Sunday June 29th 2008
TAYLOR ON THE GLOBAL STOCK CRASH!
Jay Taylor
Over the past week or two, the Royal Bank of Scotland talked about prospects of a global equity market crash. If the following chart of the Morgan Stanley India Investment ETF (Symbol IIF) is not a crash, I don’t know what is! In just one day, on Thursday, June 26, this broad based ETF representation of the Indian Equity markets fell by an astounding 27% to $23.53. On Friday it fell by an additional $0.34 to close the week at $23.19. On Friday, I received a call from my Chinese friend Chen Lin, who keeps up with happenings in his native country by personal contacts with friends and relatives back there as well as in the Chinese press. Chen called my attention to the fact that Vietnam now has an inflation rate north of 25% and interest rates in the low 20% range
International Forecaster June 2008 (#8) - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
Poof! Virtually all stock market gains for the past two years have just gone up in smoke. That is because all those gains were falsely and fraudulently created and contrived by the President's Working Group on Financial Markets, a/k/a the Plunge Protection Team (PPT), in a deceitful and unprecedented "Puff-the-Fluff" rally extravaganza which pushed stock markets into a state of suspended animation that was both totally unjustified and in complete and utter contravention of every market fundamental known to man. This stock market anti-gravity machine was powered principally by multiple billions of dollars of liquidity provided daily by the Fed through its repo pool.
More Warnings from Europe: Fortis Bank Forecasts a US Financial Market Meltdown
We won't disagree with the forecast, although timing may be another matter, and we do have our 'talking their book' filters in place.As background, Fortis has been making some moves to raise 8 billion euros in capital, and the stock was sold sharply in a share offering last week, out of fears of shareholders dilution and further troubles at the bank.
Interestingly enough, Fortis is part of the tripartite acquisition of ABN Amro, along with Banco Santander and the Royal Bank of Scotland, the largest bank takeover in history. The US retail operations were separately taken by Citigroup. ABN Amro was one of the largest banks in Europe and had operations in about 63 countries around the world.
Cheerleaders turn backs on reality
By John Browne
When listening to the typical, television-based, Wall Street cheerleader work themselves up into a bull market frenzy, one is tempted to wonder if they ever bother to compare the movie that is rolling along in their heads to the one that is occurring in the outside world. Perhaps for those living in a media bubble, the only reality that matters is the one reflected in the camera lens.Over the past nine months, we have seen increasing signs of economic contraction and falling corporate earnings in America. Although the financials, airlines, auto manufacturers, and retailers have grabbed the headlines, few American sectors are immune from the pain. Meanwhile, the cheerleaders and market pundits have advised that recession fears are overblown and that investors should buy "unnecessarily" beaten down American stocks
VIDEO: Peter Schiff vs Cheerleaders June 26 2008 Fox Business News
Iraq and the New York Times
By ROBERT FANTINA
In his most recent editorial, Thomas Friedman of the New York Times discusses the great progress he sees in Iraq, and attributes it to President George Bush’s troop ‘surge’ of eighteen months ago. A look at just a few of Mr. Friedman’s bizarre comments causes one to wonder why he is writing for the Times and not for Mr. Bush himself.
“One of the first things I realized when visiting Iraq after the U.S. invasion was that the very fact that Iraqis did not liberate themselves, but had to be liberated by Americans, was a source of humiliation to them. It’s one reason they never threw flowers.”
So Mr. Friedman apparently buys into Mr. Bush’s definition of liberation. Let’s see now: following the invasion of a sovereign nation, one sets about to kill approximately 1,000,000 of its men, women and children, and drives an estimated 2,000,000 to 3,000,000 from their homes, many of them from the country.
Preparing the Battlefield
The Bush Administration steps up its secret moves against Iran.
by Seymour M. Hersh
L ate last year, Congress agreed to a request from President Bush to fund a major escalation of covert operations against Iran, according to current and former military, intelligence, and congressional sources. These operations, for which the President sought up to four hundred million dollars, were described in a Presidential Finding signed by Bush, and are designed to destabilize the country’s religious leadership. The covert activities involve support of the minority Ahwazi Arab and Baluchi groups and other dissident organizations. They also include gathering intelligence about Iran’s suspected nuclear-weapons program.
It Was Oil, All Along
Four thousand American soldiers dead, tens of thousands permanently wounded for life, hundreds of thousands of dead and crippled Iraqis plus five million displaced, and a cost that will mount into trillions of dollars, say Bill Moyers and Michael Winship.
Oh, no, they told us, Iraq isn't a war about oil. That's cynical and simplistic, they said. It's about terror and al Qaeda and toppling a dictator and spreading democracy and protecting ourselves from weapons of mass destruction.But one by one, these concocted rationales went up in smoke, fire and ashes. And now the bottom line turns out to be....the bottom line. It is about oil.
Iran to control Gulf oil route if attacked
Iranian Revolutionary Guards commander says that Tehran able to retaliate if Iran came under attack.
TEHRAN - The commander of the Revolutionary Guards said Iran would impose controls on shipping in the vital Gulf oil transit route if the Islamic Republic came under attack, a newspaper reported on Saturday.Speculation about a possible attack on Iran because of its disputed nuclear ambitions has risen since a report this month said Israel had practiced such a strike."Naturally every country under attack by an enemy uses all its capacity and opportunities to confront the enemy. Regarding the main route for exiting energy, Iran will definitely act to impose control on the Persian Gulf and Strait of Hormuz," commander-in-chief Mohammad Ali Jafari told Jam-e Jam newspaper.
Iran ready to strike at Israel’s nuclear heart
Uzi Mahnaimi in Tel Aviv
Iran has moved ballistic missiles into launch positions, with Israel’s Dimona nuclear plant among the possible targets, defence sources said last week.The movement of Shahab-3B missiles, which have an estimated range of more than 1,250 miles, followed a large-scale exercise earlier this month in which the Israeli air force flew en masse over the Mediterranean in an apparent rehearsal for a threatened attack on Iran’s nuclear installations. Israel believes Iran’s nuclear programme is aimed at acquiring nuclear weapons.
Rumours of war spread as Israel flexes muscles
The meeting at the home of Israel's Prime Minister Ehud Olmert was not supposed to be public. The man invited into Olmert's official residence in Jerusalem was Aviam Sela, architect of Operation Opera in 1981, when Israel launched a long-range strike against Iraq's Osirak nuclear reactor. Regarded as a brilliant aviation tactician, in particular in the field of in-flight refuelling, Olmert's office tried to play down the meeting. But the rumours in Israel's defence establishment were already flying.Sela, according to sources close to the meeting, had been called in so that Olmert could ask his opinion on the likely effectiveness of a similar raid to Opera on the nuclear installations of Iran.
Shadow of war looms as Israel flexes its muscle
Israeli fighter jets flew 1,500 kms across the Mediterranean this month, in a dry run for an attack on Iran's nuclear facilities. Tehran has threatened to treat such a raid as a declaration of war. As the Middle East braces itself for a stand-off of epic proportions, how close is the region to that nightmare scenario? The meeting at the home of Israel's Prime Minister Ehud Olmert was not supposed to be public. The man invited into Olmert's official residence in Jerusalem was Aviam Sela, architect of Operation Opera in 1981, when Israel launched a long-range strike against Iraq's Osirak nuclear reactor.
Former Israeli spymaster: Israel has one year to bomb Iran
By Reuters and Haaretz Service
Israel must destroy Iran's nuclear program within the next 12 months or risk being attacked with an atomic bomb itself, the former head of the Mossad told the British Sunday Telegraph."As an intelligence officer working with the worst-case scenario, I can tell you we should be prepared," Shabtai Shavit, who served as Mossad chief from 1989 to 1996, told the British paper."We should do whatever necessary on the defensive side, on the offensive side, on the public opinion side for the West, in case sanctions don't work. What's left is a military action."
Mugabe claims 'sweeping victory'
The election has been widely branded a sham
Robert Mugabe has said he is heading for a "sweeping victory" in Zimbabwe's unopposed run-off presidential poll.
Officials have scheduled his inauguration for Sunday afternoon, even though official results are yet to be published.He was the only candidate after the opposition boycotted the vote amid reports of violence and intimidation.
Robert Mugabe’s thugs shout: ‘Let’s kill the baby’
Christina Lamb
A baby boy had both legs broken by supporters of President Robert Mugabe to punish his father for being an opposition councillor in Zimbabwe.Blessing Mabhena, aged 11 months, was seized from a bed and flung down with force as his mother, Agnes, hid from the thugs, convinced that they were about to murder her.She heard one of them say, “Let’s kill the baby”, before Blessing was hurled on to a bare concrete floor.Blessing, who may never be able to walk properly, was one of the youngest victims of atrocities against the opposition party Movement for Democratic Change in the run-up to last Friday’s sham presidential election.
Blood money: the MPs cashing in on Zimbabwe's misery
Tory frontbenchers are among those with shares in companies accused of propping up the violent – and now illegal – regimein Harare. Jane Merrick and Archie Bland report Shadow Home Secretary Dominic Grieve heads a list of Tory MPs with sizeable shareholdings in companies accused of propping up Robert Mugabe's regime, The Independent on Sunday can reveal today.Three of David Cameron's frontbenchers are among six Conservatives – and one Liberal Democrat – with investments together worth more than £1m in firms trading in Zimbabwe. The revelations will embarrass the Tory leader, who has sought to take the moral high ground over the crisis in Zimbabwe.
Mandela: The legend and the Legacy. Part 1
It is often said that one man's terrorist is another man's freedom fighter, however, this usually means that the other man has been less than fastidious in his choice of hero, or that the “freedom fighter” in question was on the crowd pleasing side.On the 27th of June, London's Hyde Park will play host to a concert in honour of Nelson Mandela's 90th birthday and we can be assured that it will receive wall to wall coverage by a star struck and worshipping media, who will continue to laud Mandela as one of the greatest, or indeed the greatest, heroes of our time.No doubt the beaming old man will appear on stage in one of his trademark multi-coloured shirts and cheerily acknowledge the cheers of the adoring crowd, most of whom have been taught to believe in his sainthood since their first days in primary school, which, for many of them, will have occurred around the same time their hero walked free from Robben Island.
Nelson Mandela removed from terror list
THE US Senate has approved a bill to remove former South African president Nelson Mandela and his African National Congress from the US terror watch list."Today the United States moved closer at last to removing the great shame of dishonouring this great leader by including him on our government's terror watch list," said Senator John Kerry.The bill now heads to the White House, where it is expected to be signed by President George W. Bush in time for the anti-apartheid leader and Nobel Peace Prize winner's 90th birthday on July 18."Nelson Mandela does not belong on a terrorist watch list - period," said Senator Sheldon Whitehouse. "The Senate's vote today will help fix a problem that has caused injustice to South African leaders and embarrassment to the United States."
Saturday June 28th
TRUTH TO POWER
Video: Ron Paul on Iran & Energy (C-SPAN 6/26)
$200-a-barrel oil
As forecasters take that possibility more seriously, they describe fundamental shifts in the way we work, where we live and how we spend our free time
The more expensive oil gets, the more Katherine Carver's life shrinks. She's given up RV trips. She stays home most weekends. She's scrapped her twice-a-month volunteer stint at a Malibu wildlife refuge -- the trek from her home in Palmdale just got too expensive.How much higher would fuel prices have to go before she quit her job? Already, the 170-mile round-trip commute to her job with Los Angeles County Child Support Services in Commerce is costing her close to $1,000 a month -- a fifth of her salary. It's got the 55-year-old thinking about retirement.
Record oil divides majors, producers ahead of bash
Thousands of delegates to converge in World Petroleum Congress to offer explanations for high crude prices.
LONDON - Record crude prices above $141 a barrel have set up a showdown between oil majors and top oil producing nations as the industry prepares for its biggest gathering in three years.Thousands of delegates are set to converge on Madrid next week for the World Petroleum Congress (WPC) where they will offer conflicting explanations for record high crude prices, with oil industry chief executives likely to cite a lack of supply and oil ministers set to blame speculative investors.
Blame Governments, Not Speculators for High Oil Price
by Stefan M.I. Karlsson
Since August 2007, the price of oil has nearly doubled from under $70 per barrel to more than $135 per barrel. This is of course a big problem for the world economy. Not only will it cause massive redistribution of resources from consumers to producers, but by making transportation and production that uses petroleum products as an input, it will slow economic growth. And many consumers, particularly in America, are shocked and angered by the high prices. And since it is election year in America, this means the politicians all say they will try to fix the problem.
Exchange Controls are Proposed for the U.S.A.
Source: www.GoldForecaster.com
In a long week in which attempts to lower the oil price and talks about the $ were disappointed [ G-8 meeting and the oil producer’s meeting in Saudi Arabia], the threat of much higher oil prices, a weaker $ and perhaps a vicious fall in equity market in the next few months, Joseph Lieberman, the head of the Senate Banking Committeee. is proposing what in effect are Exchange Control measures on commodity markets and foreign exchanges that host commodity dealing. This week we saw a glimpse of what is to be proposed and is proposing as we send this out.
Iran says Gulf oil route at risk if attacked
By Zahra Hosseinian Reuters
TEHRAN: The Revolutionary Guards said Iran would impose controls on shipping in the vital Gulf oil route if Iran was attacked and warned regional states of reprisals if they took part, a newspaper reported on Saturday.Fear of an escalation in the standoff between the West and Iran, the world's fourth largest oil producer, have been one factor propping up sky-high oil prices. Crude hit a record level on international markets near $143 a barrel on Friday.
Exxon Mobil, Shell, Total and BP return to Iraq
Analysts dampen hopes of economic recovery
James Hider in Baghdad
It was meant to be the rising tide that would lift the Iraqi economy out of years of war and sanctions, to finance reconstruction and guarantee cheap global supplies.Yet, five years on, big oil is only just starting to move cautiously into Iraq and, despite record prices, experts caution against another false dawn of optimism. Four oil giants - Exxon Mobil, Shell, Total and BP - are to announce next week no-bid contracts to start servicing the creaking Iraqi oil infrastructure, crippled for decades by lack of investment and often targeted by insurgents.
Financial Markets Summary For The Week of June 30-July 4
The country may be celebrating its independence, but the markets will see a week of very important data and an address on the financial crises and the economy from the Fed and US Treasury. The major events of the week will be the publication of the June non-farm payrolls report on Thursday. Wednesday will see an address on the economy by US Treasury Secretary Paulson and a talk on the current global financial disruption by FOMC Gov. Mishkin. Monday will see the release of the Chicago PMI and total vehicle sales for June. The June estimate of the ISM will be published the following day, with factor orders and the ADP employment estimate the primary data released on Wednesday. The week will conclude with the aforementioned June non-farm payrolls data, the ISM non-manufacturing survey and the weekly jobless claims series.
Too Late To Buy Gold?
Adrian Ash
"...Turn up the gloom! Investors will do well merely to preserve wealth from here..."
IT'S HARD TO BE BULLISH on gold when there's so much bad news in the world.After all, Gold offers a refuge against bad times ahead. Like all good insurance, it's best bought before trouble arrives – not during or after.And just how much worse can the news get from here?
1. The Dow's on tracks to close out its worst June since the Great Depression, down almost 10% for the month;
2. GM's stock is trading at a 54-year low, taking it right back to when CEO Charles Wilson declared "what was good for the country was good for General Motors and vice versa";
3. US Dollars – the bedrock of world forex reserves – now buy one-third less against the rest of the world's money compared with 2002;
On the Rocks
Bob Chapman
The Conference Board's consumer confidence index for June came in at an abysmal 50.4. This reading is down 13.25% from May's 58.1, is less than half of last June's 103.9 and is the lowest reading in 16 years. The "experts" were expecting 56.5. And then there is the index of consumers' expectations for the future, which hit an all-time low, declining 13.31% to 41.0 in June from 47.3 in May. Seventy percent of our economy is driven by consumer spending. This simple set of facts tells the whole story. It is a certifiable disaster in the making. Next, let's not forget the hundreds of billions in yearly home equity extractions that have all but completely dried up.
CNBC VIDEO :A Technical Outlook
Dow 10,000
Discussing where the market goes next, with Louise Yamada, managing director of Louise Yamada Technical Rerearch Advisors
The Greater Depression and What You Should Do About It
Source: Doug Casey, International Speculator
For international investment expert Doug Casey, there’s more than a recession on the horizon… he recommends battening down now for the rough seas ahead... with some special information about making sure your investments can weather the coming storms.
I believe in the existence of the business cycle. That’s partly because almost everything in life is cyclical, which has been recognized at least since the tale about Joseph and the seven fat years and seven lean years. The Austrian school of economic thinking explains why the business cycle keeps coming around and does so without relying on a soothsayer to interpret your dreams. I urge you to read the appropriate chapters in either Crisis Investing for the Rest of the 90’s or Strategic Investing for a full explanation.
Intervention Will Not Stop the Dollar's Slide
This week the Federal Reserve took a step closer to acknowledging reality. Unfortunately it didn't let that admission move it from a policy course firmly guided by fantasy. In its policy statement, Bernanke & Co. took the important step in noting that inflation expectations had taken hold in the country at large. However, in asserting that it expects inflation to moderate this year and next, the Fed gave no indications that these heightened expectations are gaining traction within the Open Market Committee itself. As a result, it signaled no likelihood that it was actually prepared to do something to fight a problem which it doesn't really believe exists in the first place.
Reopening black farmers' suits could cost billions
The Associated Press
WASHINGTON: When Congress reopened the government's discrimination settlement with black farmers, lawmakers budgeted just $100 million for damages. They probably should have handed over a blank check.With more than 70,000 potential claimants, the liability could exceed $3 billion — three times what was paid out in the original 1999 agreement.The settlement was reopened thanks to legislation added to the farm bill passed last month. It illustrates how lawmakers often manipulate pay-as-you-go budget rules to give the appearance they are balancing the federal checkbook.
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Zimbabwe’s pale barons
Who’s bankrolling Zimbabwean president Robert Mugabe, and what kind of assets are being pimped around?
Barry Sergeant
Why have the names of those bankrolling Zimbabwe's deranged president, Robert Mugabe, been kept so well under wraps? For one thing, the deals behind the bankrolling are not simple, and for another, the robber barons are pretty smart and can also be pretty damn dangerous.Depending on how you count, there are four or five individuals bankrolling Mugabe. No matter how you count, they are all palefaces. This may be surprising, given Mugabe's year 2000 "land reform" package where he booted an estimated 4,000 palefaces off Zimbabwe's commercial farms.
Fear in Zimbabwe as voters awake to Operation Red Finger
Catherine Philp in Harare
In the cities, the streets were all but deserted. In the country, the queues stretched for yards. But everywhere the mood was the same: fear, dread and resignation.The dawn that illuminated President Mugabe’s pantomime election day could not have been more different to that of three months ago, when three challengers shared the ballot with him and voters got up before first light, excited to be part of the change they scented.
'Five killed' in Zimbabwe vote beatings
HARARE, Zimbabwe (CNN) -- Zimbabwe opposition leader Morgan Tsvangirai denounced Friday's presidential runoff election as an "exercise in mass intimidation" amid fresh allegations that five people were killed ahead of the vote as a consequence of state-sponsored beatings. In a party statement e-mailed to CNN, Tsvangirai's Movement for Democratic Change said that four of its officials and the wife of one of them had died ahead of the vote as a result of beatings, describing the deaths as "state-sponsored and -perpetrated murders."Zimbabwe's Deputy Minister of Information, Bright Matonga, said he would not "dignify the charges with comment" and said the voting process was peaceful. He also said MDC members and supporters burned down some polling stations.
UN rules out calling Zimbabwe vote illegitimate
The UN security council failed to agree on declaring Zimbabwe's runoff election illegitimate today in the face of South African opposition.Instead, it merely issued an oral statement of regret.US Ambassador to the UN Zalmay Khalilzad, who chairs the council this month, told reporters after a contentious, hours-long debate, that members "agreed that conditions for free and fair elections did not exist and it was a matter of deep regret that the election went ahead in these circumstances".
Mugabe's secret war - in Britain
Agents of Robert Mugabe's regime are harassing and intimidating Zimbabwean dissidents in Britain in an attempt to silence his political rivals and disrupt vital fundraising for Morgan Tsvangirai's opposition Movement for Democratic Change.Mr Mugabe's feared security force, the Central Intelligence Organisation (CIO), is waging a highly-organised campaign to terrify the 4,000 MDC members living in the UK. It involves surveillance, threats against family members in Zimbabwe, menacing late-night phone calls and bogus messages saying that fundraising activities are cancelled or disrupted.
Zimbabwe: Leftists to blame for Robert Mugabe's blood-letting
By Simon Heffer
A few years ago, when the tyrant of Zimbabwe was moving from being wicked to being downright evil, I wrote that we should invade Harare, depose him, and supervise free elections. Invited to appear on a BBC programme to defend this stance, I was assailed by an "Africa expert" who told me that diplomatic pressure on Mugabe was bound to work, that the idea of sending the Parachute Regiment in to sort the monster out was offensively colonialist, and that I was wrong.
Another 'anarchic' ANC meeting ends in brawl
Knives were used during a brawl at an ANC branch meeting in Mpumalanga which left nine people in hospital, at least one with a fractured skull. Eight people were later arrested.There were also unconfirmed reports that guns were produced and that some people were in a coma.The provincial ANC has expressed its shock and dismay at the actions of the Chrissiesmeer members.ANC regional secretary and MP Sindisiwe Chikunga said she visited the hospital patients and found some had stab wounds and some had fractured skulls
More ANC war-talk
A parliamentary session dedicated to the 90th birthday celebrations of former president Nelson Mandela on Friday was marred by yet another top ANC member's threats of violence.Ironically, the MP, Joel Mbhazima Sibiya, was delivering the final speech in the session dedicated to Mandela, a Nobel Peace Prize laureate.Sibiya's threat to take up arms was made when he told parliament that the ANC's armed struggle was not abandoned - but only suspended - after Mandela was released from prison in 1990.Sibiya said even though his statement would make some people uncomfortable, only history would tell if it would be necessary to again take up arms.
Nelson Mandela removed from terror list
THE US Senate has approved a bill to remove former South African president Nelson Mandela and his African National Congress from the US terror watch list."Today the United States moved closer at last to removing the great shame of dishonouring this great leader by including him on our government's terror watch list," said Senator John Kerry.The bill now heads to the White House, where it is expected to be signed by President George W. Bush in time for the anti-apartheid leader and Nobel Peace Prize winner's 90th birthday on July 18.
"Nelson Mandela does not belong on a terrorist watch list - period," said Senator Sheldon Whitehouse. "The Senate's vote today will help fix a problem that has caused injustice to South African leaders and embarrassment to the United States."
No Guilt
by Charley Reese
It's funny that Ralph Nader, the perennial presidential-election spoiler, is claiming that Barack Obama is appealing to white guilt. I've seen no evidence of that. In fact, Obama has been trying his best to run a colorblind campaign.The truth is, except for his skin color, Obama is your standard Northern liberal. If there's only a dime's worth of difference between Republicans and Democrats, there's only a penny's worth of difference between Obama and Teddy Kennedy on matters of policy. Obama, however, is certainly the smarter of the two.
Hard times for affirmative action
Barack Obama's political success might claim an unintended victim: affirmative action, a much-debated policy that he supports.Already weakened by several court rulings and state referendums, affirmative action now confronts a challenge to its very reason for existing. If Americans make a black person the leading contender for president, as nationwide polls suggest, how can racial prejudice be so prevalent and potent that it justifies special efforts to place minorities in coveted jobs and schools?"The primary rationale for affirmative action is that America is institutionally racist and institutionally sexist," said Ward Connerly, the leader of state-by-state efforts to end what he and others consider policies of reverse discrimination.
Zionism's Dead End
Separation or ethnic cleansing? Israel's encaging of Gaza aims to achieve both
by Jonathan Cook
The following is taken from a talk delivered at the Conference for the Right of Return and the Secular Democratic State, held in Haifa on June 21.
In 1895 Theodor Herzl, Zionism's chief prophet, confided in his diary that he did not favor sharing Palestine with the natives. Better, he wrote, to "try to spirit the penniless [Palestinian] population across the border by denying it any employment in our own country … Both the process of expropriation and the removal of the poor must be carried out discreetly and circumspectly."
The French connection
By Meir Zamir
On December 15, 1947, at approximately 1:45 P.M., about 20 fighters of the Haganah - the pre-state underground Jewish militia - seized a British truck south of Acre. The men, armed but wearing civilian clothing, confiscated about half a ton of documents, packed into eight sealed steel containers and 12 sacks of diplomatic mail. The documents had been sent from the British legation in Beirut to Haifa Port, from which they were to be transported to Britain.The truck was taken to an unknown location. The driver and armed guards were later found in an abandoned building near Kiryat Ata.
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