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Keeping Calm in the Coronavirus Market

Keeping Calm in the Coronavirus Market

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Keeping Calm in the Coronavirus Market: Eight Guidelines to Help You Make Smart Decisions (at Every Age)

Peter Mougey explains how to avoid knee-jerk, fear-based reactions; how to talk to your financial advisor; and how to make sound decisions that fit your unique circumstances.

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Q1 2020 hedge fund letters, conferences and more

Pensacola, FL (May 2020)—The market has been a wild ride lately, and like all wild rides, it's creating its share of frayed nerves. From early February to mid-March, the Volatility Index (VIX)—also known as the "Fear Index" - was up over 500 percent. Then it declined more than half. Even now, it's bouncing all over the place. What this means is fear is behind a lot of people's financial decisions. That's never a good place to be, says investors' rights advocate Peter J. Mougey.

"Fear-driven decisions are rarely good decisions, and they rarely have favorable outcomes," says Mougey. "The best strategy in a time of elevated fear is to calm down, avoid knee-jerk reactions, and get educated on how the market works. And that means making sure you have a healthy relationship with a financial advisor who has your best interests at heart."

Mougey is a national securities and investment fraud attorney with Pensacola, Florida's Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, P.A. He is an advocate for small business owners and "Main Street investors" who've worked hard all their lives and saved religiously, only to lose everything due to bad advice.

What he's learned and seen over the years has not only given him a passion for defending these people in the legal system but also a solid grasp of measured, commonsense investing practices.

What To Do In The Volatile Coronavirus Market?

Mougey offers the following tips for anyone who's worried about what to do next (or not to do, as the case may be) in the volatile coronavirus market:

First, make sure both you and your financial advisor are fully engaged. You've almost certainly heard from your advisor by now. But is it just a mass email meant to calm you down, or are they truly leaning in? Do you get regular status updates? (Full-service brokerage firms should be contacting you every week or two, especially if you are heavy in stocks or using leverage.) Do you have a solid understanding of what they're recommending and why? Do you understand the math behind their advice? Mougey suggests asking questions like the following:

  • What percentage of my portfolio is in stocks?
  • What percentage is in bonds?
  • If I were in 50 percent stocks and 50 percent bonds, how much would my portfolio be down right now?
  • How does my performance stack up against broad market indices like the S&P 500 or Barclays U.S. Aggregate Bond Index?

"The performance of your portfolio should follow the performance of the broad market indices," says Mougey. "They are good benchmarks. The further you deviate from the broad market indices, the more often you need to talk to your advisor. That's true whether you're 20 or 70."

In general, start your analysis using the "age rule" (and if you are not, definitely understand why). Essentially, this means 100 minus your age should be in stocks. If you're 20, around 80 percent of your portfolio should be in stocks. If you're 80, around 20 percent should be in stocks. This simple formula is a good starting place for your conversation. For most of us, it's not too late to get our portfolio balanced, asserts Mougey.

"It's actually pretty simple: Stocks have higher volatility," he says. "They bounce up and down. The older you get, the less volatility you can handle because you don't have time to recover the losses. People at or near retirement should have limited exposure to stocks.

"If your advisor is suggesting you deviate from the age rule, make sure they can explain why," adds Mougey. "They need to have a sound strategy, and you need to understand it."

If you're young (in your 20s and 30s), sit tight. "Pay attention to what's happening around you," says Mougey. "The coronavirus market should be a lesson to you to invest as much as you can now so that when/if an earthshaking event happens when you're older, you've built up enough of a nest egg to be able to handle the volatility.

"The years 2000 to 2010 are another example of why you shouldn't wait 'til the last minute," he adds. "Over this entire decade, the stock market was flat. A person who waited until they were in their 50s to invest during this time period received no benefit. Invest early. Time is your friend."

If you're middle aged (in your 40s and 50s), don't panic. Yes, it's extremely difficult to watch the rapid declines. You have time to recover, so don't get out of the market now. The Dow has declined 30 percent faster than at any other point in history. There has been a large bounce, but no one knows when we will recover. The problem with getting out and watching from the sidelines is you will invariably miss the bounce.

"But always ensure you are properly allocated to stocks and bonds, given your goals, before you just sit and watch the activity," he adds.

If you're retired and taking withdrawals, ask yourself: Can I afford to ride this out at my current rate? Keep in mind that we might be in the middle of the downspin. Back in 2000, a lot of investors believed we were at the bottom when the S&P had declined 10 percent. Then in 2001, it declined another 10 percent. Everyone thought, After two years of declines, there is no way we can have a third year, so we must be at the bottom. Then in 2002, it declined 20 percent.

The point, says Mougey, is that you never know where you are in the cycle. This is why you need to make sure you aren't taking too much in withdrawals. A sustainable withdrawal rate is 4-5 percent. If you're taking more than that, there's a risk of entering the "death spiral," and you might not recover. And the sustainable rate also holds true in good years.

"You can't take large withdrawals in good years, because there will always be declines," he notes. "You need market build-ups to offset the flat periods. Large withdrawals coupled with large declines makes it impossible to rebound. This is the 'death spiral.' Sustainable withdrawals with reduced volatility from a balanced portfolio means you can rebound when the market swings up again. The goal is to reduce large fluctuations over time." NOTE: See tip sheet below to understand how the math breaks down.

If you decide you can't afford to ride it out, consider getting out of the market. For example, if you had $150,000 before the coronavirus market and most of your portfolio is in stocks or concentrated in poor-performing sectors, you're probably now down 20-25 percent. So if you're down below $100,000 because of withdrawals and losses and simply cannot afford to lose any more, you may want to get out of the market now.

If you do decide to get out, you have two choices: go into bonds or go to cash. You can go into bonds and be pretty safe, but there's no absolute certainty. For example, in 2008, people still lost money in bonds. Also, if interest rates rise, bonds decline. The other option is to go to cash—perhaps in the form of a CD or just sitting in a savings account. Just don't think of this as a long-term option, says Mougey—inflation will eat away at the value of your money.

Finally, don't think you can predict tomorrow's hot stocks. We're seeing Clorox and Peloton and Netflix doing well. Their stocks are going crazy. But are you buying at the peak? Market timing doesn't really work well for most people.

"There are always hot stocks, but the sectors just change," says Mougey. "Bottom line, over the long-term, stock picking doesn't work."

One more thing: Make sure the conversations you're having with your financial advisor are calm and rational, says Mougey.

"They should be able to explain why their advice is research-backed and based on the performance of broad market indices," he adds. "They shouldn't just offer reassurance like 'stay the course.' The conversation has to be data-driven. If not, that's a red flag."


Peter Mougey is a partner in the Pensacola-based law firm Levin Papantonio and the chair of the firm's securities department. He concentrates his practice in the areas of complex litigation, financial services, securities litigation, and whistleblower or qui tam litigation.

Mr. Mougey advocates for the rights of investors as both the past president and member of the board of directors of the national securities bar, PIABA, which was established in 1990 to promote and protect the interests of the public sector in securities and commodities arbitration. Mougey has spent much of his career leveling the playing field for investors. He has proposed reforms to combat Wall Street fraud, through a new fiduciary standard in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act. He has also spearheaded communications with state and federal regulators to ensure that investors' voices are heard.

Mr. Mougey has represented over 1,500 state, municipal, and institutional entities, as well as tribal sovereign nations, in litigation and arbitration around the globe. In addition, he has represented more than 3,000 individual fraud victims in state and federal court and arbitrations. Mr. Mougey has been recognized as a transformational leader in and out of the courtroom and is often called upon to simplify the country's most complex cases.

He has also served as chairman of the NASAA Committee, Executive Committee and FINRA's Improving Arbitration Task Force. Currently, Mr. Mougey serves on the PIABA Foundation charged with educating investors in conjunction with the SEC. In recognition of his long-term and sustained dedication to promote the interests of investors, he received the PIABA Lifetime Distinguished Service Award from his peers.

Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, P.A., has been in existence for more than 65 years. It is one of the most successful plaintiff law firms in America. Its attorneys handle claims throughout the country involving prescription drugs, medical devices, defective products, securities, and consumer protection.

Based on law firm verdicts and settlements exceeding $4 billion, its securities fraud lawyers are committed to seeking justice for the victims of investment fraud and misconduct. Led by attorney Peter Mougey, the past president of the national securities bar PIABA, the securities and business tort department has represented more than 1,500 investment fraud victims across the country in state and federal court and securities industry arbitration.

To learn more, please visit www.levinlaw.com.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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