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Market Update: Risk-Off, Reality-On

Tyler Durden's picture




 

Things are escalating rather quickly... Treasuries have soared to yesterday's low yields (below 1.90%), S&P 500 futures are cracking lower on heavy volume -10 points (with the cash S&P below yesterday's lows) - after the other indices all went green earlier. The FX market is in a mini-crisis with EURUSD dumping and JPY strengthening considerably and rapidly. In Europe, it is worse as Portuguese, Spanish , and Italian bond spreads are snapping wider to post Cyprus wides; Spanish and Italian equity markets are tanking down 3-4% on the week; and GGBs are back under EUR50 - their lowest in 3 months. Gold and Silver are rising as Copper and Oil slide. Swiss 2Y rates are negative at their lowest in over 2 months. VIX is up 33% from Thursday's lows and back above 15% - biggest 2-day jump since Nov 11.

Equity Indices once again managed to get green from Friday but that ended rapidly...

 

and while S&P 500 cash is below yestereday's lows, futures stil have some room to test...


 

EUR weakness and JPY strength... oops

as EURUSD breaks below the 200DMA...

 

Protection is bid as VIX leads the way down...

 

 

and Europe is getting out of hand fast...

 

Charts: Bloomberg 

 


 

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Tue, 03/19/2013 - 12:13 | 3347537 Cursive
Cursive's picture

Wake me up when we get to SPX 600.  I might be interested in "investing" again.

Tue, 03/19/2013 - 12:18 | 3347572 otto skorzeny
otto skorzeny's picture

I'm holding out for DJIA 600

Tue, 03/19/2013 - 12:21 | 3347593 Cursive
Cursive's picture

@otto skorzeny

We can always hope.

Tue, 03/19/2013 - 12:23 | 3347615 Element
Element's picture

Full of HFT bots though.

Tue, 03/19/2013 - 12:30 | 3347668 DoChenRollingBearing
DoChenRollingBearing's picture

This may be just HFT as well, but I see that gold just started (a few minutes ago) another little mini-spike...

 

***

The Central Bank of DoChenRollingBearing added some gold to its reserves just yesterday...

Tue, 03/19/2013 - 12:34 | 3347707 otto skorzeny
otto skorzeny's picture

I'm continuing my bank run.

Tue, 03/19/2013 - 12:39 | 3347728 DoChenRollingBearing
DoChenRollingBearing's picture

$1613 and still running...  But, I own gold for the long-haul, these short-term upspikes are a nice change, as usually gold goes DOWN after I buy it.

EDIT:

$1614 at 12:39 US ET...

Tue, 03/19/2013 - 12:45 | 3347804 MillionDollarBonus_
MillionDollarBonus_'s picture

Good thing I bought US treasuries as a hedge. Not only am I collecting a risk free return, I'm also hedged against any instability in the market.

Tue, 03/19/2013 - 12:46 | 3347811 otto skorzeny
otto skorzeny's picture

you're en fuego today

Tue, 03/19/2013 - 13:06 | 3347834 DoChenRollingBearing
DoChenRollingBearing's picture

I cannot argue with that short-term move, MDB.  H/T!  But, that seems to me to be smacking of trading..., at the right time (soon?), you may want to sell those Treasuries...

EDIT:

Au at $1615 now, just in case you wanted to know, MDB.

Tue, 03/19/2013 - 13:27 | 3348159 dumpster
dumpster's picture

a hedge against .. lol  your hedge was probably a foot long subway .. with white bread.

did they give you back your 25 cent change or did you walk out with out giving the tip

 

Tue, 03/19/2013 - 12:49 | 3347786 TruthInSunshine
TruthInSunshine's picture

When the SPX is at 600 again, you'll know beyond any iota, atom or quark that the Higgs boson bottom is not in, and that Bernanke's "Virtuous Circle" monetary/macroeconomic/psychological/behavior modification/sociological/marketing/telemarketing/as-seen-on-TV policies have been discovered to have been fraudulent by even the mass of sheeple, so I wouldn't recommend buying the dip at that time.

Besides, most publicly traded corporations will already own most of their now deeply distressed "stock" anyways, long ago having borrowed money at 0.5% to 1% by corporate bond floats and having bought back huge blocks of their own shares during the "salad days" of 2009 through 2013.

The kick-the-can global shell of an economic monetary structure, as hollow as it now is- translucent & brittle- is all riding on The Bernank's ability to keep successfully priming the "Virtuous Circle" pump, if even for a little while longer.

Tue, 03/19/2013 - 12:59 | 3347909 azzhatter
azzhatter's picture

Demonstrates the idiocy of ZIRP. People really have no incentive to keep any money in banks, there is no return or negative return and now the risk is explicit. I think we should see bank runs everywhere including the US. Think about it, keeping your money in the bank is now risk only-no reward

Tue, 03/19/2013 - 14:14 | 3348019 TruthInSunshine
TruthInSunshine's picture

Absolutely the opposite - the smart money, well those who have actual, realized "money," are all about preservation of capital at this point.

Of course, there aren't that many smart people as a % of the population, let alone that many people who have actual, rather than nominal/balance sheet money.

BTFD!

Tue, 03/19/2013 - 12:41 | 3347776 Praetorian Guard
Praetorian Guard's picture

Who cares, this shit is coming...

http://youtu.be/-Usz5EzMlfY

Tue, 03/19/2013 - 12:50 | 3347839 venturen
venturen's picture

what is investing?

Tue, 03/19/2013 - 12:13 | 3347542 Headbanger
Headbanger's picture

What's a "reality"??

Tue, 03/19/2013 - 12:17 | 3347566 otto skorzeny
otto skorzeny's picture

those are tv shows that people watch to escape the "real" reality(the one where everybody is broke)

Tue, 03/19/2013 - 12:28 | 3347647 SheepDog-One
SheepDog-One's picture

Funny how 'reality shows' are now just showing the most pathetic things imaginable so that most people watching can say 'Whew! Well I feel better, at least I'm not THEM!'

Tue, 03/19/2013 - 12:42 | 3347726 James_Cole
James_Cole's picture

Funny how 'reality shows' are now just showing the most pathetic things imaginable so that most people watching can say 'Whew! Well I feel better, at least I'm not THEM!'

You're out of your mind.

http://gawker.com/5984383/coming-out-is-weird-watch-a-supercut-of-people...

Tue, 03/19/2013 - 12:57 | 3347888 akarc
akarc's picture

I thought it was because the viewers could relate.

Tue, 03/19/2013 - 12:23 | 3347611 eclectic syncretist
eclectic syncretist's picture

like when the lookouts spotted the iceberg from the Titanic and were praying to God that it wasn't too late to turn and miss it. 

We are not far from that point in the markets right now.

Tue, 03/19/2013 - 12:30 | 3347662 James_Cole
James_Cole's picture

like when the lookouts spotted the iceberg from the Titanic and were praying to God that it wasn't too late to turn and miss it. 

There's the ultimate metaphor for humans, always hoping for the best while gunning right for an iceberg! 

Doesn't matter if people are really stupid or really smart, that seems to the one constant trait among most I've met. 

Tue, 03/19/2013 - 13:28 | 3348166 PeeramidIdeologies
PeeramidIdeologies's picture

It works on many levels. It's a well know fact that one can only see 10% of an iceberg from surface...

Tue, 03/19/2013 - 13:30 | 3348170 PeeramidIdeologies
PeeramidIdeologies's picture

DP.

Tue, 03/19/2013 - 12:39 | 3347759 tinsmith
tinsmith's picture

Remember that if the Titanic had just hit it dead on she would have been damaged, but could have stayed afloat and either limped to port or stayed up long enough for help to arrive. In a parallel to what TPTB have been doing, it was the attempt to 'avoid the pain' that doomed her. All of the can kicking and shenanigans has breached our hull, and the watertight compartments are filling. We are truly just re-arranging deck chairs at this point.

Tue, 03/19/2013 - 12:40 | 3347761 tinsmith
tinsmith's picture

Double post

Tue, 03/19/2013 - 12:14 | 3347545 Dr. Engali
Dr. Engali's picture

Darn that triple top at S&P 1565 is a bitch.

Tue, 03/19/2013 - 12:25 | 3347626 SheepDog-One
SheepDog-One's picture

Funny how the 'trouble times' conveniently come right at the old market tops?

Tue, 03/19/2013 - 12:34 | 3347698 Dr. Engali
Dr. Engali's picture

Yep it helps proved cover for new printing to help push the averages through resistance.

Tue, 03/19/2013 - 12:15 | 3347548 McMolotov
McMolotov's picture

Burnin' down the house.

Tue, 03/19/2013 - 13:44 | 3348281 GoinFawr
GoinFawr's picture

They must be using natural gas... it's having another opposite day

Tue, 03/19/2013 - 12:15 | 3347552 slyhill
slyhill's picture

Make moar popcorn!

Tue, 03/19/2013 - 12:15 | 3347557 Hedgetard55
Hedgetard55's picture

Ben will fix this and print up 6 bil for the Cypriot banks.

Tue, 03/19/2013 - 12:37 | 3347747 CrimsonAvenger
CrimsonAvenger's picture

No kidding! He's printing $85B a month, and he can't spare six to paper this over? On $85B, $6 is like the tip you'd leave for a bad waitress.

Tue, 03/19/2013 - 12:16 | 3347560 otto skorzeny
otto skorzeny's picture

flat by close-"Stocks are off their lows for the day"

Tue, 03/19/2013 - 12:17 | 3347569 BlueCheeseBandit
BlueCheeseBandit's picture

GREAT GLORIOUS DAY! A time of healin for the wrongs that have been done to us all!

Tue, 03/19/2013 - 12:17 | 3347571 The Invisible Foot
The Invisible Foot's picture

They still have the ramp-up attempt at 3.

Tue, 03/19/2013 - 12:20 | 3347588 glenlloyd
glenlloyd's picture

I'm betting that it'll be much less rampy today

Tue, 03/19/2013 - 12:22 | 3347599 fuu
fuu's picture

Maybe off rampy.

Tue, 03/19/2013 - 12:22 | 3347603 akarc
akarc's picture

http://uncensored.co.nz/2011/05/17/new-zealand-banks-pre-positioning-to-...

Apparently New Zealand is preparing just like Cyprus

Tue, 03/19/2013 - 13:06 | 3347978 DosZap
DosZap's picture

http://uncensored.co.nz/2011/05/17/new-zealand-banks-pre-positioning-to-...

Apparently New Zealand is preparing just like Cyprus

 

"There will come a time when what seems right will be wrong, and wrong will be seen as right".

 

We have entered that truism a while back(and not just the Pols/Bankers but the populations thinking as well)

How can you justify a depositor funded bailout, when their purpose is to just be depsitors?.

Why should they be held accountable for crappy investing on the Banks part, using their funds?.

YOU cannot. And no such thing as a wealth tax is either,taxing double is immoral and damnable.

New Zealand is also evidently gone FAR left.

Tue, 03/19/2013 - 12:18 | 3347577 LawsofPhysics
LawsofPhysics's picture

Right.  The "official" markets are a long way from reflecting any sort of reality or true price discovery.  What garbage.

Tue, 03/19/2013 - 12:22 | 3347601 LawsofPhysics
LawsofPhysics's picture

time to play dominoes...

Tue, 03/19/2013 - 12:18 | 3347580 Panafrican Funk...
Panafrican Funktron Robot's picture

Some reality to consider:  

In March 2006, housing permits (not seasonally adjusted) were at 1.94 million.

In March 2013, housing permits (not seasonally adjusted) were at 0.67 million.

Mind you, not seasonally adjusted housing permits are probably the only housing metric published by .gov that is has even a decent amount of connection to reality.

Welcome to the recovery.

Tue, 03/19/2013 - 12:33 | 3347696 Panafrican Funk...
Panafrican Funktron Robot's picture

Just to add to the tragicomedy:

In March 2006, the average sale price was 298K

In March 2013, the average sale price was 286K.

Now, consider that even per the b.s. CPI metric, we've experienced 15% total inflation in that period.  So, in "chained dollar" terms, that March 2013 number goes down to 243K.  Summary:

Permits are down 65% compared to 2006 peak.

Sale prices are down 18.5% compared to 2006 peak.

Tue, 03/19/2013 - 12:20 | 3347587 ekm
ekm's picture

Only if primary dealers and major euro banks default on their CDS loss payments. 

That would happen only if the Fed stops QE on Wednesday.

Tue, 03/19/2013 - 12:48 | 3347824 swissaustrian
swissaustrian's picture

Not gonna happen, EUR/USD is way too low for the FED.

Tue, 03/19/2013 - 13:05 | 3347971 ekm
ekm's picture

I don't think Fed matters any longer.

It's crude oil price that matters I'd say, Iran.

 

That's the reason QE became open ended IMO, so it could be stopped at no notice.

Tue, 03/19/2013 - 12:20 | 3347589 thismarketisrigged
thismarketisrigged's picture

reality in this market? na, cant be.

 

i love how the algos finally decided to go red, its about fucking time.

 

ben bernanke must be re typing his speech now to make sure the market does not tank tomorrow. 

 

it will prob go like this 

 

'' at this time, we have absolutey no plans to stop our purchasing. please feel free to continue buying equities as we will never let them fall too far in the future. you have my word''

 

fuck u bernanke and obama, u guys suck

Tue, 03/19/2013 - 12:20 | 3347591 digalert
digalert's picture

Now we're talking, I'm seeing liquiditeeeee

Tue, 03/19/2013 - 12:22 | 3347597 ebworthen
ebworthen's picture

Watch Bernanke throw a bone to the sheeple about the "stability of the U.S. banking system" and the "the U.S. would never tax (steal) your savings" even as he spends $85 BILLION per month on the backs of our progeny and does his best to debauch the currency.

Tue, 03/19/2013 - 12:22 | 3347604 EclecticParrot
EclecticParrot's picture

Splendid!  But the annoying thing is that, as I've become SO accustomed to the noon-time "do you want fries with that?" mysterious mini-ramp, I closed my lovely TZA position way too early and, as of this writing, left at least another full percent on the table.

Arrrghh !!!  I've got to find a way to get these accursed machines out of my head !  Perhaps a relaxing yoga class, with an instructor named Lulu ...

Tue, 03/19/2013 - 12:29 | 3347655 Awakened Sheeple
Awakened Sheeple's picture

This move is going to play out for a while, imo.

Just enjoy it, for now. :)

Tue, 03/19/2013 - 12:40 | 3347757 EclecticParrot
EclecticParrot's picture

Well, it does seem the 12:20 "buy-the-new-low" subroutine didn't make it fully to VWAP, so if we roll over here into a new intraday low, you may need to avoid counting yourself and stay awake for what could roll well into the overnight session.  However, my suspicion is we cross back to VWAP by 12:55, whip around a bit, with the final leg down not until 2:16.

Tue, 03/19/2013 - 13:10 | 3348004 Awakened Sheeple
Awakened Sheeple's picture

Well, I'm waiting for some kind of pop before I go short (i've completely missed this move). It'd be a fucking shame if I missed a liquidity crunch caused by bank runs after being a bear for so long. But big moves usually take time, so I'll just enjoy the show, for now. Good luck.

Tue, 03/19/2013 - 12:36 | 3347736 Panafrican Funk...
Panafrican Funktron Robot's picture

Yeah, I'm confused as to how a yoga pant could ever be considered "too sheer".  

Tue, 03/19/2013 - 13:11 | 3348016 Oldballplayer
Oldballplayer's picture

If you are doing upward facing dog behind that fat greek chick.  The damn thing looks like a kiwi with teeth.

Tue, 03/19/2013 - 12:44 | 3347801 MiltonFriedmans...
MiltonFriedmansNightmare's picture

+1 for the LULU reference, Parrot

Tue, 03/19/2013 - 12:23 | 3347610 Critical Path
Critical Path's picture

Cyprus government officials get to choose between pissing off Merkel or pissing off some Ex KGB/russian mob.... I'd take the former personally

Tue, 03/19/2013 - 12:26 | 3347616 Silverhog
Silverhog's picture

Silver stuck with the Knights of Ni. 

Tue, 03/19/2013 - 12:24 | 3347617 SheepDog-One
SheepDog-One's picture

Even Bernank's mighty presses of printing can't keep the 100 point daily ramps intact any longer? UH OH! I better go to China*Mart and get me some moar Snackey-Kakes!

Tue, 03/19/2013 - 12:32 | 3347680 EclecticParrot
EclecticParrot's picture

Great insight, but is it possible the Bearded One and his disciples will simply sneak in a sentence for tomorrow's minutes stating "ongoing global uncertaintly will be an additional factor along with the unemployment rate and inflation that will receive consideration . . . etc. etc." ? That would allow the algos to increase both the angles of incidence and reflection in their daily trendline-busting, pivot-destroying, stop-eating romps.

Tue, 03/19/2013 - 12:24 | 3347619 NoDebt
NoDebt's picture

The only thing that will put a real cramp in this market is a credible existential threat to the status-quo banking system. 

We're not there yet, but somebody's getting nervous about it, that's for sure.

It has attracted Sauron's gaze.

Tue, 03/19/2013 - 13:21 | 3348108 AynRandFan
AynRandFan's picture

Every time I see or hear someone say we are in a recovery, I think if that were true Bernanke would at least start shutting the floodgates instead of always opening them wider.

Tue, 03/19/2013 - 12:25 | 3347625 Biggieshort
Biggieshort's picture

Quick Ben, the market needs another hit on the crack pipe.

Tue, 03/19/2013 - 12:26 | 3347628 Seasmoke
Seasmoke's picture

and just think,  it is only TUESDAY !

Tue, 03/19/2013 - 12:26 | 3347634 eclectic syncretist
eclectic syncretist's picture

You want to know what this market is saying?  It's saying this to MDB and other Fedwishers.

http://www.youtube.com/watch?v=PmKxjHO2t7Y

Tue, 03/19/2013 - 12:28 | 3347653 CalibratedConfidence
CalibratedConfidence's picture

humor FTW!

Tue, 03/19/2013 - 12:31 | 3347673 Tao 4 the Show
Tao 4 the Show's picture

What to watch:

Gold market $6-8 from a short squeeze. If you hear the sound of Hedge (Fund) Hogs squealing as their performance pay evaporates, you will know it's underway.

Tue, 03/19/2013 - 12:32 | 3347686 seek
seek's picture

Mildly off topic, but I thought I'd ask like minded people here -- if you were going to balance some meaningful amount of assets out of the bank (say 100K for this purpose) and not put it into PMs, bitcoin, firearms/supplies or land, where would you put it today?

 

Tue, 03/19/2013 - 12:42 | 3347789 Awakened Sheeple
Awakened Sheeple's picture

IF you already have enough acreage to feed yourself through agriculture, then lakefront property. If the "recovery" goes as planned it'll appreciate in value (nominally). If SHTF you'll have food and water in your backyard.

Tue, 03/19/2013 - 12:43 | 3347792 LawsofPhysics
LawsofPhysics's picture

If you live in the cold, and weren't going to make those (common sense) investments, i'd burn it to stay warm, at least then you would release the actual calorie content.  Starve the beast, there is no other way.

Tue, 03/19/2013 - 13:16 | 3348062 Smuckers
Smuckers's picture

All of it goes straight up my own ass - to both protect it, and give the next bankster prick a nice round of paper cuts.

 

Tue, 03/19/2013 - 13:18 | 3348080 AynRandFan
AynRandFan's picture

Income property.

Tue, 03/19/2013 - 13:29 | 3348173 ekm
ekm's picture

Put is in a safe.

Tue, 03/19/2013 - 13:38 | 3348251 PeeramidIdeologies
PeeramidIdeologies's picture

There are different types of equipment that are very useful when leaving the grid. I would start going through your planned daily routine and decide which machines/equipment could possible come in handy. Different climates require different strageties. Just a thought :)

Tue, 03/19/2013 - 14:01 | 3348389 Panafrican Funk...
Panafrican Funktron Robot's picture

"not put it into PMs, bitcoin, firearms/supplies or land"

You should stockpile liquor, smaller bottles the better.  Solidly fungible in a barter scenario, and liquor keeps for a long time if you store it in your basement.  Also has medical uses (wound cleaning, pain management), and grain alcohol in particular makes an excellent firestarter.  

Tue, 03/19/2013 - 14:03 | 3348399 Panafrican Funk...
Panafrican Funktron Robot's picture

Also, even in just a "normal" or "high" inflation scenario, liquor appreciates in value over time (esp. high alcohol content liquor).  

Tue, 03/19/2013 - 21:05 | 3350564 MeelionDollerBogus
MeelionDollerBogus's picture

MEDICINE. And any packaging, containers, fridge, coolers, to keep it safe.

Heavy on the anti-biotics and pain killers (even if you don’t use ‘em in a total grid-down crisis, that and canned food you like less will be amazing for barter). Cigarettes & whiskey! Even if you don’t smoke or drink – barter again

Tue, 03/19/2013 - 12:43 | 3347784 Awakened Sheeple
Awakened Sheeple's picture

.

Tue, 03/19/2013 - 12:42 | 3347788 madcows
madcows's picture

It would seem that investors don't trust anyone anymore.

Tue, 03/19/2013 - 12:49 | 3347827 stormsailor
stormsailor's picture

DAMN IT WOULD BE GREAT TO SEE A TOTAL PANIC BULL-SQUEEZE.   but it will probably close green.

Tue, 03/19/2013 - 12:52 | 3347858 venturen
venturen's picture

Fire up the printing presses...get the helicopters...we need hyper inflation...DOW 50,000! 

Tue, 03/19/2013 - 13:01 | 3347927 steve from virginia
steve from virginia's picture

 

 

 

All that Japanese easing for nothing!

 

C'mon, kids! Where is that MONEY PRINTING?

 

:)

Tue, 03/19/2013 - 13:15 | 3348058 AynRandFan
AynRandFan's picture

This article is as good an example of the negative hyperbole too common on ZH. Average EUR/USD for the past 5 years is 1.35. Since the "crisis" began we dropped from an average 1.302 to a two-day average of 1.29. Ho hum.

The stock market indices not only have barely budged, but we were up momentarily yesterday at the height of the crisis in Cyprus.

Hey, I'm a believer that the central bank actions of the past few years will lead to disasters of one form or another, but this ain't one of 'em.

Tue, 03/19/2013 - 13:44 | 3348278 akak
akak's picture

"'Tis but a scratch!", eh?

Yes, and gangrenous amputations often start with just a scratch, too.

Tue, 03/19/2013 - 14:09 | 3348434 Panafrican Funk...
Panafrican Funktron Robot's picture

"at the height of the crisis in Cyprus."

I'm sorry, did you actually think the Cyprus thing was over?  

"Cypriots are also holding slogans in Spanish and Italian outside the Nicosia parliament, which read "today me, tomorrow you""

Who the hell knows when the ongoing European crisis will go from "background" to "foreground", but shit man, the end of the Euro is a foregone conclusion at this point.  The relevant parties are just licking their chops at this point.  In the currency war, the Euro is the casualty, period.


Tue, 03/19/2013 - 13:23 | 3348109 dumpster
dumpster's picture

Risk on risk off .. sounds like a bunch of litle league baseball guys repeating thier mantra of the big leagues .

new crisp uniform. tighten belt , atta boy, kick dirt, spit

 

 

Tue, 03/19/2013 - 14:17 | 3348486 akak
akak's picture

I'm glad I'm not the only one who finds this idiotic "Risk on/risk off" meme to be utterly inane and meaningless.  Talk about a false dichotomy!  It is ALL risk nowadays --- just choose your poison, guys.

Tue, 03/19/2013 - 13:33 | 3348198 gimli
gimli's picture

A headline from Marketwatch:

 

Dollar bulls hit record in Bank of America Merrill Lynch survey

now remove letter space:

 

Dollar bullshit record in Bank of America Merrill Lynch survey

.... just found it interesting

 

 

Tue, 03/19/2013 - 13:34 | 3348213 LawsofPhysics
LawsofPhysics's picture

Everyone does realize that this drop is despite the Fed's open market operations.  FYI, there is no POMO this thursday, frontrun accordingly.

Tue, 03/19/2013 - 13:40 | 3348261 stormsailor
stormsailor's picture

need to bust through that 1529 low from sunday night/monday morning.

 

that will make their balls quiver.

Tue, 03/19/2013 - 13:45 | 3348289 PeeramidIdeologies
PeeramidIdeologies's picture

This move is far from a crash, more like a planned take down. Observe the incident and timing involved. Also recognize the stage of progression of said incident. The tricky part is timing the "solution". Ill be watching to see a continued direction for today and possibly tomorrow. Would hate to miss the big rally to follow.

Tue, 03/19/2013 - 15:16 | 3348939 stormsailor
stormsailor's picture

gunning the /es green, as i speak

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