Mike Holland

Private Credit Ares Breaks Private Credit Record With New $34 Billion Fund : Jumbo deal highlights direct lending’s advance on banking turf $34 billion for its latest direct lending fund, the largest fundraise ever in the burgeoning private credit market : Equity commitments of $15 billion exceeded $10 billion target “I feel really good about the fundraising and the supply of capital versus the demand” “Everything we’re seeing would indicate that deal flow will pick up as we move through the year” creation of such a massive fund underscores the momentum in the roughly $1.7 trillion industry, with every major alternative asset manager pushing into what’s become one of the hottest businesses on Wall Street. Direct loans have emerged as a go-to source of financing for companies while rates stay high and regulation limits bank participation in some of the riskiest loans : strategy typically targets companies with between $10 million to $150 million of adjusted earnings, but can also lend to larger firms. Ares typically sources deals from existing clients — “50% of what we do comes from our existing book of business”

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BG Groups Approach to Irrational Contrarian Investment & Fedspeak Bidenomics "If we only focus on the investment thesis strengths, we will get destroyed by its weakness by following Fed guidance with political distortions.As you may notice most hedge & short funds got destroyed in 2024 or sideline during Bidenomics Orwellian AI tech salvation.Jim Chanos & Co is shutting down his firm of $8B 2008,to $200M today."It is no secret that the long/short equity model is under pressure & interest in fundamental stock pickers has wanned, Buffet has $200B sideline". “We’re all wrong on the economy,markets & politics quite often says Mansa Musa Macro Manager at BG Group.Fed need to be independent & stop acting like an Orwellian pandemic rockstar on a massive Bidenomic misread destroying the US economy & enslaving middle class citizens forcing the US economy into trillions of unproductive fiscal debt & illiquidity. In Orwellian Investing-Freedom is Slavery,Quantative Tightening is Quantative Easing,Ignorance is Intelligence,Illiquidity is liquid props,Rate Cut Guidance is Rate Increase,transitory is permacrisis The Fed must get rid of forward guidance because the system was running well on a freemarket policy until Bidenomics came in with this repo- pandemic desperation unproductive ESG model with CRE destruction.And save the Western World Modi/Bibi Dheli G20 block & follow China scorched earth, ESG,WEF vaccine surveilance AI plan. Stanley Drukenmiller says on the Fed"when you put forward guidance out-they sort of get trapped into the forward guidance & stuck in it,”. Druckenmiller says the Fed should be even more independent & not provide forward guidance at all.“What I would do is just say nothing & do what the Fed chair used to do,”he said. Fedspeak guidance went Orwellian on interest rate thought with Biden China block & compete with scorch earth genocide.By 2026,all real knowledge of Fedspeak has disappeared with Volkerism irrelevance. It only existed in Orwellian versions,changed into something different,into something contradictory of what they used to be.Climate thought is different,there is no thought,as we understand it now.Orthodoxy means not thinking–not needing to think.Orthodoxy is unconsciousness. Fed has developed the non speak on derivative holdings & rate direction by giving conflicting guidance while relying on data thought & double speaking on the direction of interest rates creating serious misdirection & risk. The megabanks hold massive bets on the direction of interest rates via their derivative holdings but their securities divisions are also contractually obligated to buy Treasuries at each auction as part of being a “Primary Dealer” to the Fed,now Fed buybacks. Throwing gasoline on the interest rate spike were comments by Minneapolis Fed President Neel Kashkari-CNBC.Kashkari said Fed interest rate hikes should not be ruled out.The megabanks & the debt markets have been eagerly anticipating interest rate cuts by the Fed.

On a day when a major index like the #Nikkei is down 12% #crossasset #correlation probably moves to 1 - but when the dust settles cross asset performance will diverge again and provide alpha opportunities for #multiasset portfolios - bull steepening of the yield curve will likely continue (a favorite trade by our US #rates team) - the BCA Research global #assetallocation team analyzed what a bull steepening means for cross asset returns

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Jerome Powell has received a strongly worded letter from Elizabeth Warren and two other Senators. Filled with lessons in economics 101, and over 30 external references, the letter runs to five pages. The letter "urges" him to cut interest rates. I'm not sure how he will take it. You can read the full letter which is on Elizabeth Warren's website by clicking the link below. If I was sending such a long letter I would probably accompany it with a hand written note summarising a few key messages. Below is a completely imaginary example of what Elizabeth Warren's hand-note might have said. "Dear Jerome, I am not writing to give orders to the Fed, nor to try and undermine your independence. Rather I'm attaching a friendly letter from your Senate to tell you what you should do. You're probably a bit busy to read all of the attached 5 page letter. So I'll cut to the chase. Here's what we want you to do; Cut the federal funds rate. Just in case you are looking for some kind justification, there's plenty. Everyone else is doing it. The ECB, Canada, Sweden, Switzerland, Hungary and the Czech Republic have all cut rates. What are you waiting for? Your preferred measure of inflation, the PCE, is already below 2% if you exclude everything which went up in price. Excluding Shelter alone would bring the PCE measure of inflation down to 1.8%. Don't forget, it's partly your fault that rents are so high. If you hadn't put rates up landlords wouldn't need to increase rents. What's more, we've seen a 75% fall in housing inventory caused by all these extra people. The rising demand and falling supply has caused rents to go up. It distorts the inflation figure. Shelter should be excluded. Here's another thing you could ignore. Motor Vehicle Insurance. It's up 23% in the year to April. Just exclude that, and you'll be close enough to your 2% inflation target. Motor Vehicle Insurance costs rose because there were more frequent accidents! How is that inflationary? Just disregard it! Lastly, high interest rates make everything cost more. Whether it's mortgages or the cost of financing a business, someone's got to pay for it. So to conclude. You are not doing anything to reduce inflation. You are risking a recession. This could put thousands of Americans out of jobs. We're not telling you what to do. We are not trying to impinge on your independence. But remember who appointed you. We want to honour you as a man who did the right thing, i.e. cutting rates when we told you to. So listen up. You have kept interest rates too high for too long: it is time to cut rates. Do it now. With all my love Elizabeth.

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Jerome Powell: "UNSUSTAINABLE".... "VERY CONCERNED". (Responding to a question on the deficit and the Congressional Budget Office forecast that debt is forecast to rise substantially over the next 10 years) When asked today, (14/5/2023), about whether the expanding deficits and national debt makes his life trickier, Jerome Powell responded: "I think it is utterly non-controversial to say that US fiscal policy is on an unsustainable path..." "We're going to have to deal with this sooner or later and sooner is a lot more attractive than later....." "I think you mentioned Congressional Budget Office. I think anyone, everyone, and anyone, should be reading the things they're publishing about the U.S. budget deficit and the path and should be very concerned that elected people need to get their arms around it sooner rather than later." Elsewhere in the Interview chairman Powell continued to say the usual things about the 2% inflation target. My feeling is that he is not far away from giving up on that target. "I expect inflation to move down to the lower levels we have been seeing over the last year. My confidence in that is not as high as it was having seen the readings..." "...Restrictive monetary policy lowers inflation. It cools the economy. The question you ask - Is inflation going to be more persistent going forwards? - I don't think we know that yet. We need more than a quarter's worth of data. I think there's some more there. I don't want to give up on it yet at this point....." On interest rates he steered the market away from expecting any cut, but at the same time indicated that, at this time, he does not think the next move will be a hike. To watch the full interview go here:

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Attending Opal Newport Race for the Returns Family Office and Wealth Management gathering Oct 21-24, 2004. I have substantial capital available. The current economic & high interest rate climate is making borrowing against your marginable, restricted and non marginable securities very difficult! The banks & brokerage firms are either tightening their requirements or NOT offering a liquidity option! For those executives and non affiliates who are in need of liquidity and are either contemplating selling their publicly traded shares or doing a margin transaction, I have a far better solution. I can provide you a unique non recourse lending product that many executives like yourself have used and continue to use as a better alternative to selling to access capital. In the event that the pledged collateral goes into default, the recourse is applied to the "paper" not you personally. This transaction allows borrowers to obtain loans against their securities in a fully compliant environment that meets all the requirements of the applicable regulations. We do not require a personal guarantee or credit check and funding can be completed in 5-7 business days. We can provide loans up to $50 Million USD secured by shares of common stock from qualified issuers on most Stock Exchanges worldwide. Also, unlike a margin transaction, you are NOT exposed to immediate liquidation in the event of a default. We give borrowers an ample "cure" period to bring the loan back into "good standing" because we understand fluctuating market conditions.  Lastly the interest charged is calculated as "simple" (non compounding) interest. Saving you thousands of Dollars over the course of the transaction. Here are the benefits of my stock loan : 1. Family Office provides the borrower a "non-purpose" loan with the liquidity they need to cover personal expenses or funding for their next business venture. 2. During the life of the loan, you make fixed (interest only) payments until the loan term is completed. 3. At maturity when the loan is repaid, we transfer the ownership of the stock back to you. 4. Any default on the loan only affects the stock. Your stock is the only property used to secure the loan. No other personal asset is required or needed in the event of default **If this this is of interest to you, a fellow Board member, a client or friend, I can email you a term sheet. The following information is all that's needed. I can have an individualized offer sent to you quickly. 1) Borrower status (affiliate or non affiliate) 2) Stock symbol 3) Number of shares to be pledged Feel free to contact me here or call me directly at 416 819 6891. Best regards, Bohdan Charyna 416 819 6891 [email protected] DISCLAIMER: Bohdan Charyna is NOT a United States Securities Dealer, Broker or U.S. Investment Adviser. I seek safe harbor.

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🚨 Hedge Fund Face-Off: Fee Cuts vs. Fee Hikes! 🚨 𝗕𝗿𝗲𝘃𝗮𝗻 𝗛𝗼𝘄𝗮𝗿𝗱 and 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗙𝘂𝗻𝗱 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 (𝗖𝗙𝗠) are taking radically different paths in the competitive world of hedge funds. One is cutting fees to manage costs, while the other is hiking them to stay ahead in the quant arms race. While the two are not direct competitors given their contrasting trading styles, I find it interesting the fees are going in different directions nonetheless. Brevan Howard Asset Management is slashing fees for its Alpha Strategies fund to manage high tech and talent costs. The management fee has been cut to 0% until the new year, then to 0.5% for one quarter, before reverting to 1%. Despite these adjustments, the fund, with $12.2 billion under management, faced a 3.6% loss this year through May. 📉 Capital Fund Management (CFM), on the other hand, is increasing its performance fee to 30% for its flagship Stratus fund, which has gained 8.7% this year. CFM's $11.7 billion Stratus fund excels in the quant arms race, boasting a robust 18.3% gain in 2022. 📈💹 While Brevan Howard is restructuring to reduce expenses, CFM is capitalising on market volatility and the demand for cutting-edge quant strategies. How will this play out? Time will tell. ⏳ Check out the CFM article here: https://bloom.bg/3SmtdGh And the Brevan article here: https://bloom.bg/3WxMoQ1 #hedgefunds #quantitativeresearch #portfoliomanagement #financialmarkets #investmentstrategy #fintech

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$GE 8% pullback is 3rd worst in $SPX today, but thus far has not broken support near its former breakout pivot. @IBDinvestors @marketsurge Volume quite heavy & breaking 175 to erase this breakout would be problematic in suggesting GE will pull back towards lows of its former channel For now, stock holding where it needs to #IBDPartner

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The Stakes of US Election - The 2024 US federal elections could reshape global climate progress. Former president Donald Trump and his Republican Party have vowed to repeal the Inflation Reduction Act, a keystone climate law that Vice President Kamala Harris and her incumbent Democratic Party hope to build on. The economic benefit of the US’s clean energy boom will likely shield the IRA regardless of who wins. But regulations, and looming tax bills, could still make big impacts. Republicans are often skeptical of climate spending and favor expanding fossil-fuel production and exports – but post-IRA investments in factories and clean energy have overwhelmingly gone to Republican districts. Democrats want to double down on the energy transition, although Harris has lately praised the US’s record oil and gas production. Either Harris or Trump will need both houses of Congress to pass most proposals they’re campaigning on. Democrats are almost certain to lose the Senate; Republicans may lose the House of Representatives even if Trump wins. Either result would limit the president’s ability to end or expand US climate laws like the IRA without a rare bipartisan deal. Still, presidents can act alone in several key areas. They can rewrite rules and priorities for federal agencies and programs like the IRA’s tax credits, grants and loans, which could dramatically change their impact on both emissions and firms. They can set tariffs that can scramble supply chains or protect infant industries. And they can veto Congress’s laws, too. Congress’s post-election agenda will be driven by fights over the IRA and tax policy. Key tax cuts passed during Trump’s first term expire at the end of 2025. While Republicans will be tempted to end IRA programs to ‘pay for’ these tax cuts, they likely lack the votes to repeal IRA tax credits that would undermine popular clean energy projects in Republican territory.

Dan Alderson's article on single name Credit Default Swaps is very much worth reviewing for all high-yield cash and derivative traders. While it is very complicated, from my perspective that is one of the main points. Dan makes the following observations: "The International Swaps & Derivatives Association will imminently publish findings of an independent review of the Credit Derivatives Determinations Committees, which it created back in 2009 when it hardwired credit event auctions into CDS settlement as part of the Big Bang Protocol." "This is pertinent when various distressed corporate borrowers — Altice, Ardagh, Atos and Intrum among them — are credit event candidates." "Crucially, any changes to DC rules require the backing of a supermajority of its members. That presumably puts a rather hefty obstacle in the way of any proposal to, say, completely replace the DC with another mechanism." "Isda, which used to oversee the DCs, moved to disassociate itself in the post-crisis years. In October 2018, it transferred its secretary role to DC AdministrationServices, which has ‘management support services’ from Citadel SPV — a somewhat mysterious entity not affiliated with Citadel Americas." “The current system is not good for those market participants that are not part ofthe DC but it also puts a huge burden and risk on DC members,” says Carlos Pardo, an independent CDS specialist who advises on credit event matters. “It is preventing the volumes from recovering but the need for the product is there.” "The Europcar auction in January 2021 was loudly lambasted in the press (lapping up the outrage of unnamed sources) for returning a 100% recovery price. It turned out the reason this came unstuck was because so many opportunists piled into shorting the name, once the credit event question had been raised, that orders outstripped available bonds. Those who had been short before on a genuine credit conviction had long since cashed out, before the auction operated exactly as its rules dictated." These are mostly the same issues we had in trading single-name CDS before the GFC. Furthermore, prices even for on-the-run 5y contracts are traded OTC and the trades are not posted on a public exchange, nor are historical prices freely or easily available. For off-the-run contracts, this problem is exacerbated. The majority of single-name CDS trades/traders are seeking to manage spread risk rather than default risk. However, the complexity of this product increases meaningfully once the paradigm shifts from trading with a focus on spread to an imminent default scenario and recovery analysis. #cds #derivates #isda

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My thoughts on the market currently: Very basic techincal analysis: This weekly close is going to be very interesting, if we close anywhere above the highlighted line if will be pretty good confirmation and a probabilistic reversal from that low- we sweeped the previous low aswell as bouncing off of heavy support. Some other key facts is the fact that OI is lowest it has been in months, largest leverage wipe since FTX crash, most market participants were expecting a bullish june(including me) however it was not and consensus switched from positive MTF( Medium Time Frame) to negative expecting lower. We got an initial move down first week of July and now consensus is aiming for lower. I expect the market to reverse on Monday (8th July). I am mostly focused on ETH here as we are preparing for the ETF and do believe with the potential of BTC closing weekly like this and then hold above next week we see ATH in the next few weeks (key word IF). I think that ETH will provide better returns in the short term especially if the ETF gets approved. #BTC #CryptoCurrency

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Quick thoughts on JPY intervention… i.) There’s a common misconception that the MoF/BoJ sell UST to intervene in FX and support the JPY. Actually, they’re most likely already using USD liquidity parked at Fed reserve banks (foreign RRP + cash deposits). ii.) This isn’t about “defending a particular level”. It’s all about shocking speculators that have become too complacent, and using the lack of liquidity as leverage. iii.) This isn’t a currency crisis. The BoJ/MoF have plenty of ammo. #BoJ #JPY #FX #intervention #Japan

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$CRUS Cirrus Logic monthly chart helps to put the last few mths of gains into perspective - This lengthy base from the mid-90's is staggering https://lnkd.in/eKM89_n2

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Funny but… Will the world be turned upside down by those who aren’t long for it ? 🧐🙈 (The Shock of the old: conformists or risk-takers? ) Birth rates are low. To keep the state solvent, old people will have to remain productive a bit longer. Expect, therefore, ever more eulogies from politicians and bosses about the advantages of age in the workplace. <Prudence, caution, restraint.> The most dramatic mental change that comes with age is a loss of interest in what others think. And that allows for more, not less, risk-taking. Last weekend, Carlo Ancelotti, 64, grandfather, stands to win his fifth Champions League title as a coach. Even if Real Madrid lose, his late-career success stands out in an ever-younger profession. What explains the resurgence of a man who was sputtering out at Everton in 2021? Over the past decade or so, football became regimented. A modern coach micromanages the passing sequences, the distances between teammates, the number of seconds a “press” goes on for. Even a casual watcher of the sport (like me!🧐) might have noticed the extinction of the Number 10, the glamour role, in which a team’s most gifted individual is licensed to roam and improvise. In place of Zidane and Özil: “machine football”. Ancelotti held out against this super-engineered version of the game. And so the phone stopped ringing. His low-intervention style was seen as derelict in both senses of that word: antiquated and negligent. He recognised two kinds of coach, “those who do nothing and those who do a lot of damage”. He had about him the air of a general from the musket era bemoaning mechanised warfare as unchivalrous. I don’t know if another Champions League title with this loose and expressive Madrid team will bring, in some kind of Hegelian antithesis, a turn in the tide against over-coaching. But I do suggest that a younger man would have been much likelier to cave in to fashion. The value of Ancelotti’s age isn’t prudence, then. It is almost the opposite: a defiance of convention, born of being long past caring about one’s reputation. Some of that insouciance was innate, no doubt. But it would have grown, not waned, with time. Well, we are going to need late-life restlessness from more and more citizens. Reducing their potential contribution to that of temperance and caution isn’t just a cliché. It ignores a world that is being turned upside down by those who aren’t long for it. (Janan Ganesh, sorry for the cuts, FT)

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Funny but… Will the world be turned upside down by those who aren’t long for it ? 🧐🙈 (The Shock of the old: conformists or risk-takers? ) Birth rates are low. To keep the state solvent, old people will have to remain productive a bit longer. Expect, therefore, ever more eulogies from politicians and bosses about the advantages of age in the workplace. Prudence, caution, restraint. The most dramatic mental change that comes with age is a loss of interest in what others think. And that allows for more, not less, risk-taking. Last weekend, Carlo Ancelotti, 64, grandfather, stands to win his fifth Champions League title as a coach. Even if Real Madrid lose, his late-career success stands out in an ever-younger profession. What explains the resurgence of a man who was sputtering out at Everton in 2021? Over the past decade or so, football became regimented. A modern coach micromanages the passing sequences, the distances between teammates, the number of seconds a “press” goes on for. Even a casual watcher of the sport (like me!🧐) might have noticed the extinction of the Number 10, the glamour role, in which a team’s most gifted individual is licensed to roam and improvise. In place of Zidane and Özil: “machine football”. Ancelotti held out against this super-engineered version of the game. And so the phone stopped ringing. His low-intervention style was seen as derelict in both senses of that word: antiquated and negligent. He recognised two kinds of coach, “those who do nothing and those who do a lot of damage”. He had about him the air of a general from the musket era bemoaning mechanised warfare as unchivalrous. I don’t know if another Champions League title with this loose and expressive Madrid team will bring, in some kind of Hegelian antithesis, a turn in the tide against over-coaching. But I do suggest that a younger man would have been much likelier to cave in to fashion. The value of Ancelotti’s age isn’t prudence, then. It is almost the opposite: a defiance of convention, born of being long past caring about one’s reputation. Some of that insouciance was innate, no doubt. But it would have grown, not waned, with time. Well, we are going to need late-life restlessness from more and more citizens. Reducing their potential contribution to that of temperance and caution isn’t just a cliché. It ignores a world that is being turned upside down by those who aren’t long for it. (Janan Ganesh, sorry for the cuts, FT)

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I've traded STIR for over 18 years. Couldn't help notice interesting surge in volume in SOFR Z4-Z5 calendar as spread narrows to 58bp. It is interesting as not only the market has begun to price fewer cuts in 2024, it has taken out more than an entire cut from 2025. Is the market beginning to price higher for longer? This could also imply that if the Fed cuts too soon, inflation might reaccelerate. It opens up some really interesting trades in mid curve options for me. What are your thoughts?

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Huge news in derivatives. In the past I’ve written about event contracts and prediction markets and how derivatives dealers have faced challenges from the CFTC, which wants to ban them. Well, the CFTC was just handed a resounding defeat. Prediction markets are back in a big way. Prediction markets, for the uninitiated, are markets for a type of financial derivative (an event contract) that allows users to hedge against (or speculate on, depending on your view) the outcome of a variety of things, from who would win an election, to what the weather would be, or how well a blockbuster movie would do in theatres, among many other things. These kinds of financial vehicles have legitimate uses. You may have a view that your business would be impacted by a Trump or Harris victory; that the weather might impact your outdoor business's season; or you might be a popcorn seller whose fortunes might rise or fall with the success of the next superhero movie.  With prediction markets, you can hedge all of these outcomes. That is to say, you can use a derivative that will give you some upside if a thing happens that you don't want to happen. Of course, you can also use these products to bet on any outcome without any specific hedging purpose in mind. That’s probably what the CFTC had in mind when it ruled against these types of prediction markets, saying that they are basically just gambling and therefore "contrary to the public interest." It's worth noting that if you're a sophisticated buyer you can go to your local investment bank's derivatives desk and they will craft a custom derivative for you to hedge pretty much any type of risk. The CFTC's problem is with making these things available to average Janes and Joes. To be fair, the CFTC also had some more nuanced reasons, including that they would be forced to regulate the underlying markets of these derivatives, which is outside of its scope. Whatever your view, prediction markets sure are interesting. Supporters argue that they are more accurate than polls and pundits, because, well, money talks. Liquid markets are not the worst way to find the price of something, after all. Polymarket (which is not available to US or Canadian consumers and which had its own enforcement action brought by the CFTC) is a big player in the space, but goes about it a bit differently. Instead of derivatives, Polymarket uses blockchain-based smart contracts that settle in USDC. (That's a great, real-world use case for both blockchain and crypto. But I digress.) I am not doing the decision justice. It's definitely worth a read. Link in the comments.

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Every day the markets are trying to predict how many rate cuts we’ll have this year and when they will happen. I recently sat down with Joseph LaVorgna, Chief Economist of SMBC Nikko Securities America, Inc., and asked him what Powell would do. (https://lnkd.in/e9HbXXeD) I appreciated Joe's uniquely nuanced perspectives as we discussed the tools Chair Powell has at his disposal. When there’s this much disagreement among economists about what the Fed should do, Joe reminds us that sometimes it’s Wayne Gretzky who has the answer. Many thanks, Joe, for an illuminating conversation. Joe's frank analysis of our economic policy is essential viewing for market participants. I encourage you to watch the entire conversation on our site. https://lnkd.in/e9HbXXeD #expertconversations #capitalmarkets #federalreserve #economics #interestrates

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