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There Was This Impending Factor That Their Money Would Cost A Lot More If They Waited

A report from the Miami Herald in Florida. “In the wake of the Great Recession, when traditional development loans were in short supply, local condo developers shifted financing onto buyers by requiring 50% deposits. Now, more and more developers are lowering the requirements, sometimes to as little as 10 percent. Thank the increase in younger domestic buyers, abundant inventory and the specter of a potential economic dip, say South Florida market experts.”

“Most reductions are at projects nearing completion. While that practice isn’t new, it has become more widespread — and at far greater reductions. ‘It’s a more recent phenomenon,’ said Joseph M. Hernandez, chair of the real estate practice group at Weiss Serota Helfman Cole & Bierman. ‘When [developers] face competitive pressures, or for a number of reasons, they can lessen the down payment.'”

“At Metropica, a 263-unit mixed-use development in Sunrise, developer KGH International is requiring a 10 percent deposit payable in two installments for locals, to attract younger buyers, with 25% for foreign buyers. That’s down from the initial requirement of 50%. A one-bedroom in its Tower One building costs $450,000. Earlier this year, after it had sold 80% of its inventory, the 131-unit Aventura ParkSquare dropped its deposit requirement from 30% to 10%. Twenty-four units remain with a starting price of $520,000.”

“‘We’ve lost a lot of Latin American buyers. Many buyers that we would want to entice to buy have cash-flow issues,’ said Liza Hernandez, vice president of sales for Aventura ParkSquare. In the past, she said, she saw Brazilian, Argentinian and Turkish buyers able to afford the 50% deposits: ‘The market was much more bullish. There was this impending factor that their money would cost a lot more if they waited.'”

“At Brickell Flatiron in downtown Miami, sales opened in 2014 with a 50% deposit requirement. After a few years it dropped to 40% and in April, to 30%. Fewer than 40 of the building’s 527 units are still available, with prices starting at $650,000.”

“‘I think that has more to do with the overall macro-environment,’ said Joseph Hernandez. ‘The further down the socioeconomic ladder you go, the more buyers are affected by this. There are murmurs of an economic recession. A lot of people are nervous about that and developers are no different. They want to clean out their inventory before any recession hits.'”

“He’s seeing projects with units priced from $1 million to $5 million starting sales at a 25% to 30% deposit rather than waiting until inventory has decreased. But don’t expect them to drop too low, he said. ‘The lower the deposit, it’s more likely that a buyer that can’t close will walk away,’ he said.”

This Post Has 99 Comments
  1. ‘At Brickell Flatiron in downtown Miami, sales opened in 2014 with a 50% deposit requirement. After a few years it dropped to 40% and in April, to 30%. Fewer than 40 of the building’s 527 units are still available, with prices starting at $650,000’

    That was 5 years ago.

  2. “‘We’ve lost a lot of Latin American buyers. Many buyers that we would want to entice to buy have cash-flow issues,’ said Liza Hernandez, vice president of sales for Aventura ParkSquare.

    Well, drug trafficking is a highly leveraged business, Liza. You lose a drug load, there goes your condo downpayment.

  3. In the past, she said, she saw Brazilian, Argentinian and Turkish buyers able to afford the 50% deposits.

    All scrupulously honest and enterprising fellows who scrimped and saved to be able to buy a slice of the American dream, per The Narrative.

  4. ok – its his money. If he is wrong, he gets hurt, if he is right, he makes money. Great.

    Speculators (not investors like Alejo) who put 10% or less down, put risk the banking sector, and potentially a new govt bailout

    Alejo Reimann, a 37-year-old Argentine who lives in Miami Beach, is buying two units in Brickell House as rentals. All told, he will put down 70 percent before closing on the condos two years from now. “I saw a very good investment opportunity,” said Reimann, who was contacted through the developer. “I see Miami long term as one of the most cosmopolitan cities in the world.”

    1. First impressions: this urban living is interesting. People have a lot of interest in finding a place for their dogs to poop. These Cubans aren’t like the Hispanics I’m used to. More polite. their Spanish sounds different too. I had a two hour delay last night, got here at 3:30 AM. Gonna hit the shower and head out.

        1. The taxi cab drivers always gouged us when we were going on cruises out of Miami. I know you’re not a fan of Uber/Lyft, but I was grateful when Uber/Lyft came along because at least I had some insight into the cost before we accepted.

    2. The deposit to the condo developer and the down payment to the lender are 2 different things. They may line up in many cases for people that initially put down say 10% to the developer may end up financing 90% of the loan.

      But agree overall that anything less than 20 to 25% down puts the system at risk.

    1. “Gosh, I better scamper on down to Mr. Banker’s office and sign on the dotted line for a shack before someone outbids me.’

      Don’t forget to bring a list of marketable body parts and your blood type.

      Having a good-looking teen-aged daughter is a plus. Bring her along on your visit and inquire about the Jeffery Epstein Dotted Line Special Discount.

    2. Gosh, I better scamper on down to Mr. Banker’s office and sign on the dotted line for a shack before someone outbids me.

      In theory, isn’t the signing performed at a title company/escrow/etc. office and not at Mr. Banker’s office?

  5. “‘We’ve lost a lot of Latin American buyers. Many buyers that we would want to entice to buy have cash-flow issues,’ said Liza Hernandez, vice president of sales for Aventura ParkSquare.”

    No more drug cartel money launders from the south? Can’t sell the negative cash-flow “investment” to the local speculators? Just cut the down payment! Next, cut the credit score to “non-prime”… This is clear indication of a Bubble Bust but the prices for high-end luxury has been cratering in Miami since 2014/2015.

    1. It was the Fed, not the PPT, that injected liquidity into the financial system. God only knows how much stock-buying is going on by the Fed and PPT. An indication of the Fed’s level of panic will come out of this FOMC meeting, when we’ll see how far the Fed intends to go to keep its Ponzi markets levitated.

      1. Seems very familiar. Do the banks not trust one another from a balance sheet standpoint where we see liquidity dry up due to reduced inter-bank lending?

  6. Yesterday protestors were burning the American flag in response to Trump’s visit to California.

    What kind of a statements is that? It seems like it’s a statement of anti America. I remember Iran burning the American flag chanting ” Death to America” .
    I wonder what would happen if a American went to another Country and burned their flag in town square. I guess our freedoms of speech laws allow this.

    But, this is just a example of the new wave of anti American activity that is sweeping America.

    1. The globalists and their leftist minions have a pathological hatred of everything that made America great, or could return it to greatness.

      1. Sovereign nations are the antithesis of Globalism. Just ask the Brexiteers how the Globalists are treating them.

        1. I think it goes even deeper to the Communist driving it.

          The Globalist gain by a diversion from what they are doing , but the greedy elites are just being used by the Communist to weaken America.
          Communist want to take over the World. It’s really no different than any power. They see America as standing in the way. For that matter you have some religious people in foreign lands that think they should take over the World

          While American/World History wasn’t always just, this idea that the individual had all these rights embraced in the USA Constitution was the game change.

          1. While American/World History wasn’t always just, this idea that the individual had all these rights embraced in the USA Constitution was the game change.

            What rights are being threatened? Seems like we still have right to assemble and freedom of speech as long as we can criticize our elected officials and protest.

          2. What rights are being threatened?

            Seems to me the 1st is heavily under assault. And of course the 2nd always is but we don’t even need to talk about that now. This whole deplatforming thing is interesting. Yes…private corporations can kick off whoever they want. But when everybody gets together and kicks people off all social media and then get the banks to reject all payments to them it’s not so clear cut…to me it’s a new form of censorship that doesn’t require the government to do it.

          3. Seems to me the 1st is heavily under assault.

            Yes, I do agree with that. DJT has called the press “the enemy of the people” so, yeah, I can see that the 1st is somewhat under assault. Also, there was word that he was trying to shut down gigantic baby balloon via the FAA.

          4. DJT has called the press “the enemy of the people”

            Knowledge is a powerful thing, right or wrong. When the press promotes lies they are a threat to the people.

            Socialism is the leading cause of poverty and death on the planet.

    2. ‘The lower the deposit, it’s more likely that a buyer that can’t close will walk away,’ he said.

      If you can’t close, you can’t close, which means you walk away.

    3. A group of communists who hate America, and yet here they are, in America, exercising their right to free speech.

      I’m so impressed. Let’s see them try and burn a North Korean flag in North Korea if they think they’ve got real balls.

      Doesn’t deserve press coverage.

      1. But it seems like these groups get all the press coverage, like they are trying to make them look bigger than they really are.

        1. Six corporations own every media outlet of note in this country. Every single one of them are controlled by globalist oligarchs, and tirelessly promote globalist-approved Narratives.

    4. Those protesters are so wrapped in rage that they miss the appearance their flag burning creates of being anti-American rather than anti-Trump.

    1. First rule of posting to a blog page: refresh to make sure it hasn’t already been posted.

      My bad, Ben. Sorry for the extra overhead.

  7. Atlanta Fed has growth rate this quarter at 1.9 percent. If Obama was president MSM would be filled with great economy stories. The inconvenient truth is that Trump growth has been much higher and Trump deficits much lower than under the Obama even including Obama’s second term averages. Hard to discern this if you just listen to the MSM. It is going to be interesting how large the September budget surplus will be. Most September benefits were paid in August, of course the MSM reported on the August deficit without reporting that fact. Now, we will have large tax payments in September with much lower expenditures since things like SS checks were paid in August.

      1. Banks were not open at the 3rd due to the holiday and the first fell on a Saturday due to that most payments were made in August and that will be reflected in the September numbers. I cannot address your individual situation but I do know if you dig a little on the internet you can confirm that fact.

          1. Yes it was the third on 2018, however the point was payments were made in August which last year were made in September. This year these payments will reduce the September deficit

          2. Labor Day was on Monday September 2.


            I got paid my SS on the 3rd of September. 2019. This month. Maybe payments due the 1st (Sunday) were paid Friday. Game changer in world prosperity contest? I doubt it.

    1. ‘Trump deficits much lower’

      Isn’t the deficit over $1T now? It seems to be moving in the wrong direction.

      1. Obama averaged over 1.1 trillion per year so they are still lower and that does not even take into account inflation or the fact that the government is not getting as much money from the Fed and is paying more interest due to the Fed raising interest rates.

        1. Investopedia says Pres. Obama’s average was $909B. Most of his were front loaded and occurred early in his admin. It was substantially reduced by the time he left office.

          1. The only way you get that number is if you shift the Fiscal 2009 budget to Bush. However that is garbage for two reasons Obama made changes after he took office which increased the deficit and two the accounting for bail out was bogus. The loans made out for the program were counted as expenditures under Bush but the repayments which occurred were counting as income under Obama, thus inflating the Bush deficits and undercounting the Obama deficit. If you are going to do that the student loans made under Obama should be counted as deficits and when they are paid back they are income for Trump. Of course no one is suggest that. Even though it actually underestimates the debt due to repayments as explained above Obama should own at least the debt he added from the date he took office to the day he left which is generous to him and it is 9 trillion or more than 1.1 trillion per year or almost a doubling of the debt of all other Presidents combined , however proper accounting would be more like ten trillion

          2. shows three ways to calculate the Obama deficit with $9 trillion be the most widely accepted, due to the TARP accounting I think it is closer to ten trillion and we have virtually nothing to show for it. It was new deal level spending but virtually no new infrastructure.

      2. It is never going to down for any significant length of time no matter which party holds sway. The entire economy depends on expanding the money supply through ever expanding debt. Remove this dynamic and the whole economy deflates like a popped zit.

        1. The entire economy depends on expanding the money supply through ever expanding debt

          The only question is how much debt do you want to carry. It makes you poor and tired.

          1. As one of the little people, the amount of debt I want to carry has little effect on the outcome. I’d prefer to carry zero debt. But the central planners will borrow lots of money on my behalf and insure even much greater borrowings with my money.

    2. The inconvenient truth is that Trump growth has been much higher and Trump deficits much lower

      “Inconvenient truth” sounds vaguely familiar. Where have I heard that before? No matter. I don’t think it’s true that the deficits belong mostly to the president. He can promote things but not actually spend the money. Congress does and they have consistently been a bunch of irresponsible spendthrift debt donkeys.

      1. Under our system of checks and balances you need both Congress and the president to want fiscal austerity to achieve a balanced budget. Practically, that means both the Democrats and Republicans have to want it since it is seldom when one party has enough votes to push it through alone. Reagan never even had a Republican house. Obama had both the house and Senate with filibuster proof majorities but only for two years. However he had a chance to enact a bipartisan plan to cut the deficits, save social security but he did not want to go down the path. The last decision by Congress was for each party to get it’s spending priorities. I think that the Democrats have just figured out that it gives Trump the inside track to re-election. I said it when it was done but the Democrats are not the sharpest knives in the drawer.

  8. I just wanted to chime in with an observation that’s hitting me full force lately… really seems to no longer give price history data at least for new listings that’s number one… Number two, their use of artistically enhanced “photographs“ are becoming incredibly prevalent and deeply disturbingly unrealistic. In my constant checking of the listings in Ann Arbor Michigan I’m seeing watercolor like depictions of sunsets and house lights and fireplace glow lol. I’m fully expecting Santa Claus to be appearing in these depictions pretty soon swooping down on the lightly frosted roof of properties As the holidays approach. It really feels like the misrepresentation encouraged and work-shopped most likely by the REIC will never be reigned in and knows no bounds. I’m assuming there’s probably a listing wizard for sites like that are alerting realtors with new listings to avoid giving any price history data, advising them to erase the old records, and using their fun easy program to “enhance” the looks of their shack for sale! I feel like I’m looking at Thomas Kincade paintings when I checked the new listings LOL

    1. Fortunately in most States sold prices are public, you just need to check with your County or have computer access to public records. Michigan is one one. The States that aren’t:Alaska
      New Mexico
      North Dakota

      I live in a non-disclosure State and it sucks. There has been a lot of toying around with price history including and not limited to re-listing on through a different MLS, plain old omission. It may be worth asking a re agent to provide you with the price history, there is a chance they may not give it or not try very hard but it definitely is something they have access to. I don’t think they have any compunction in providing the info if they see a possible transaction for themselves in “working with you”. If you don’t ask it’s not likely it will be offered to you. I would rather not work with a realtor and have the data available to me but at this point in time other options are limited if a property is signed up with the real estate monopoly folks.

    2. Have noticed and commented on same in San Diego. In some neighborhoods where prices have really skyrocketed, my guess 20-30% of the listings have no price history even though the houses are 50 years old. It is especially bad with flipped properties. I assume the goal is to hide from buyers just how much they would paying relative to a short time ago. How many people would pay 650k for a house that was sold for 525k in 2015 with no updates in the interim?

  9. Dallas Business Journal
    Reynolds Signature Homes files for Chapter 11
    bankruptcy – Dallas
    Frisco custom homebuilder files for Chapter 11 bankruptcy … The Dallas-based housing analyst’s data shows 8,925 starts in the typically supercharged buying …

    1. BTW, this hotel I’m staying at (which also has some condos) is practically empty. I shot some video today and the number of condos in Miami is staggering. When it gets dark I’m going out again to shoot some night scenes and we’ll see how many dark windows there are.

      These people have some snarled traffic to contend with. I don’t think the street system was capable of what the development put on it.

        1. Ha! I grew up in Miami (before the elevated roads (yes I’m that old))
          Hell now when it rains in Miami it floods! And traffic? Its always been a mess! The mantra in Miami has always been just build keep building… build… build… build.

      1. Didn’t the former site have a place where bloggers could post up photos and videos?

        I was recently in Shanghai and Shenzhen and whoa nellie (in Keith Jackson voice) I couldn’t believe how many ghost towers I saw. I knew it was bad but not what I was expecting…

  10. As always, be aware of your surroundings.

    Video Of Brutal Minneapolis Mob Attacks Goes Viral Amid Police Shortage

    by Sandy Malone
    23 hours ago

    Minneapolis, MN – A series of disturbing videos has been released that showed mobs of men beating and robbing people in downtown Minneapolis (video below).

    That video showed a man being pummeled by a mob of people as he lay on the ground.

    Then the robbers started running and jumping on their victim. Another man rode a bicycle over the man, the video showed.

    The video showed the attackers took off the man’s pants and beat him with a belt.

    The second video was equally disturbing, and showed two men being beaten outside of a steakhouse in the same general area.

    The men tried to fight back but were outnumbered and overpowered, the video showed.

    One of the men was knocked unconscious and fell to the ground but his attackers continued to kick and beat him.

    A third video showed a man being surrounded by a mob, who then proceeded to beat him severely.

    In all three instances, the attackers stole something from them while the victim was on the ground, the video showed.


    Living the dream.

    Paul Joseph Watson | – SEPTEMBER 18, 2019

    “Constructed out of low cost and readily available 2.5m diameter concrete water pipe, the design utilizes the strong concrete structure to house a micro-living apartment for one/two persons,” states a promo for the product. “OPod Tube Houses can be stacked to become a low rise building and a modular community in a short time, and can also be located/relocated to different sites in the city.”

  12. Again, not sure how this realtor got my email but she’s been spamming me all month. If it wasn’t too sad and desperate, it would be funny.


    Hope Everyone had a Wonderful Summer and Looking forward to Fall & Cooler Temps! AND As Always, I am here to Help YOU with your Real Estate Needs!!!!

    Those Overpriced homes on the Market this Summer- Now Dropping their Prices $20-$30k off List Price- I texted everyone an example- 4 Bedroom Home was $380k, now at $350k- and it’s a Beauty!!! Pic Below.

    for sale marigold frt 350k.jpgfor sale marigold bckyd.jpg

    I just helped a Client of Mine, Susie , buy a home with ZERO Down- She used the Down Payment Assistance Loan Program, and She is so Excited- No more throwing money away on RENT, she will be building Equity in her home!

    lindas freakin excited pic.jpg

    The Funds for this Program are getting Low and might Run out by Year End- So if you still are Interested in Buying a Las Vegas Home- Do it by Year End to SAVE some Money. Feel free to call me Anytime- I am Available to Help you and Answer any Questions!

    Click below to View a Video with more Info!

    Making your Realty Dreams a REALITY!

    Linda Eden, REALTOR®
    DIRECT- 702-280-xxxx “

  13. Do trade-related growth concerns keep you up at night?

    Perhaps there’s no real worry, given the Fed’s readily available liquidity fire hose.

    1. The Financial Times
      Global Economy
      OECD warns Globaltrade tensions could create low-growth trap
      Economic forecasts downgraded as impact proves worse than thought
      Laurence Boone, chief economist at the Organization for Economic Cooperation and Development (OECD), speaks during the ‘ECB and its Watchers’ conference in Frankfurt, Germany, on Wednesday, March 27, 2019. Some ECB officials have warned in recent months that keeping interest rates below zero for longer than planned as it may at some point prevent the stimulus from reaching the economy because they’re hurting bank profitability.
      Chris Giles in London 31 minutes ago

      The world’s leading economies need to ease trade tensions and act decisively to prevent a descent into a low-growth trap from which it would be difficult to escape, the OECD warned on Thursday.

      Labelling the economic outlook as “increasingly fragile and uncertain”, the Paris-based international organisation forecast that Britain would fall into recession if it left the EU without a deal and eurozone growth would slow to close to zero.

      Evidence is accumulating that the effects of trade tensions are greater than previously thought, the OECD said, urging all countries to stop erecting tit-for-tat trade barriers and to fight the economic slowdown with a fiscal stimulus, where public finances allowed.

      The OECD downgraded the economic forecasts for almost all of the countries it examined, cutting its global growth projection for 2019 by 0.3 percentage points to 2.9 per cent, the weakest performance since the 2008-09 financial crisis.

      With little improvement foreseen in 2020 and big forecast downgrades, OECD chief economist Laurence Boone said: “The danger is that we get into a vicious circle of lower trade, investment and higher uncertainty.”

      She blamed multiple trade tensions, ranging from the US and China’s battle over tariffs to the skirmishes between South Korea and Japan on crucial goods for technology supply chains and the US threats to impose tariffs on European car imports.

      “The speed that trade tensions are materialising is worrying,” she said, adding that the effects “can be seen in how trade [volume] growth has collapsed”.

      1. Some ECB officials have warned in recent months that keeping interest rates below zero for longer than planned as it may at some point prevent the stimulus from reaching the economy because they’re hurting bank profitability.

        No banker left behind?

    2. Move along, folks. Nothing to see here.

      For a second day, the New York Fed spent billions to calm the financial market
      By Matt Egan, CNN Business
      Updated 6:08 PM ET, Wed September 18, 2019

      New York (CNN Business)
      For the second straight day, the New York Federal Reserve injected a huge sum of money into the financial system in a bid to calm stress in the overnight lending market.

      The Fed on Wednesday poured another $75 billion into the market following a $53 billion rescue by the NY Fed on Tuesday. Overnight lending rates have suddenly spiked, and the Fed is acting to bring them back down to keep markets functioning smoothly.

      Until this week, the Fed hadn’t launched an operation like this since 2008.

      Federal Reserve Chairman Jerome Powell said during a press conference on Wednesday that these steps were “effective in relieving funding pressures.”

      1. Urgent!, In need of a cu$hion + a buffer. ($ounds like a rough road$ ahead!)

        Capital market$
        Fed intervention in repo market a step towards more QE
        Interest rate $pike is a sign the central bank needs to re$ume a$$et purchase$.

        Financial Times |September 18, 2019 | by Michael Mackenzie

        Financial plumbing is technical, but it matters. The re$umption of quantitative ea$ing, in at least the form of baby steps, appears closer than many think.

        When repo rates $pike, as they did this week, that is a sign that the financial $ystem does not have enough ca$h on hand. Such an outcome was foreseen a couple of years ago, when Lorie Logan, head of market operations and market analysis at the New York Fed, said in May 2017: “Upward pre$$ure on overnight intere$t rate$ is the most direct indicator that reserve$ are becoming $carce

        Joe LaVorgna at Natixis says: “Rising financing needs effectively drain reserves from the banking system because primary dealers need to [ab$orb] the Trea$ury auction$. The ensuing shortfall in reserves leads to a bidding up in the cost of overnight financing.”

        Thomas Costerg, senior economist at Pictet argues: “The Fed needs to leave a cushion of bank reserves and they will need to resume [Treasury] purchases.”

        Analysts at Bank of America Merrill Lynch estimate the Fed will purchase a total of $400bn$ in Treasurie$ over the next year. This reflects $250bn$ that re$tores “an ‘abundant’ re$erve level plus a buffer” of $150bn$ a year “to maintain this reserve level”.

        The current figure of $1.4tn in bank reserves held at the Fed appears large, but much of it is tied up because of regulatory and liquidity requirements.

        1. It’s going to be interesting to see how they resume QE without inadvertently forcing Treasury bond yields to negative. Sounds like alot of financial plumbing will have to be involved.

    1. Opinion: Baby boomers fail at investing by avoiding bonds
      By Jared Dillian
      Published: Sept 19, 2019 4:34 a.m. ET
      They should be holding more fixed-income investments than every other generation
      Getty Images
      Many baby boomers, approaching retirement, hold few bonds in their investment accounts.

      Baby boomers, man.

      Before I begin, a good rule of thumb for anything I write: Don’t take anything personally. Here we go: Baby boomers are the worst investors in the world.

      I have seen it with my own two eyes. They got gorked up on dot-com stocks in 1999, then got rinsed. They got gorked up on stocks again in 2007, then got rinsed.

      They are gorked up on stocks again. Have you ever tried talking to a baby boomer about their asset allocation?

      Hey, Dad… uh, you’re getting close to retirement. Don’t you think you should lighten up on stocks?

      We all know how that conversation goes. Not well. Especially with cable news turned up to 11 in the background.

      1. Want a little income in retirement? Start out with a lot! Bonds are for losers. Losers looking for safety wear a belt and suspenders. Bonds remind me of faux wood trim in a sports coupe. Modern trim upgrades have that faux carbon fiber. FWIW, phuc bonds!

        1. You’re a absolutely right. Anyone who invests in bonds is certain to lose his shirt.

          Austrian economics
          Austria’s 100-year bond has delivered stunning returns
          Its price will crash if interest rates rise. But most buyers won’t live long enough to regret it
          Sep 12th 2019

          NO ASSET SHOULD be sleepier than the sovereign bonds of rich countries. In exchange for holding “risk-free” debt, investors accept low returns. In real terms, American ten-year Treasury bonds have returned just 1.9% a year since 1900, compared with 6.4% for shares. Since 2017, however, one bond issued by one rich country has returned a whopping 75%.

          The country is Austria, and the coupon on the bond is just 2.1%. The secret to its success is its unusually long term. Lenders will not get their principal back until 2117, 100 years from the date of issue.

          1. Reminds me a of the “lifetime guarantee” on so many products. I have to ask myself, whose lifetime are we talking about? Mine, or your company’s?

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