Mohave.net

Mohave.net
Discussing Mohave County Arizona Housing Market and other topics

Leading Chinese credit rating agency downgrades USA government bonds

November 10th, 2010

I’ve always said that reading newspapers outside the US is more informative than reading US papers. The Telegraph in the UK is one of the best. The comments pretty much say what a lot of the world is thinking. There is a lot of this being said in the US also, but those comments are dismissed by the progressive left. Anyone who says the same things the rest of the world says are considered right wing whacko racists who just hate Obama.

http://blogs.telegraph.co.uk/finance/ianmcowie/100008566/leading-chinese-credit-rating-agency-downgrades-usa-bonds/#disqus_thread

One of China’s leading credit rating agencies has downgraded United States of America government debt in response to what it sees as deliberate devaluation of the dollar by quantitative easing and other means.

If China, now the second biggest economy in the world, stops buying US government bonds this could have a very negative effect on the global recovery. The Dagong Global Credit Rating Company analysis is highly critical of American attempts to borrow their way out of debt. It criticises competitive currency devaluation and predicts a “long-term recession”.

Dagong Global Credit says: “In order to rescue the national crisis, the US government resorted to the extreme economic policy of depreciating the U.S. dollar at all costs and this fully exposes the deep-rooted problem in the development and the management model of national economy.

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Lake Havasu Mall

September 16th, 2010

I haven’t seen anything in the Kingman paper about this, but that’s not unusual. The big Lake Havasu Mall has been put in receivership because the lenders are not being paid. This is a step that the lenders hope will prevent them from losing as much money as a straight foreclosure. Do read the comments on the article.

http://www.havasunews.com/articles/2010/08/29/news/doc4c75f860cdbaa926788155.txt

Receiver appointed for Shops at Lake Havasu

By JACKIE LEATHERMAN
Today’s News-Herald
Published Wednesday, August 25, 2010 10:19 PM MST

Wolford Development Inc., the company that developed and owns The Shops at Lake Havasu, is no longer in control of the property.

Mohave County Superior Court Judge Charles Gurtler appointed a receiver — or a third-party to take control of the property — Tuesday for the 109-acre site off State Route 95.

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Pro-Growth, Valle Vista, Nimby’s and More

September 13th, 2009

I am getting really irritated at the continual name calling going on in our little town by the “pro-growth” contingent. I started to post on a topix forum that was merrily posting their “nimby, nimby,nimby” chant, but decided my own personal AOL troll stalker would have a field day with my opinion.

So I decided to post on this blog that I’ve pretty much ignored for that last year. Trying to have a conversation about anything is hopeless in this town. If you have an opinion that doesn’t fit in with the pro-growth opinion, all they know how to do is attack and call names. So without further ado….

The “pro-growth of any kind” advocates in Kingman would have more of a leg to stand on if all the industrial development they are so gung ho for was actually in the Kingman city limits instead of the rural areas they are telling people to move to if they don’t want rampant growth just for the sake of growth.

Maybe they could get together and build a biodiesel plant on Hualapai or maybe on the vacant 160 acres or on the vacant land by the new hospital or the vacant land by granite bluffs. Put a solar plant in the middle of Lazy-Y-U, lots of vacant acreage there. (I know it’s not in the city limits, but it’s close.)

Does everyone realize by now that buying anything in this county, and the Kingman/Golden Valley area in particular, is not safe if it backs up to or is close to vacant land? It doesn’t matter where it is. If not, you must have lived under a rock for the last few years. Unless of course you are a speculator and then you live for these random zoning changes. But buying a “home” is gambling at best.

Rancho Santa Fe has a pending freeway off ramp and commercial, one on each end. Vista Bella has a pending freeway off ramp and commercial. Houses that will back up to this are sitting on the market a long time and if they sell, they sell at a steep discount to houses further into the subdivision. Golden Valley has a pending mega subdivision with 2500 square foot lots shoehorned into the middle of their rural lifestyle. Clacks Canyon has a proposed freeway. And of course Valle Vista has the proposed biodiesel plant and two other rural communities have proposed solar plants.

I’m sure there are more examples but the point is that no one is safe, no matter what the current zoning or master plan says you are zoned for. Due diligence doesn’t work because zoning has become a moving target. Today Valle Vista residents are called “selfish nimby’s”, tomorrow it could be you. Just don’t expect any sympathy from the current “selfish nimby” groups.

The proposed prison that was denied (which by the way would have provided 10 times the permanent jobs all the current proposals would), was in Dolan Springs. The realtors and developers were against it right along with Dolan Springs. But only because they thought it would devalue their “investments”. They couldn’t care less about the jobs. No one chanted “nimby,nimby,nimby” every time they objected, but now that same group is doing that to the people that are objecting to the current proposals.

Try being honest here. Most of the people chanting pro-growth are either realtors, developers and/or speculators. They are for the thousands of TEMPORARY construction jobs, not the handful of permanent jobs that may or may not come to pass. They will benefit from this and of course so will some of the currently unemployed construction workers in this town. But it’s a temporary solution for those workers at best.

Since we don’t have enough local unemployed construction workers, the companies will no doubt bring in workers from out of the area, if not from out of the country. (They’ll probably do that any way, but we’ll ignore that for now.) The temporary construction workers will have to either stay in motels or rent houses or apartments. That will help the speculators who are stuck with empty houses (and the townhouses of the biggest proponent of growth) that they currently can’t sell or rent. When those rentals run short, they can build more and sell them to more investors to rent to the transient workers. Maybe some of those pesky voting seniors can sell their homes to the investors and get the heck out of Dodge. Workers who are working a temporary job are probably not going to buy houses.

Does this sound familiar to anyone? Isn’t that how we got where we are right now? Building hundreds of houses for new residents who forgot to come. Many of the ones who did buy never had any intention of moving here, just flipping and making money or if that failed walking away. We have 3 and 4 year old houses that have never even had renters, let alone been occupied by the buyer.

Yes people need jobs, and temporary jobs are better than nothing. But most people want to live in a town occupied by a larger percentage of permanent residents, not transient residents. When the projects are completed and all the temporary jobs end, we’ll be in worse shape than now. Not only will the transient residents leave and probably leave more empty rental houses than before, (because we will no doubt build more to sell to investors to rent to them) but we will have lost permanent residents. Then what? Another wave of foreclosures when the new “investors” walk away?

Of course those who spout “nimby” and anti-senior, anti-retiree rhetoric all around the internet, will probably be delighted. You will get what you wished for, less retirees, less seniors. You want to turn a town that people moved to, like it or not, because they wanted a small, rural, inexpensive, friendly town into a place just like they are trying to get away from.

But guess what, go in any store or restaurant, who do you see spending money? I’ll bet the majority are seniors, the group that you cannot seem to control your hatred of, calling them selfish old nimby’s every chance you get. If every retiree in Kingman left today, how many businesses do you think would close? How many new businesses do you think would open? Even with the retirees we have (many who’s income has plunged due to the stock market and horrid interest rates), the local population cannot support the existing businesses. Many businesses are obviously holding on by a thread. We don’t need new stores and restaurants right now, we need to fight like heck to keep the ones we have.

Your temporary jobs may also help here, temporarily. The new shopping centers you want will only come if the demographics work. And retirees with expendable income rank higher than transient workers who are only temporary residents. But you don’t need to believe me, drive the retirees out or convince them not to move in and see what happens to the businesses. Look at other towns the size of Kingman, many would be thrilled to death to get even a portion of the businesses that Kingman has.

But instead of appreciating and supporting the businesses we do have, the pro-rampant growth people complain about what we already have and wish for bigger and better businesses to replace them. Instead of accepting that Kingman has been steadily, slowly growing for over a hundred years, they want to leap into living in a megatropolis, common sense be damned.

I might ask them, why don’t they move? Wouldn’t that be easier and less stressful on everyone? They want the people they feel are standing in the way of their wants to move so they can have their big city filled with big box stores, major restaurants, expensive houses filled with hundreds of thousands of people and of course the accompanying big city crime and traffic. Even if the pro-rampant growth people got rid of all the slow-growth people, changing Kingman to Vegas isn’t happening in any of our lifetimes. Wouldn’t it be easier to move to a place that has all that great stuff you feel is mandatory for the good life and leave the nimby’s happily living in their small town, or on their little piece of the desert, hauling water and watching the stars.

You might keep in mind…locally owned businesses will stay open far longer when times are bad than the big boys. National chains may open, but they will close underperforming stores without a second thought. Exactly like Office Depot and Albertson’s did. We have several other recently opened national chains that aren’t exactly busy. We’re only a line on their corporate income statement, they have no roots in the community, they could pull the plug whenever they want if that line has a minus in front instead of a plus.

I remember a local and the newbie’s who thought his business should be driven off of Hualapai. He said he was there first, was zoned for his business and if they didn’t like it they shouldn’t have built next to him. They bought knowing the zoning on adjacent acreage. I agree with him 100%, why shouldn’t others have the same rights. The residents of Valle Vista, Red Lake, etc, bought their property when the surrounding properties were zoned the same as their property.

Do you think any one of them would have bought homes located next to property zoned heavy industrial? Do you think selling their property to an owner occupied buyer now is going to be easy? Would you retire to a house across from a biodiesel plant? Would you retire to a house where the person who owned your water company, that apparently already had problems, was probably going to put in an algae field? Would you retire to a house where all the property between your neighborhood and Rt66 was owned by the same person who owned your water company and the biodiesel plant and needed algae fields somewhere? I wouldn’t, I doubt many people would. I’m sure speculator buying will increase but what does that do the the VV community and it’s future.

Does anyone remember the Rt66 subdivision that was approved between Valle Vista and Long Mountain? With expensive houses and of course the necessary golf course? A local realtor said they were breaking ground last year, or was it the year before? Of course it will never be built, in fact the owners have joined a growing group of speculators that are in foreclosure. But do you think the bank has a chance in h*ll of selling the approved subdivision to another developer? Even if someone thought a new subdivision with thousands of potential houses was a good investment, I doubt the location would pass their due diligence test for location,location,location. Kingman and Mohave County have proved again and again that they believe that anyone should be able to rezone anything, anywhere. There is not a lot of demand for expensive subdivisions, and none for subdivisions next to heavy industrial.

The current rezones are only the newest in 4 years worth of pro-growth approvals. Will they even ever be built, or will the properties just be flipped as soon as the zoning is complete? Why don’t the pro-rampant growth people mention all the projects they insisted were a sign that Kingman had been discovered by the world and we were just a few years from a population increase of hundreds of thousands if not millions.

Take a trip down memory lane, look back at all the approvals….all the subdivisions with golf courses, all the subdivisions with tiny identical houses, all the subdivisions with super expensive houses, the subdivision with million dollar homes on top of the hill above Western, the subdivision at the end of the airport runway, the condos across from the college, the subdivisions off of Hualapai, Jagerson, Bank, Grace Neal, Stockton Hill, Rt66, Southern, Karen, Gordon, Peacock Mountain, Red Lake, White Hills, Golden Valley, even one south of the tracks in old town. The list goes on and on. The list of started subdivisions is very small, the list of started ones successfully selling even a few houses even smaller. There are hundreds of thousands total approved houses in the Kingman/Golden Valley area. Heck one builder alone was approved for about 130,000. Even if we forget the builder with the 130,000 pie in the sky dreams, without the pocketbook to match, that still leaves one heck of a lot of unneeded houses.

Then we have the rv “resorts”, the convention center, the outlet mall, etc., etc. Has anyone seen any of these mega commercial projects even started? Have you noticed all the “build it and they will come” commercial buildings around town, still hoping for tenants? Some were built as long ago as 2005 and have never had full occupancy. Do you realize most of the projects that were approved were then put back on the market for sale? Do you know how many have been foreclosed on when no one wanted to buy them? Do you know how many developers and/or speculators have either been foreclosed on and/or are in bankruptcy because they bought into the great real estate mania of the 2000′s?

Valle Vista may become Kingman’s Waterloo. The internal fighting, the name calling, the anti-retiree rhetoric, the multiple rezoning and building approvals despite residents speaking out against them, has not gotten a lot of press. Kingman is not out there in the main stream media, although it does get mentioned sometimes as a pit stop on the way to Vegas. We recently watched a reality show on NBC, called the Rt66-Great American Road Show. When they got to Arizona, they of course went to the Grand Canyon. Then they went to Seligman, took a side trip to Las Vegas and ended up in Oatman. Nothing else in Mohave County was even mentioned or shown on the show. So up to now, not many people know who we are and our antics don’t draw any attention.

Now, google “biodiesel Valle Vista”. How about that, we’re famous. There are even articles in the Guardian, a UK paper. In fact, I discovered this because I read some of the foreign papers online and came across the Valle Vista piece. So then I googled to see what else was out there.

Mohave County might find out that you can trample on a few people here and there in the name of “growth”, but when you step on the toes of a thousand or more, it’s not quite as easy to sweep those people under the carpet. They are angry, they are vocal and they are going to fight for their property rights and way of life anyway they can. And just because they’ve lost the current battle, doesn’t mean they are giving up on the war. Even if the plant goes the way of all the other big commercial ventures, the harm has been done, the trust has been lost.

Even Las Vegas has figured out that an economy based on construction doesn’t work. An economy dependent on growth doesn’t work. A city that expected the boom to last forever, is losing residents and expects the loss to increase. http://www.lasvegassun.com/news/2009/sep/06/day-honoring-workers-nears-few-here-have-much-cele/ The majority of the job losses in Vegas, as here, are construction workers. The massive over building of the last decade, not only here but country wide, will no doubt cause the construction industry to continue to lose jobs for years to come. Until all the excess housing and commercial real estate is absorbed, there is little need to build more. We need to train people for other occupations and promote other industries to diversify our economy, not just here but in the whole United States.

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China’s Shot Across our Bow

June 25th, 2009

This is all over the internet this morning. This is very scary stuff in my thinking, but what do I know. This is not from the Chinese government but the head of the economic research division of the Communist party.

It’s the second time the Chinese have insinuated they are not going to buy more of our debt. Our government’s fiscal policies are making them very nervous. If they stop buying our treasuries, it’s game over.

Our debt is increasing daily and selling the treasuries is the way the government pays for all the spending they are doing. The Fed is already buying a portion of the treasuries because there are not enough buyers apparently. Not sure how that works. It’s sort of like me writing myself a check.

China is our largest creditor, they are the “largest single holder of US Treasuries, with $763.5 billion at the end of April, according to US Treasury data.”

In looking around at the posting of this article, I noticed that the US print versions leave out the comments the economist gives for his thinking. Mainly the quote listed below the link.

LINK: Chinese Economist Urges Beijing to Buy More Gold

“Should we buy gold or US Treasuries?” Li asked. “The US is printing dollars on a massive scale, and in view of that trend, according to the laws of economics, there is no doubt that the dollar will fall. So gold should be a better choice.”

There is no suggestion that Li, even though he is a senior researcher, was enunciating an agreed party line.

However, a debate is swirling in China about how the country can reduce its exposure to the dollar and to US assets in case America’s ultra-loose fiscal and monetary policy rekindles inflation and erodes the value of the dollar and US Treasuries.

This is a MarketWatch version of the article with hundreds of comments:

LINK: MarketWatch

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Foreclosures Up, Home Sales Up, Prices Down

June 25th, 2009

From Pinal County:

Home sales up, but prices down
More foreclosures expected to flood Pinal market

LINK: Home sales up, but prices down

Recent reports show that in Casa Grande and western Pinal County, as in much of the state and nation, home sales are rising, but prices continue to fall. The number of foreclosed properties on the market now, and expected on the market soon, seems to be the driving force.

“We’ve been told [by Fannie Mae and Freddie Mac] that there are thousands and thousands of foreclosures in the pipeline,” said Darrah Dremler, an agent with Coldwell Banker Excel Realty who specializes in foreclosure sales. “Banks are starting to price things a lot lower to clean out their inventory before this big rush hits.”

From the Las Vegas Review Journal:

Home sales up, prices down
Inventory on the market reflects drop of 9.3 percent from May 2008

LINK: Home sales up, prices down

Counting 737 condo and townhouse units sold in May, Las Vegas had nearly 4,000 total sales, one of the best months on record, said Sue Naumann, president of the Realtors association.

“So there’s plenty of activity in our local housing market,” she said. “We’re down in inventory so we’re starting to move things out of the market and I’m sure a great deal of it is REOs (real estate-owned).”

Any further price deterioration will be caused by foreclosure properties, which account for about 80 percent of Las Vegas home sales, Naumann said.

“We had a bank moratorium that expired June 1, but I still don’t think they’re going to flood the market,” she said. “It would be devastating if they did.”

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Foreclosures

June 15th, 2009

This article addresses the shadow inventory supposedly being held back by lenders. I’ve seen several articles on this subject but this one has quotes specific to Arizona.

LINK: Yahoo – Arizona Foreclosures

Arizona is now in the news and not in a good way. The latest figures from RealtyTrac.com show that during the first quarter Arizona had the second highest rate of foreclosure actions in the nation, trailing only Nevada. One out of every 54 Arizona homeowners received a foreclosure notice during the first three months of the year………

Gloria Handley, a real estate agent in Chandler with RE/MAX Achievers, says that across the state there have been roughly 20,000 home sales so far this year. Of that number, she estimates that 75 percent were lender owned or short sales…….

What the numbers from Arizona and elsewhere generally don’t say is that while bank-owned properties make up a growing percentage of the homes available for sale, banks are actually keeping large numbers of properties off the market.

A study by RealtyTrac compared homes held by banks with homes actually listed on local MLS systems. The result? RealtyTrac’s senior vice president Rick Sharga estimates that only 30 percent of bank-owned properties are listed and that 600,000 to 700,000 foreclosed homes nationwide are being held off the market by lenders………

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Deja Vu

June 14th, 2009

I’ve been having a lot of deja vu moments lately between Kingman realtor comments and Las Vegas and Phoenix realtor comments on forums. Hard to believe but this article points that out. The interesting thing about this article is that it appeared in the NY Times and was reprinted in the Seattle Times. Nothing in the Phoenix paper that I can see.

Here is the link with some snippets out of the article:

LINK: Phoenix Housing Bust – Bidding Wars

The New York Times
By DAVID STREITFELD
Published: May 23, 2009

PHOENIX — Every weekday morning, Lou Jarvis drives the sun-baked suburban streets looking for investment gold: a family that will lose its house in a foreclosure auction within a few hours……

Real estate got just about everyone into trouble in Phoenix, and the thinking seems to be that real estate is going to get everyone out.

The low end of the real-estate market here — and in some equally hard-hit places like inland California and coastal Florida — is becoming as wild as anything during the boom……

Absentee buyers, who can be either investors or individuals purchasing a vacation property, bought nearly four of every 10 homes sold in the Phoenix metropolitan area in April, according to the research firm MDA DataQuick. That is up 50 percent since late 2007, and is nearly the same ratio as at the 2005 peak.

Once again, just about everybody seems to be buying as many houses as they can, positive it will make them rich — or at least allow them to recoup some of their losses……

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Long Time, No See

June 10th, 2009

I’ve avoided posting for nearly a year because of nasty emails from Realtors in the area and because of some family issues. I have decided to ignore the psycho attackers and start posting some links again. There is so much going on in the country these days and sometimes ferreting out opposing viewpoints is difficult at best.

I knew the bubble prices wouldn’t last and would come crashing down, but even I didn’t expect the chaos that has come with the crashing home prices.  Having been through unsustainable housing bubbles before, I didn’t realize how the bubble money was holding up the rest of the economy this time.

No-doc loans.. speculators buying 5,10,20 houses with no money down.. housing atms used for toys, expensive cars, vacations, etc.. artificially low interest rates.. people being allowed to purchase homes at ten or more times their annual income.   Then the lenders turning around and selling those bogus loans as AAA to investors around the world and insurance companies insuring those loans.  Most of those things did not exist in previous bubbles.

In previous housing bubbles, prices increased to lofty heights and then crashed back to their fundamental values, without bringing down the entire worlds economy.  People kept saying “this time is different” but I don’t think they meant different in this way.  I don’t feel sorry for anyone who expected the prices to continue to skyrocket and never fall.  All anyone had to do was question the common sense of that happening.  You didn’t have to be a rocket scientist to realize that housing prices were thundering their way to a cliff.

I’m disgusted with the wealth redistribution that seems to be the current administrations idea of how to improve the economy. The new ideas of today are ridiculous in my opinion.  Now responsible people are going to have to pay for the irresponsible once again.  It seems the government will do anything it can to keep the party going. Destroying the dollar, keeping people in houses they could never afford by any means possible, letting people live in houses payment free for months and even years by preventing the lender from foreclosing, forcing lenders to write down mortgage balances so the irresponsible can afford the houses they had no business buying.

Nothing is off the table now it seems.  We must get people back to spending money they don’t have on things they don’t need.  Good plan…spend your way out of debt.

More people should have paid attention to this snl skit from years ago….

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New York Times Article

August 13th, 2008

A few days ago I read a NY Times article regarding Kingman.  I didn’t see the original article until I read comments on the article on a blog.  The comments were not complimentary.  Some of the less negative comments:

“The times is leading people to think that Kingman is a safe place to buy a house? I posted some info in the forum about Mohave County; they have about 20 properties a day going to foreclosure auction. When I drove through in June, the whole place looked like it was on sale. Read the article; 80k new houses?”

“Kingman is in the north west corner of AZ. Lots of CA and NV speculators ran up prices and the developers went nuts. There are so many bulldozed subdivision sites the country looks like an Inca desert drawing.”

I then read the article and researched the writer.  The writer is not a NY Times reporter but a free lance writer from Las Vegas.  I assumed the article was written as a pr piece to draw attention to the dwindling investment market in Mohave.  Being from LV, the writer probably has ties to someone with investments in the area.  The majority of the land purchases during the boom were by Las Vegans.

This is a feed of the original article (the NYT article requires registration, so this is from a NC paper).

http://www.starnewsonline.com/article/20080810/ZNYT02/808100
315&title=Developers_Poised_in_Arizona_to_Welcome_the_Sp
illover_of_Las_Vegas__x2019_s_Boom

Today the Miner has jumped on this with their own article. Now, based on a PR piece written by an LV writer (not a NY times reporter as the Miner calls him), we are going to gear up to the “inevitable” invasion.  From the article:

“Salem said while he believes growth is inevitable for Kingman, it is still important for that growth to be planned out accordingly.”People are going to come no matter what,” he said. “We need to be thinking into the future with many things: school, infrastructure, police, fire – all of the city services used to maintain a growth pattern like what we’re used to.”

Salem anticipated that once growth does get underway, especially following he completion of the four-lane Hoover Dam bridge in 2010, he expected it to be greater than the 5 to 6 percent rate it has been, but not so great as the boom experienced earlier this decade.”

 
http://www.kingmandailyminer.com/main.asp?SectionID=1&subsectionID=1&articleID=16958

I see dollar signs and lots of debt in the future for our little town.  The powers that be are counting on an illusion being trumpeted by speculators and developers who gambled and are losing their shirts, based on the current foreclosures.

No one has ever answered my questions regarding this “invasion” of Las Vegans.

..Why will the “bridge” cause hundreds of thousands of people to move here?
..Why will the “bridge” create more traffic through Kingman? Where is this additional traffic going to come from and why?
..Why would Las Vegans travel over 200 miles a day to live in Kingman when there are much closer alternatives in their own state if they choose to not live in Vegas proper?
..Prices have fallen so much in Vegas that larger houses are available for less money than in Kingman, why would they spend more to “commute” to a different state?
..When Las Vegans joke about the master planned community north of them and how they wouldn’t drive the 50 miles to live there, why would they drive 100 miles to live here? That community with a planned 150K homes cannot even get one home built. There is no demand.

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Bank Failure

July 26th, 2008

Feds close First National Bank of Arizona

Stung by problem loans and the real estate slump, Arizona’s largest locally-based bank was closed by regulators Friday.

Scottsdale-based First National Bank becomes the sixth bank failure of 2008 and the first involving an Arizona institution since 2002.

http://www.azcentral.com/12news/news/articles/2008/07/26/20080726biz-FNBA-ON-CP.html

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