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Week Ahead – Fed minutes the highlight

Country US Inflation data this week provided some light relief in the markets, even if it has probably done nothing to influence the Federal Reserve ahead of a significant few months. The economy is strong, the labour market is seeing major improvements..





Inflation data this week provided some light relief in the markets, even if it has probably done nothing to influence the Federal Reserve ahead of a significant few months. The economy is strong, the labour market is seeing major improvements and while inflation is not a problem, it’s also not something to ignore altogether. 

Tapering is coming and September looks the most likely time for the announcement, be it to begin immediately or later in the year. Jackson Hole could see Chair Jerome Powell lay the groundwork for any announcement and even drop hints on the timing and pace. 

Fed minutes next week is the most noteworthy release. After numerous Fed speakers over the last couple of weeks though, it may not hold too many surprises. Retail sales, jobless claims, Philly Fed, building permits and housing starts are also notable. But in reality, focus is very much on Jackson Hole now.


Next week offers a small selection of data for the euro area, most notably the flash employment change and GDP figures. The data has been encouraging for the bloc recently, with the developments on the vaccine rollout driving confidence in the region.

That said, the ZEW data this week suggests businesses are still very cautious on the recovery. The expectation that there will be another surge in Covid cases and the belief that growth will soften as a result of that already achieved were behind the downbeat assessment of the outlook.


Plenty of cause for optimism in this weeks GDP data, with the economy now only 4.4% below its Q4 2019 peak. Growth in June exceeded expectations ahead of final restrictions being lifted in July. As yet, the reopening has gone well, with cases not rising to an uncomfortable level, hospitalisations manageable and fatalities still low.  

The “pingdemic” and associated labour shortages have been a slight drag for the economy in recent months but broadly speaking, it’s looking in good shape going into the final months of the year. 

Unemployment, earnings, inflation and retail sales data next week should keep the pound active. The BoE has recently opened up on tightening plans in the coming years but we’re still quite a way from that at this stage, despite the progress in the economy. New purchases under its QE program will continue until the end of the year, as planned.

Emerging Markets


GDP and PPI data released next week. The central bank recently raised rates to 6.5% and warned that more may follow.

South Africa

Retail sales and inflation data due in the middle of next week.The central bank previously left interest rates unchanged and signaled a hike may be considered later in the year, which makes the inflation data on Wednesday all the more interesting. CPI is expected to fall from 4.9% to 4.2%. 


The CBRT surprised markets in leaving interest rates unchanged at 19% last month, just above the current rate of inflation and in-keeping with the promises made by Governor Şahap Kavcıoğlu when he took the role earlier this year.

This is despite continued pressure from President Erdogan who has repeatedly stressed his belief that higher interest rates stoke inflation, the opposite of what is widely believed to be true. Erdogan has continued to push for rate cuts and Kavcıoğlu may have the opportunity to later this year if inflation drops as the CBRT expects. Otherwise, he may suffer the same fate as his predecessor Naci Ağbal.

The lira is going to remain vulnerable to sell-offs as a result with Erdogan clearly not afraid to pull the trigger.

Asia Pacific


Government regulatory risk continues to dominate China equity markets, with state bodies releasing a new 5-year plan this week stating that this process will continue and expand. The question on everybody’s lips being, who is next? China equities remain under pressure this week and are set to do so going forward as markets rebalance pricing to find the equilibrium between attractive multiples and government risk. We’re not done yet. Hong Kong, home to the listings of China tech heavyweights, and the CSI 300, will continue to struggle.

Covid’s delta-variant has spread to more cities, although cases remain low. An escalation in cases is a key risk for China and the region. More notably, the two busiest ports in the world, Shanghai and Ningbo have been partially shut after cases were discovered there. That threatens knock-on effects in both China and across the globe and readers should monitor this situation closely. Asian equities fell on Friday in no small part because of this.

China releases activity data for July on Monday. It features Industrial Output, Fixed Asset Investment and Retail Sales. Markets are already nervous about the virus and data indicating China’s growth is slowing. Poor numbers will see China equities hit hard and that will have a similar effect across the region. We expect no change to the one and five-year Loan Prime Rates on Friday despite a recent RRR cut.


The Indian Rupee is befitting from strong international inflows as overseas investors switch funds from China to opportunities in India’s equity markets. USD/INR fell this week despite a generally strong US Dollar globally. A sell-off in China markets on Monday if the data is poor will almost certainly spill over into other Asian currencies and equity markets, including India.

India releases WPI inflation on Monday but with the RBI staying on hold at the latest policy meeting, it is unlikely to have much impact if it remains around 11.0%. A much lower number will be positive for the INR and local equities. A much higher number will have the opposite effect as the country’s stagflation woes deepen.

No other significant data.

Australia & New Zealand

Australia’s virus containment lockdowns continue to spread across the country with Canberra joining the lockdown and Sydney cases showing no signs of slowing. Equity markets continue to ignore this reality and its probable knock-on effects, content to follow Wall Street and firm commodity prices. Readers should watch those for directional indications. Australian Unemployment on Thursday should only cause short-term volatility. The Australian Dollar remains soft on globally cautious risk sentiment due to the delta-variant, and a very dovish RBA.

By contrast, New Zealand continues to print blockbuster data releases indicating an economy overheating. A rate hike of 0.25% this week by the Reserve Bank on the 18th is highly likely and the only question is whether they indicate whether another two or three will occur this year in the statement. Unsurprisingly the NZD continues to outperform, particularly against low yielders like AUD and JPY.

There is an outside chance the RBNZ could go all in and hike by 0.50% on Wednesday and indicate more hikes to follow this year. In that case NZD/USD could well rally by 150+ points and AUD/NZD could fall by 200-300 points.


Japan releases Q2 GDP on Monday, but its impact will be zero as Q2 is now old news. The Trade Balance on Wednesday will be of slightly more interest, with CPI on Friday expected to remain at 0.10% in 25 years of business as usual. Talk that PM Suga will enact another $270 billion stimulus has not moved markets.

Japan equity markets continue to ignore the Covid-19 situation, like Australia, with local investors happy to slavishly follow Wall Street’s FOMO gnomes. That could change next week as the Covid-19 situation in Japan continues to go from bad to worse. Notably, a Tokyo health official stated that they had lost control of the situation in the city. Japan’s restriction measures have the consistency of wet paper, and if the government signals a tightening finally, equities and the Yen will suffer. Most likely they will continue to sit like possums in the headlights and analysis paralysis themselves to a standstill. 

USD/JPY has dissolved into a purely US/Japan interest rate differential play and the cross rallied sharply in the past week as US yields firmed notably. If US yields stay at present levels, USD/JPY may test 111.00 in the week ahead.

Economic Events

Local Start Date Country/Region Indicator Name Period Reuters Poll
16 Aug 2021 Japan GDP QQ Q2 0.2%
16 Aug 2021 Japan GDP QQ Annualised Q2 0.7%
16 Aug 2021 Japan GDP QQ Pvt Consmp Prelim Q2 -0.1%
16 Aug 2021 Japan GDP QQ Capital Expend. Q2 1.7%
16 Aug 2021 Japan GDP QQ External Demand Q2 -0.1%
16 Aug 2021 China (Mainland) Urban Investment (YTD)YY Jul 11.3%
16 Aug 2021 China (Mainland) Industrial Output YY Jul 7.8%
16 Aug 2021 China (Mainland) Retail Sales YY Jul 11.5%
16 Aug 2021 Thailand GDP Growth YY Q2 6.4%
16 Aug 2021 India WPI Inflation YY Jul 11.30%
16 Aug 2021 Euro Zone Reserve Assets Total Jul
17 Aug 2021 United Kingdom Claimant Count Unem Chng Jul
17 Aug 2021 United Kingdom ILO Unemployment Rate Jun 4.8%
17 Aug 2021 Euro Zone Employment Overall Flash Q2
17 Aug 2021 Euro Zone Employment Flash YY Q2
17 Aug 2021 Euro Zone Employment Flash QQ Q2
17 Aug 2021 Euro Zone GDP Flash Estimate QQ Q2 2.0%
17 Aug 2021 Euro Zone GDP Flash Estimate YY Q2 13.7%
17 Aug 2021 New Zealand Milk Auctions 17 Aug
17 Aug 2021 Canada House Starts, Annualized Jul
17 Aug 2021 United States Retail Sales MM Jul -0.3%
17 Aug 2021 United States Retail Sales YoY Jul
17 Aug 2021 United States Industrial Production MM Jul 0.5%
17 Aug 2021 United States Industrial Production YoY Jul
17 Aug 2021 United States API wkly crude Stk 9 Aug #N/P
18 Aug 2021 Japan Machinery Orders MM Jun -2.8%
18 Aug 2021 Japan Machinery Orders YY Jun 15.8%
18 Aug 2021 Japan Exports YY Jul 39.0%
18 Aug 2021 Japan Imports YY Jul 35.1%
18 Aug 2021 Japan Trade Balance Total Yen Jul 202.3B
18 Aug 2021 Australia Wage Price Index QQ Q2 0.6%
18 Aug 2021 Australia Wage Price Index YY Q2 1.9%
18 Aug 2021 New Zealand Cash Rate 18 Aug 0.50%
18 Aug 2021 Indonesia Trade Balance (Bln of $) Jul 2.27B
18 Aug 2021 United Kingdom CPI YY Jul 2.3%
18 Aug 2021 South Africa CPI YY Jul
18 Aug 2021 Euro Zone HICP Final MM Jul -0.1%
18 Aug 2021 Euro Zone HICP Final YY Jul 2.2%
18 Aug 2021 Euro Zone HICP Ex-Tobacco Revised Jul
18 Aug 2021 Euro Zone HICP Excl Tobacco Unrevised Jul
18 Aug 2021 United States Housing Starts Number Jul 1.608M
18 Aug 2021 Canada CPI BoC Core YY Jul
18 Aug 2021 Canada CPI BoC Core MM Jul
18 Aug 2021 Canada CPI Median Jul
18 Aug 2021 Canada CPI Trim Jul
18 Aug 2021 Canada CPI Common Jul
18 Aug 2021 Canada CPI NSA Jul
18 Aug 2021 Canada CPI YY SA Jul
18 Aug 2021 United States EIA Wkly Crude Stk 13 Aug
19 Aug 2021 Japan Reuters Tankan N-Man Idx Aug
19 Aug 2021 Australia Employment Jul -45.0k
19 Aug 2021 Australia Unemployment Rate Jul 5.0%
19 Aug 2021 Switzerland Industrial Production YY Q2
19 Aug 2021 Indonesia 7-Day Reverse Repo Aug
19 Aug 2021 Indonesia Deposit Facility Rate Aug
19 Aug 2021 Indonesia Lending Facility Rate Aug
19 Aug 2021 Norway Key Policy Rate 19 Aug 0.00%
19 Aug 2021 Hong Kong CPI MM NSA Jul
19 Aug 2021 Hong Kong CPI NSA Jul
19 Aug 2021 United States Initial Jobless Clm 9 Aug
19 Aug 2021 United States Philly Fed Business Indx Aug
20 Aug 2021 Japan CPI, Core Nationwide YY Jul -0.4%
20 Aug 2021 Japan CPI, Overall Nationwide Jul
20 Aug 2021 Japan CPI Ex Fresh Fd and Eng Jul
20 Aug 2021 Japan CPI Nationwide  Excl Food & Energy Y/Y Jul
20 Aug 2021 Japan CPI MM NSA Jul
20 Aug 2021 Japan CPI Nationwide  Excl Food & Energy M/M Jul
20 Aug 2021 Japan CPI NSA Jul
20 Aug 2021 Japan CPI Index Ex Fresh Food Jul
20 Aug 2021 Japan CPI Less Food and Energy Jul
20 Aug 2021 China (Mainland) Loan Prime Rate 1Y Aug
20 Aug 2021 China (Mainland) Loan Prime Rate 5Y Aug
20 Aug 2021 United Kingdom Retail Sales MM Jul 0.5%
20 Aug 2021 United Kingdom Retail Sales Ex-Fuel MM Jul 0.3%
20 Aug 2021 United Kingdom Retail Sales YY Jul 6.4%
20 Aug 2021 Norway GDP Growth Mainland Q2 1.7%
20 Aug 2021 Canada Retail Sales MM Jun 4.4%

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Beloved mall retailer files Chapter 7 bankruptcy, will liquidate

The struggling chain has given up the fight and will close hundreds of stores around the world.



It has been a brutal period for several popular retailers. The fallout from the covid pandemic and a challenging economic environment have pushed numerous chains into bankruptcy with Tuesday Morning, Christmas Tree Shops, and Bed Bath & Beyond all moving from Chapter 11 to Chapter 7 bankruptcy liquidation.

In all three of those cases, the companies faced clear financial pressures that led to inventory problems and vendors demanding faster, or even upfront payment. That creates a sort of inevitability.

Related: Beloved retailer finds life after bankruptcy, new famous owner

When a retailer faces financial pressure it sets off a cycle where vendors become wary of selling them items. That leads to barren shelves and no ability for the chain to sell its way out of its financial problems. 

Once that happens bankruptcy generally becomes the only option. Sometimes that means a Chapter 11 filing which gives the company a chance to negotiate with its creditors. In some cases, deals can be worked out where vendors extend longer terms or even forgive some debts, and banks offer an extension of loan terms.

In other cases, new funding can be secured which assuages vendor concerns or the company might be taken over by its vendors. Sometimes, as was the case with David's Bridal, a new owner steps in, adds new money, and makes deals with creditors in order to give the company a new lease on life.

It's rare that a retailer moves directly into Chapter 7 bankruptcy and decides to liquidate without trying to find a new source of funding.

Mall traffic has varied depending upon the type of mall.

Image source: Getty Images

The Body Shop has bad news for customers  

The Body Shop has been in a very public fight for survival. Fears began when the company closed half of its locations in the United Kingdom. That was followed by a bankruptcy-style filing in Canada and an abrupt closure of its U.S. stores on March 4.

"The Canadian subsidiary of the global beauty and cosmetics brand announced it has started restructuring proceedings by filing a Notice of Intention (NOI) to Make a Proposal pursuant to the Bankruptcy and Insolvency Act (Canada). In the same release, the company said that, as of March 1, 2024, The Body Shop US Limited has ceased operations," Chain Store Age reported.

A message on the company's U.S. website shared a simple message that does not appear to be the entire story.

"We're currently undergoing planned maintenance, but don't worry we're due to be back online soon."

That same message is still on the company's website, but a new filing makes it clear that the site is not down for maintenance, it's down for good.

The Body Shop files for Chapter 7 bankruptcy

While the future appeared bleak for The Body Shop, fans of the brand held out hope that a savior would step in. That's not going to be the case. 

The Body Shop filed for Chapter 7 bankruptcy in the United States.

"The US arm of the ethical cosmetics group has ceased trading at its 50 outlets. On Saturday (March 9), it filed for Chapter 7 insolvency, under which assets are sold off to clear debts, putting about 400 jobs at risk including those in a distribution center that still holds millions of dollars worth of stock," The Guardian reported.

After its closure in the United States, the survival of the brand remains very much in doubt. About half of the chain's stores in the United Kingdom remain open along with its Australian stores. 

The future of those stores remains very much in doubt and the chain has shared that it needs new funding in order for them to continue operating.

The Body Shop did not respond to a request for comment from TheStreet.   

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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),




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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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…



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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