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Thursday, May 19, 2011

HBO, Daily Beast, Sorkin and the Financial Crisis: Too Big to Explain

By Staff Report
130

Timothy Geithner

Too Big Too Fail ... At a New York screening of the new HBO adaptation of Andrew Ross Sorkin's Too Big to Fail, Treasury Secretary Timothy Geithner said that not only is our financial system not too large to go bust—but we're headed for another crisis. The Wall Street meltdown of late 2008 was, in real life, a harrowing event, triggering a terrible recession from which we're still recovering. In the HBO movie Too Big to Fail, it's also a surprisingly gripping melodrama – a clash of greedheads and egomaniacs desperate to escape the consequences of their own bad behavior. – Daily Beast

Dominant Social Theme: This is a great book! It brings you inside the financial crisis and makes it come alive! You really get to feel the crisis! You are there! You can see it happening! And after reading this book you will not have a clue as to why it occurred! So watch the movie! You still won't know! But you will feel like you were there! You will feel like an insider! You will still be ignorant as hell! But you will feel connected! Wow!

Free-Market Analysis: HBO has adapted Andrew Ross Sorkin's book, Too Big to Fail and Timothy Geithner appeared at the initial screening and predicted the system will fall apart yet again. (Big news! The current system sucks!) This seems to come as a surprise to the Daily Beast, which profiled the event (see excerpt above). We were struck by this perfect storm of media activity. Surely, we decided, given the tremendous agglomeration of resources and reporting, the mainstream media must have finally "gotten it right."

In fact, what strikes us most clearly about the Daily Beast article is the portrayal of a kind of elite dominant social theme: There simply is no way to understand financial catastrophes; they are as inexplicable as they are ruinous; as mysterious as they are vast. Thus the mainstream media is better off trying to catalogue the results rather than explaining the underlying difficulties.

The Daily Beast article reports on a media nexus worth billions: HBO, the New York Times, the US Government Treasury Secretary Timothy Geithner all attended the HBO screening. And yet ... what has occurred as a result of all this intellectual firepower? Nada. Nothing. Read the book, watch the movie, listen to the speech and read the article and we guarantee you this: You still will know not one wit more about the root cause of the current financial crisis than you do now.

It's funny. And sad. Neither the book, nor the Daily Beast, nor Timmy Geithner, nor apparently the HBO movie, can shed any light on the "crisis" no matter how hard they try. Geithner tempts us but apparently does not deliver – though his remarks certainly sound scary enough. Perhaps, the article or the book are to blame? Click over to Amazon.com and the reviews of Too Big to Fail are irritated about the same thing. Five hundred pages and no answers. Woops.

Unfortunately, we expect no more. Sorkin, a New York Times writer, is a practitioner of the "too-close-to-explain" school of journalism. That is, in 500-plus pages, he apparently gets inside of every head of every major player in Washington DC and Wall Street without ever providing the "why."

Gonzo journalism can be likened to eating cellophane. It is crunchy and full of crinkly sparkles, but in the end it proves innutritious. With so much brainpower concentrated on a single issue, you surely should walk away enlightened about how the world's current financial system came within a few hours of a global meltdown. Nope.

"Media genius" Tina Brown who has made a habit of failing upward everywhere she goes, has produced yet another article of exquisite vapidity. Like the book itself, we learn the details without ever comprehending the issues. It takes enormous talent in our view to concentrate so many resources on an issue of such singular import without revealing even a single drip of significant information.

But why are we surprised? (And we are, perennially.) This is actually what Tina Brown, Sorkin, et al. are paid to do. They are professional obfuscators. Their worth is calculated by how much they can conceal, and how well. Here's some more from the article:

At various moments of high tension, Treasury Secretary Hank Paulson (played by a bedraggled, unshaven William Hurt) flees an important meeting to stress-vomit in his private bathroom, and New York Federal Reserve President Timothy Geithner (a perfectly turned-out Billy Crudup) continually curses into his cell phone.

It's an alarming entertainment (premiering May 23 at 9 p.m.), and an even more disturbing memory. So having the real Geithner predict the coming of another big crisis was the last thing the well-heeled screening crowd at the Time Warner Center wanted to hear Tuesday night. "It will come again. There will be another storm," warned Geithner, who in early 2009 succeeded Paulson as treasury secretary. "But it's not going to come for a while."

Under mostly gentle questioning from Pulitzer Prize-winning financial writer Liaquat Ahamed and New York Times business columnist Andrew Ross Sorkin, author of the book on which the film is based, Geithner said "I'm certain we will" experience another catastrophe – he just couldn't say when or what kind. "You will not know," he answered when Sorkin tried to pin him down. "It's not going to be possible for people to capture risk with perfect foresight and knowledge."

The 49-year-old Geithner – looking sharp and fresh in his precisely creased suit, starched white shirt, and brilliantly shined Oxfords – favored his audience with a grim history of the near-collapse of Bear Stearns and AIG, and the downfall of Lehman Brothers, events that pushed the markets into a panicked death spiral. "Things were falling apart," Geithner told an audience that included Time Warner CEO Jeffrey Bewkes and former Lehman Brothers chief executive Pete Peterson.

"We had no playbook and no tools... Life's about choices. We had no good choices... We allowed this huge financial system to emerge without any meaningful constraints... The size of the shock was larger than what precipitated the Great Depression ...

So there you have it, folks. Paulson vomits; Ahamed questions and Geithner predicts (another calamity). So much drama, so little insight. This is perfect US mainstream reporting. Ignorance perfected as an art form, though just to be fair we should mention Sorkin does come to a couple of conclusions at the end of his heavyweight tome. The main one apparently is he thinks there should be more regulation!

Gee, how's that for originality and where does it end? The 20th century was virtually a factory of regulation in the West and finished with a financial crash that is rivaling the Great Depression. After 500 pages, Sorkin can only muster the insight that more of the same will provide a better outcome. Yes, it's true ... Professional communicators and Western bureaucracies in aggregate are clinically insane.

Tina Brown has been known to lament the impact of the Internet and electronic reporting on 20th century media. From her point of view, the menu of information choices are simply too vast and people cannot be bothered to focus on any one media property. Too bad. In fact, this article, this gathering, these people, all provide us with sterling reasons why Ms. Brown feels the way she does, and why she is, in fact, wrong. It is not the wide range of resources currently available that makes the difference; it is the paucity of information she is willing to provide.

We have now come to the end of our article. But before we go, we are going to perform a chemistry experiment. We shall mix together inexpensive electrons and serve them up on your computer screen to provide a brief, shining moment of clarity. We will do so just to show how inexpensively and quickly it can be done. Even if you disagree, at least we will have provided you with genuine information that you can react to ...

The world's financial crisis was the result of the West's central banking economy, which has been sponsored and expanded by a group of elite banking families mostly centered in the City of London, a private enclave for the impossibly wealthy. Central banks, perhaps owned and operated by these families (and one in particular), fix the price of money via interest rates and money-volume, and price-fixing inevitably creates economic distortions.

Economies, as a result, inflate wildly and then crash. Once this happens a few times over decades, the economies in question are so distorted that a final crash is inevitable. This is what happened in 2007-2008. The West's financial structure, swamped by trillions of dollars printed from nothing, became so distorted that no one could tell a real investment or profit-making company from a phony one. The world's economy as a result froze up. The dollar reserve system crashed and likely shall not recover.

Hopefully, the world will eventually return to some sort of commodity standard. If the fascists do not triumph, the end-result of the current pain shall be money competition. Let all kinds of money compete and the best shall emerge as the most useful currency. And what about Geithner? The Treasury Secretary, without explaining what actually happened, is indicating that the current system of money-price fixing is still in effect and sooner or later will cause another crash. The powers-that-be, rather than repairing the current system by allowing the free-market to operate are desperately puffing it up with yet more money-from-nothing. How predictable. How sad.

See how easy that is? We didn't need 500 pages or two years and a million-dollar advance. We didn't need an HBO movie or even an adulatory article from the Daily Beast. We didn't need the admittedly impressive presence of Timothy Geithner, the attendance of the Wall Street crowd or other members of the mainstream press. We just needed a few electrons and readers who prefer English to gibberish.

Here are some more points to which the Daily Beast article does not allude: The current system is a farce and fraud; it cannot provide jobs; cannot provide careers; cannot provide much of anything except paper profits for bankers. This is the system that Hank Paulson bailed out (no wonder he vomited); this is the system that Timmy Geithner is dedicated to upholding. This is why the pain and terror of the past few years are bound to be repeated.

Conclusion: The people that brought you the current dysfunctional economic system are still in charge. You can see them in operation later in May on HBO. You can read the book, too. You will be amazed! Stimulated! Entertained! But you won't know anymore afterward than before. Geithner, Paulson, Ms. Brown and the banking families to whom they report, wouldn't have it any other way.


Editor's Note: Here is a link to a video that was made several years ago by the Mises Institute that should be playing on HBO instead of the dribble discussed above: Money, Banking and the Federal Reserve.




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  Posted by bionic mosquito on 05/23/11 02:14 PM

I replied to your previous post quite specifically. You avoid dealing with much of my post. I see nothing terribly specific in this comment of yours, with one exception (even there, I feel I am stretching the definition of the term "specific"). Is this something else you learned from your instructor?

You avoid the subject of "passive" or "proxy" when it comes to aggression. Why is that? You use oil, perhaps?

You avoid the topic of the state reflecting the people in almost all regions of the world, not just in the US. Why is that? Because, to varying degrees, every state uses force on its subjects and on others?

Now to this new post of yours:

I mention homeschooling. You reply "There are other ways to accomplish this like apprenticeship."

This demonstrates a complete ignorance of the purpose of homeschooling. Try better next time.

I mention right to bear arms. You reply "Possession or bearing physical weapons and their associated rights mean nothing if there is no will and responsibility to use them *as appropriate*." Yes, obviously. Do you intend to define for others what "appropriate" means in all circumstances?

I mention religion. You reply: "Freedom of religion...as long as you take the responsibility of the consequences your particular belief system produces." Are you suggesting that one person is responsible for another's actions solely because they nominally pray to the same god?

I say entrepreneurship. You reply: "...that exists everywhere." Then you nullify your entire response with your closing sentence: "Economic freedom also implies NO racketeering through government, which is too often the case in many places."

Now to your comment of (almost) substance: "Either you flee or fight." Even here, you hold no consistency: "Flee for the moment, but be prepared to fight by whatever means necessary." Is it flee OR fight, or is it flee AND fight"?

Well, let's examine what does "flee" (apparently your chosen path) mean, anyway. Do you run FROM something, or run TO something? Of course, I tried to offer some points to this in my previous post (as to some "pros" of the US), which you addressed only in your bumbling manner as I outline above (for example, is it really worthwhile to go half way around the world only to ensure your children are indoctrinated by someone else's vision of education?), so I will not repeat these here.

But, what if the coming turmoil is as bad as some believe it will be. Will being a foreigner in another land really provide safety? Is this what you mean by flee AND fight? That wherever you are, a fight's a'comin'? Well then, what's the point?

And is it really true that the only alternative to fleeing is to fight in the manner you imply? An American civil war, presumably citizens taking up arms against the state? This isn't fighting, it is suicide.

I said before, your chosen option of emigrating and (presumably) taking another citizenship is a valid option. It is not the only option, nor is it the only alternative to fighting - at least fighting as you define.

"One thing my writing teacher told me was to get to the point without delay."

You have not served your teacher very well. The point you made on your first post was that you came across as a bigot. Instead of clarifying your comments when challenged, you persisted in your bigotry. And when you finally presented a reasonable statement and were challenged on it, you respond with fluff and ignore most of what I said.

The purpose of writing is to convey some thought. What thought you have conveyed, I still am not sure.

  Posted by cat writer on 05/23/11 12:20 PM

Ont thing my writing teacher told me was to get to the point without delay. Then discuss further as necessary. That is why I took this route in this thread.

I intended an attempt to awaken people. The person who comes to my mind is Bobby Knight, the college basketball coach. I am very concerned and worried for what is bound to happen if things continue in this direction.

The 'pros' in the USA--It takes the people to take advantage of them. Home schooling is a matter of will and taking responsibility. There are other ways to accomplish this like apprenticeship.

Possession or bearing physical weapons and their associated rights mean nothing if there is no will and responsibility to use them *as appropriate*.

Freedom of religion...as long as you take the responsibility of the consequences your particular belief system produces.

Possibility of entrepreneurship...that exists everywhere. I would be interested in economic freedom instead, that all entrepreneurs are subject to the same rules and that going into business is not just available to everyone, but that everyone, even a worker on a basic wage, is regarded as a businessman. (This destroys one of the pillars of income tax whereby employees cannot deduct their expenses yet, in America, are afforded little 'protection' from losing their jobs.) Economic freedom also implies NO racketeering through government, which is too often the case in many places.

On a second reading, I will clarify further: Either you flee or fight. It is a decision one has to make in accordance with his abilities. Flee for the moment, but be prepared to fight by whatever means necessary. I was trying to motivate and raise emotions, and clearly several on this forum directed their anger in the wrong direction.


Another solution is a good old-fashioned shunning. Those criminals can be isolated by people not willing to interact with them anymore. Imagine Obama playing to an empty house.

BTW, 150 years ago, most of the military action did not affect most of the people who lived in the North. Burying a loved one is traumatic enough, but being in harm's way oneself is another. Acquaintances older than me told me how being bombed changed their outlook on life quite radically.

A real American civil war would straighten out the minds of many. Regrettably, that "karmic" payback is what may be required.

  Posted by bionic mosquito on 05/22/11 11:35 PM

Had this been your first post instead of your last, I will guess you would have had a much different (and more positive) reaction, at least from me...

"I find the responses here interesting. Not one seems to be directed towards the solutions I propose."

The only solution that I recall you proposed was to emigrate and renounce citizenship. I replied that it was one valid option. That seems pretty direct to me.

"Does what you want for yourself require aggression - even by proxy or by passive means or fraud - against the peace of another person? If so, find another way or forget about it."

I agree with this. However, depending on your level of puritanism regarding the word "passive" or "proxy", I will grant there is no where on earth where you can live in such a manner.

"Forcing others to use one form of money over others, even gold, is wrong."

No argument from me.

"The government we have reflects the state of the people."

I have said something similar many times. For the continuing cognitive dissonance, covetousness, and support for the military, see here:

Click to view link

"The government we have reflects the state of the people."

But this can be said of almost every people in every state. I can make a list of pros and cons for each. The one place the US trumps (in the bad way) the others is regarding the global reach of the military (But, for example, in its own way, is France any better? Ask the people in parts of northern Africa).

But this is certainly by design of those over the politicians (the elite, if you will). Perhaps they chose the US to serve this role because the people in the US are more distanced from the trauma of war. In the US, this trauma dates to 1865. In Europe and Asia, 1945. The memory of the people likely is different.

And why choose the US for the global reserve currency? Again, the US is more distant from hyper-inflation than much of the rest of the world. The people are not sensitive to it, as they are in Europe and elsewhere. Perhaps this makes for an environment easier for the elite to manipulate the currency.

Now put the military and currency together. Is it coincidence that the global reserve currency also supports the strongest military state? It MUST be so; and for both the military and the currency the US was the most logical location for the elite to land.

Back to your "passive" means of aggression: As virtually every country buys oil with dollars, and it is dollars that support the US military, I would suggest every human in the industrialized world supports the US military, passively, as you say. Welcome home, puritan (if you use oil, of course).

Of course, there is no doubt that if politicians in the US wanted to change this situation, they could. If the people wanted to change the politicians, they could. Again, this is true of politicians and people everywhere.

Back to the pros and cons of each - we discuss endlessly the "cons" of the US. You obviously know them well. What of the pros?

Home schooling
Right to bear arms
Freedom of religion
Possibility of entrepreneurship

To a greater or lessor (and shifting) degree, the US offers an environment that excels in each of these areas relative to other parts of the world.

"She told my wife that America is due for a civil war."

This is a different subject. This relates to where it might be safest to camp out during the coming difficulties. Again, there are pros and cons to every choice. It is quite dependent on ones view of possibilities and ones personal circumstances.

I don't say this to offer any excuses, either for me or for people who live in the US (where I may or may not live now or may have lived in the past).

But re-read this post, and tell me where I am far off.

  Posted by Zenbillionaire on 05/22/11 07:35 PM

@DB

"The people that brought you the current dysfunctional economic system are still in charge."

Think of it as a form of protest. Sign up to receive as much money as possible for doing absolutely nothing for the Federal Government. Eventually they'll run out of ink. A bloodless coup?

Click to view link

  Posted by cat writer on 05/22/11 12:50 PM

I find the responses here interesting. Not one seems to be directed towards the solutions I propose.

I want to clarify further: Human beings are responsible, that is, they are able to respond and to choose (within limitations). What I aimed to do here is to raise awareness of our responsibility in this mess.

Be very well assured that I also bear responsibility. I lived in the United States for over half a century and was not that clear about the issues for a great part of that. I also did not act as I should have and made very poor choices. I spent much time intellectualizing instead of acting. I realize that I should have made a more concerted effort to emigrate thirty years ago. I am paying a severe price now.


These issues we need to address are not the superficialities of current events, but what these current events mean and reveal about us. If you get to identify that meaning and also others' motives, then you can find solutions, and perhaps have the guts (that I did not have most of the time) to implement those solutions, as ugly and distasteful they may and now will be.

It requires working on ourselves as individuals and learning awareness and self-discipline. There is a great article on Strike the Root by Non-Entity: tp://Click to view link, Does what you want for yourself require aggression - even by proxy or by passive means or fraud - against the peace of another person? If so, find another way or forget about it.

That extends to money. Forcing others to use one form of money over others, even gold, is wrong. You may privately require payment in gold but through coercive by government, demanding a gold or any other standard is out of bounds.

The government we have reflects the state of the people. I had to hear it again today: a woman who moved here with her husband for his job has, after a month, now wants very much to become a citizen of this country, divorcing herself from America. Her decision has nothing much to do with money but the lack of decency and respect in the United States compared with her new home. She told my wife that America is due for a civil war.

I was nowhere near that gathering; my wife told me the story when she came home last night.

It is not your job to bawl about my writings. If you care that much about your dear America, then you need to understand that USA begins with "U". You need to be like Popeye the Sailor, who said "That is all I can stand and I can't stands no more", ate his spinach, and went to work.

I really would like to see some action plans instead of complaints.

  Posted by bionic mosquito on 05/22/11 12:23 AM

"Tis a long and windy road to truth!"

Windy - either a short "i" or a long "i" could be applicable at times!!!

:-))

  Posted by Wayne on 05/21/11 06:48 PM

"I sometime find conversations continue long after I lost track of an article, to my detriment as I might have benefited from (or added benefit to) the dialogue."

Tis a long and windy road to truth!

  Posted by bionic mosquito on 05/21/11 05:45 PM

Fair enough. Thanks.

  Posted by Wayne on 05/21/11 05:14 PM

Oh No!

You can't be suggesting that the dog has to hunt to be useful?

The proof is in the pudding?

What would happen to mankind's favorite activity, Drama?

There are times when it appears that the last thing wanted is to actually solve the problem.

Logic may be too simple for many!

  Posted by Wayne on 05/21/11 04:24 PM

Seems reasonable to me!

If I caused any confusion, I was wrong.

  Posted by bionic mosquito on 05/21/11 12:17 PM

"The Bug has always provided value and we would miss his presence."

Thank you, um, I think (Am I going somewhere? Do you know something that I don't?)

  Posted by bionic mosquito on 05/21/11 12:14 PM

"Check out the 'most read' link above, see the second in the list on IMF austerity. You'll see that the discussion evolved far afield, but apparently people were reading it right up until the end. Where else can a discussion like that take place?"

John, I will use your comment to offer a suggestion to DB regarding the site.

But first, I would be remiss if I did not say that I think the new site has come along quite nicely, and I appreciate DB having taken many suggestions and incorporating them quite promptly into the site.

If you think this buttering up is prelude to another suggestion, well, here goes:

I sometime find conversations continue long after I lost track of an article, to my detriment as I might have benefited from (or added benefit to) the dialogue.

I have seen used effectively elsewhere a running list of "recent comments." Regardless of the thread, a running list is maintained, identifying the article, feedbacker name, and first few words of the post.

See the Mises blog for example, on the right hand column:

Click to view link


I know your page is pretty full, perhaps this could be another tab in the section of "Most Popular" on the top right?

In any case, whether or not you do something with this, I think the new site is very good. I wanted to take some time to get used to it, and give DB a chance to work out the bugs (whoops) and incorporate enhancements.

I like it!

  Posted by rossbcan on 05/21/11 12:11 PM

"you can make up your own definitions."

The whole point of "language" is symbolism to name, undersytand and classify REAL physical phenomena. My "definitions", to the best of my ability match observable, measurable physical reality. Ask youself: WHY are real scientists and engineers, by their accomplishments so far ahead of the "human sciences"? IMHO, it is because we use fact, reason, logic and the language og mathematics (intolerant of lies), while the humanities are based on unproven assertions, opion and subjective concepts.

Subverting language, symbology and knowledge is elite weapon #1.

  Posted by dotti on 05/21/11 12:09 PM

Reply should have been:


Ross, nothing is complicated as long as you can make up your own definitions.

  Posted by dotti on 05/21/11 12:01 PM

Re; There is a group here that is pretty effective at testing them and weeding them out.

Ross, nothing is complicated as long as you can make up your own definitions.

  Posted by rossbcan on 05/21/11 11:48 AM

"Defining intelligence is complicated;"

Not really. To a simpleton such as myself: Intelligence is merely the ability to establish facts and integrate them with proven knowledge (relationship between action and consequence determined by environmental forces). This is used to make a choice which is sometimes based on an informed prediction of the future, based on past events. In other words, intelligence is how well you adapt to your environment.

An IQ test is an environment. Results are a matter of how well you handle this environment. Thus, by IQ test design, you can "prove" whatever you want. THINK about it:

Click to view link

  Posted by dotti on 05/21/11 11:26 AM

Re: And have FUN with the ones that irritate!

I actually laughed out loud on that one!!! Thanks.

Re: It wouldn't help me much if everyone here sounded like me!

I TOTALLY agree. I avoid serious discussion with people who mirror my views, but with nothing to add. I work hard at remaining open to opposing views as long as they are presented in a logical, articulate, and fair way.

Re: There is a group here that is pretty effective at testing them and weeding them out.

I have wondered from time to time if I am being tested here--seeing how I would respond and how difficult it would be to weed me out!

I consider you and John among the sane here. And I agree with the two of you that I should not allow my frustrations to interfere with a wonderful opportunity to interact with minds far, far sharper than mine.

Re: And have FUN with the ones that irritate!

Hmmmmmm. I have never sought to "irritate back", but it sounds like it could be fun.

Tally ho!!!

  Posted by bionic mosquito on 05/21/11 11:11 AM

I second all of what John says here. I will add:

1) DB is also made up of humans (elves?), with opinions, viewpoints, etc. I will not say right or wrong opinions; that is the point of discussion. The rational and logical is honed from the back and forth.

2) It seems to me you have participated about a month or so now. You have missed some real winners who came and went before your arrival - far more extreme than cat writer. They come and usually go. There is a group here that is pretty effective at testing them and weeding them out.

3) I have found, even with the feedbackers that might irritate me, that it makes me better in understanding the whats and whys of my views. It wouldn't help me much if everyone here sounded like me!

The vast majority of feedbackers here add real value for me. Providing new insights, constructive critique, challenging questions, etc. Approach the site and the feedback with the right expectations, and it serves quite well.

And have FUN with the ones that irritate!

Reply from The Daily Bell

The Bug has always provided value and we would miss his presence.

  Posted by dotti on 05/21/11 10:40 AM

Thanks John, you got a big smile out of me with your comment: 'I ask you to interpret these exchanges as a way to learn about the threat you are up against, with the luxury of being out of the range of their physical weapons.'

Out of range, indeed.

Your post is quite persuasive and I have always found that worthy opponents open my mind: I either become more convinced of my views or I adjust my views accordingly.

Re: …the marketplace of ideas is going to include not only people with repugnant philosophies, but also those who seek to disrupt discussion and draw attention to themselves by irritating others (have we just seen a confession of this?).

Gee. I hope it's more the latter. Intentional disruption. Hmmm. Seems to fit.

Your garden analogy is a good one.

Even if I do not decide to continue to post here-although you have a very persuasive argument of why I should-I will continue to get my news here.

Thanks, John, for your encouragement.

Reply from The Daily Bell

Here's an idea: Stop arguing with Cat, while continuing to post!

  Posted by John Danforth on 05/21/11 10:20 AM

P.S.

"DB: We find cat writer, on the whole, to be more enlightened than bigoted"

DB is generous with the benefit of the doubt and allows poetic license. It is up to the individual to remove all doubt. Heh.

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