,
Mike
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Old October 10th, 2008, 01:00 AM
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I don't mean to say I doubt anyone could see "a disaster" coming. What I mean to say is that I don't believe most people who say they saw the specific issues causing this current mess coming - the fact that Wall Street firms were re-selling GSE-backed loans (government money supplied to Fannie mae) based on mortgages given to unqualified borrowers.

I didn't know Fannie Mae had been authorized, even encouraged, to sell sub-prime or Alt-A mortgages. Did you? Such instruments were invented to fund real estate speculators, much like the money car dealers borrow to make payroll. To take loans like that and give them to people with no collateral at all is not just bad judegement, it should be illegal.

My family had a lot of stock in Fannie mae my Dad bought in the 70s. He was ultra-conservative with money. The only reason he bought it was because he knew it was a government backed security and he never thought they would risk their money. WRONG! These politicians turned Fannie Mae into an ATM for people with no credit. And Wall Street jumped on the bandwagon. We should have been warned about what Fannie mae was doing with major headlines, but Fannie gave out all kinds of political contributions to keep our congresspeople quiet about what was really going on. Fannie also cooked their books to hide their exposure to bad loans.

That is what I am saying - i don't believe most people actually saw those specific events happening.

We all saw the credit mess occuring. I tried to get my relative to cut up her credit cards in 1993. She said "No, I have to keep so I can learn to have power over them." - Yeah, right.
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Old October 10th, 2008, 01:06 AM
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I just got my newsletter from the Elliot Wave guys. This is VERY raw technical analysis so don't take it too literally, but they say they see a bottom coming very soon, that it may have happened already, but that it will lead to the third leg of a bull-cycle of a larger bear market. They predict a rise like a bull market probably through early (spring) 2009. Then they predict a fall to test the support level BELOW this one, probably at 7200. If it holds that support we should recover with a new bull market - but if it breaks below that support then the government will melt down into socialism or even fascism.

These guys dont whistle Dixie with their stock market predictions ;-)
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Old October 10th, 2008, 07:58 AM
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I have been hearing from a number of sources that this financial crises was coming for quite some time now. I do believe that there were people that knew the details that we are just hearing about for quite some time.

I am hopeful, and history gives reason for that hope, that this will all turn around, and we will find outselves on the upswing again having learned some hard lessons in the meantime.

I have concerns though as we live in difficult days that leave a great deal of insecurity. I sometimes think it's like a game with the dominoes all stacked up. If some of them start to fall who knows what happens. I don't want to live in fear, but I do want to be prepared as best as I am able to be.

Luanne, thanks for the laugh. Heaven knows we need it.

Phyll
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Old October 10th, 2008, 08:58 AM
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Remember what they said on the Titanic? Just sit tight; there are plenty of lifeboats.
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