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Postby Shapley » Thu Jul 20, 2006 4:38 pm

Barfle,

Valid point.

And, since there are government programs in place to ensure that the poor are entertained, such as NPR, Government funded parks, baseball stadiums, concert venues, etc., doesn't it follow that we should have a government program that allows poor people to gamble? Why should a lack of ante keep the poor from the poker table? Why should a chance at the slot machine be denied the homeless because they don't have a nickel? Isn't that discriminatory? Particularly so when you realize that the government is invested in the gambling industry via lotteries and casino regulation.

It's time we initiated a nation gamblecare system, to allow the hardworking men and women who, through no fault of their own, don't have enough money left at the end of the week to play the numbers racke.... er.... lottery. It's unfair that only those rich enough to get tax cuts from President Bush can afford the ante at the World Poker Championship, or the five dollars needed to get the best odds on the Dollar Slots.

Stand up for fairness! National Gamblecare! Ante for all!

(I'll lay you 20:1 odds the cause doesn't catch on.) :D

V/R
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Postby BigJon@Work » Thu Jul 20, 2006 5:06 pm

This conversation was started because GC equated gambling with business and investing, not hobbies. All hobbies take our time and our money by definition, otherwise they'd be called businesses. :)

There are hobby "businesses" and "investing" too. Never intended as an investment, done for fun with no concern for return. (Say that last phrase out loud)
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Postby GreatCarouser » Thu Jul 20, 2006 8:58 pm

BigJon@Work wrote:
GreatCarouser wrote: People who want to make 'gambling' illegal but are 'ok' with stock and commodity markets have no real understanding of any of them. Which leads me to wonder whether stock brokers, commodities brokers, insurance agents and the like are allowed to give evidence before a Talmudic Court? This last is not to single out DavidS, Israel, or Judaism in any way, I just read his post and was curious...

Gotta break this out GC. Traders are no different than gamblers. There is a winner, there is a loser, the house takes it cut and no wealth is created, except for the house. Investing in stocks and bonds for the long term is not the same as gambling because the businesses can actually create wealth and are in business to do just that. Insurance and commodity brokers have legitimate purposes to reduce risk of catastrophic loss, just because they are used by traders to gamble doesn't make them inherently gambling enterprises. Your analogy is shallow and malformed and if you don't understand the differences, you should be doing a lot of study. As much as I hate traders and trading, they have made the US markets the most liquid and easy to use in the world. Ever the useful fools.


I've been reading posts here and want to get back to 'the heart of the matter' as I see it. First some definitions: http://dictionary.reference.com/browse/gambling

I state the premise that " (p)eople who want to make 'gambling' illegal but are 'ok' with stock and commodity markets have no real understanding of any of them." By definition games of chance, stock and commodity markets are all gambles. The relative quality of return, safety of investment, or 'morality' of method don't change that fundamental fact. If you wish to argue those that is your privilege but it does not change the fact that all are speculative (i.e. 'gambles') to some degree.

If you now see that stock and commodity markets are 'gambles' then we have a locus to continue the discussion. I believe you can have only two logical arguments against 'games of chance'; moral or qualitative. All variants will eventually boil down to one or the other of these.
If you are going to argue 'gambling' is immoral you must include speculation in stock and commodity markets in that argument. If you are going to make qualitative arguments such as "we have government oversight and law to insure the safety (relative....even if you reduce the risk of total loss to .000000001% there is still some chance of it happening therefore it is a 'gamble') I counter with we have laws and government oversight to insure the fairness of 'games of chance' and just as you have free choice whether or not to participate in stock or commodity markets no one is forcing you to 'gamble' at 'games of chance' or other forms of 'gambling' either. Please note that neither argument thread in any way changes or refutes the main contention of my premise: that gambling, stock and commodity markets are all 'gambles' and folks who wish to ban one or two but not all three have a fundamental misunderstanding of the basic nature of all three.
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Postby barfle » Fri Jul 21, 2006 7:00 am

Shapley wrote:Barfle,

Valid point.

And, since there are government programs in place to ensure that the poor are entertained, such as NPR, Government funded parks, baseball stadiums, concert venues, etc., doesn't it follow that we should have a government program that allows poor people to gamble?

In many places, we do. It's called the lottery (which I occasionally play, too). I do see people who can't afford it buying 25 tickets, when I'm buying five.
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Postby barfle » Fri Jul 21, 2006 7:07 am

BigJon@Work wrote:This conversation was started because GC equated gambling with business and investing, not hobbies.

I see distinct parallels between gambling and speculating in commodities such as grain futures and that amazingly bizarre market - rare coins.

But I am equating gambling with other forms of entertainment. While some people in the entertainment industry get ridiculously wealthy, only the infrastructure that supports it creates anything that would come under the title "wealth."

So how is the local megaplex or stadium complex that much different from a casino, except that the owners of the casino have laws that restrict their competition in particular because of ethnicity or location?
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Postby DavidS » Fri Jul 21, 2006 9:37 am

If I may clear the air just a tad, I would like to sum up my attitude towards gambling and speculation.
1. I have no moral attitude towards gaming per se, apart from finding it (for me) an uninteresting pastime - a pure matter of taste; in my military reserve days people used to spend hours playing backgammon (for money), I was more connected to those playing chess, reading books, or listening to classical music.
2. Gambling can be habit-forming, so rehabilitation programmes might be useful.
3. The Talmudic sanction is based on a legalistic definition of "property acquisition" - as explained by bignaf - which regards professional gamblers as con-artists.
4. I agree that a fine line divides between gambling, wild speculation, "Stock Exchange flutters", and the whole field of investment. Admittedly, when approached by "Investment Consultants/Brokers", I am irrevocably conservative and will only agree to putting my money into the most solid channel possible, that which will keep me from suffering from the erosions of inflation - but with the best "likelihood" of doing so. Assurances of "possible mega-profits" do not appeal to me!
5. What can I say? When you buy a new car of any particular brand, do you know what the market value will be when you trade it in X years from now? That is also a gamble - forced upon us...
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Postby bignaf » Fri Jul 21, 2006 11:08 am

barfle wrote:
bignaf wrote:
barfle wrote: Seriously, of what value is a concert?

good art music is more than entertainment.

1. So what is it, then? And how is "good art music" different in that respect than Celine Dion music?

2.How do any of these create wealth? Are their customers any better or worse off than the gambler?

What wealth is created in a baseball game? There is an infrastructure (equipment manufacturers, stadium construction, souvenir vendors and the like), but is that wealth being created?

How about movies? How about streaming Internet radio stations? How about dance bands? Theme parks? Churches? Art galleries? Fiction books? How do these differ in entertainment value from casino gambling?

All of these are simply indications of a society with enough wealth that it can spare a substantial fraction of it to keep itself entertained. And that's not a bad thing.

question one is for evey person to answer for him/herself, if you can't answer it, I can help you on to the right track. But I think most people here can attest from their experience, that music creates deeper experiences than mere entertainment.

I did not argue with you regarding your larger idea presented in question two. it is pretty self-evident.
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Postby Shapley » Fri Jul 21, 2006 11:44 am

I think one goes to a concert with the expectation that they will be emotionally richer but financially poorer (unless they go to a Celine Dion concert, in which case they lose on both accounts :D ).

If one enters a casino with the sole purpose of being entertained, then there is no difference between the two. If on the other hand, one goes there with the expectation that they will come out richer than they entered, then they have a problem. Keeping in mind that we are talking about a 'zero sum' game, for every dollar that leaves in winnings, there has to be a dollar in losses on someone elses part, and the house has determined the odds to ensure that it will win significantly more often than it loses, the losses will come primarily from the players, most of whom entered with the intent of winning. As I said earlier, there is no 'creation' of wealth, as no value is added to the monies that enter the facility. In order to win 'big time', someone has to lose 'big time', or several someones have to lose 'small time'. There is no way around it.

I've not attempted to weigh in on the morality of the issue. As a Catholic, I do not consider gambling immoral but, like all venues, has to be practiced in moderation.

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Postby bignaf » Fri Jul 21, 2006 12:02 pm

If on the other hand, one goes there with the expectation that they will come out richer than they entered, then they have a problem.

only if they're playing self-weighting games. if they use skill to minimize the impact of luck (as in poker, Blackjack, and some betting strategies in other games), they don't necesarilly have a problem.
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Postby Shapley » Fri Jul 21, 2006 12:18 pm

bignaf wrote:only if they're playing self-weighting games. if they use skill to minimize the impact of luck (as in poker, Blackjack, and some betting strategies in other games), they don't necesarilly have a problem.


Not entirely true. They still have to deal with the skill of the other players. If they are fortunate enough to sit at a table with a number of players of lesser skill, then their odds are improved. If they are seated at a table with players of equal or greater skill, their odds are diminished. All in all, when you come down to it, skill and daring are no match for an unlucky deal of the cards.

Besides which, casinos routinely bar those who show a propensity for weighting things too heavily to their advantage, such as card counters. Casinos are not in the business of losing money.

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Postby BigJon@Work » Fri Jul 21, 2006 12:37 pm

GreatCarouser wrote: I've been reading posts here and want to get back to 'the heart of the matter' as I see it. First some definitions: http://dictionary.reference.com/browse/gambling

Possibly the worst source of definitions next to the urban dictionary.

GreatCarouser wrote: I state the premise that " (p)eople who want to make 'gambling' illegal but are 'ok' with stock and commodity markets have no real understanding of any of them.” By definition games of chance, stock and commodity markets are all gambles.

And this is the fundamental flaw of your argument. Just because they are used as a form of gambling does not make all use of them a gamble. Your definition sucks and it not universally held. I think the people whom you wish to tar actually do have a correct understanding; it is you who does not.

GreatCarouser wrote: The relative quality of return, safety of investment, or 'morality' of method don't change that fundamental fact.

It absolutely does, because genuine investing has the opportunity for winning for all participants, gambling does not.

GreatCarouser wrote: If you wish to argue those that is your privilege but it does not change the fact that all are speculative (i.e. 'gambles') to some degree.

Once again it is you who chooses to frame the argument in non-standard terms. Risk abounds and surrounds us all. Have you ever heard the phrase “You take a risk by getting out of bed in the morning”? You can confront risk and attenuate its effects by careful planning and disciplined action. If you want to apply the word gambling to this you may, but it is a colloquialism and not helpful to the terms of this argument. I’m pretty confident that the large majority of people don’t see living as gambling, yet they are taking risks every day. You can’t seem to differentiate. Gambling is a closed system, risk is open ended.

GreatCarouser wrote: If you now see that stock and commodity markets are 'gambles' then we have a locus to continue the discussion.

Nope, I will not concede the point. Traders are gamblers, just because they choose to use an open market system to gamble does not make the market itself a casino. People gamble on sports, does that make sports leagues into casinos?

GreatCarouser wrote: I believe you can have only two logical arguments against 'games of chance'; moral or qualitative. All variants will eventually boil down to one or the other of these.

Yep, gambling is dumb and the gambling business steals money from dumb people. Just because it is legal, doesn’t make it moral.

GreatCarouser wrote: If you are going to argue 'gambling' is immoral you must include speculation in stock and commodity markets in that argument.

And I do.

GreatCarouser wrote: If you are going to make qualitative arguments such as "we have government oversight and law to insure the safety (relative....even if you reduce the risk of total loss to .000000001% there is still some chance of it happening therefore it is a 'gamble')

Nope, I make the free market argument that investment is open-ended and contains the possibility for winning for all participants. Government oversight is desirable to prevent fraud, but no government intervention is required for success for participants in a open system. It is not a qualitative argument at all, but a systemic one.

GreatCarouser wrote: I counter with we have laws and government oversight to insure the fairness of 'games of chance' and just as you have free choice whether or not to participate in stock or commodity markets no one is forcing you to 'gamble' at 'games of chance' or other forms of 'gambling' either. Please note that neither argument thread in any way changes or refutes the main contention of my premise: that gambling, stock and commodity markets are all 'gambles' and folks who wish to ban one or two but not all three have a fundamental misunderstanding of the basic nature of all three.

Again, it is you who has the fundamental misunderstanding.
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Postby bignaf » Fri Jul 21, 2006 1:50 pm

Shapley wrote:Not entirely true. They still have to deal with the skill of the other players. If they are fortunate enough to sit at a table with a number of players of lesser skill, then their odds are improved. If they are seated at a table with players of equal or greater skill, their odds are diminished. All in all, when you come down to it, skill and daring are no match for an unlucky deal of the cards.

Besides which, casinos routinely bar those who show a propensity for weighting things too heavily to their advantage, such as card counters. Casinos are not in the business of losing money.

V/R
Shapley

this post made me really dizzy. you start off by talking of other players so I assume you're talking about poker, which is the only among player game I mentioned. if so, right, if a person with mediocre skills goes into a casino with an expectation of coming out richer, they do have a problem. of course I was referring to people who have top %20 skills. a person with mediocre buisness skills who goes into buisness with an expectation of coming out richer also has a problem, so this is not unoque to gambling.

your second paragraph must refer to games v. the casino, since there's no reason to bar any (non-cheating) poker player. a good poker player still pays the same amount of rake as any other player (and more because they tend to play more).

card counters in Blackjack tend to get barred, but sports bettors who exploit edges in the odds, and become non-self-weighting, don't get barred, because of the balancing in the odds they produce.
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Postby barfle » Fri Jul 21, 2006 3:11 pm

As with other forms of entertainment, I find classical music generally relaxing, uplifting, and a lot of fun. Same thing with a good baseball game or car race. Again, no wealth is created.

As far as the difference between investing and gambling (or speculating), when you do something like put $100 on the black in roulette, you are simply playing the odds. Your skills have no bearing on the outcome of the game. There are significantly better and worse bets in other games, but again, you don't really have much say in the outcome.

If you buy stocks, though, you usually have a say in the way the company is run. How much say depends on how much you own, of course, but picking existing stocks does give you a chance to help create wealth if you help guide the company's wealth building activities. And if you purchase stock in an IPO, you really are investing directly in the company, providing them with working capital to assist in their creation of wealth (we all hope). Of course, there's the old saying that every time you sell a stock, you believe it's going to go down in value, and you are looking for someone who thinks it's going to go up in value.

Speculating in futures looks to me like you're lending money to someone who expects to create wealth from your money - sort of a mortgage on the end product. Again, you assist them in their creation of wealth.

But there are speculation vehicles that are simply "playing the market," which seem like a zero-sum game. A few of my coworkers used to speculate in commodities, and when they realized that the only way to come out ahead is to be really lucky, or at least moderately clairvoyant, they decided their money was better spent on Celine Dion concerts.

One incredible rip-off I've run into (fortunately without spending any money) is rare coins. These have a guaranteed value from a government, a generally smaller intrinsic value from the materials in them, and a speculative value to collectors that could be just plain ridiculous. Again, no wealth is created, although some people may get rich taking advantage of suckers.
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Postby Shapley » Fri Jul 21, 2006 4:04 pm

*ignaf,

Sorry for the confusion. You only mentioned two games, Poker and Blackjack, by name, and then referred to 'betting strategies for other games'. I've only played Blackjack once, so I don't recall the details of how the game progresses, but it is the game I referred to when talking of 'card counters'. The casino entered the business knowing that the odds were decidedly in their favour. If a player develops a tendency to tilt the odds, they will be excluded from play. Exploiting edges in the odds is not the same as tilting the odds, IMHO. If a particular horse runs better on rainy days or a sports team's star player winds up on the injured list, that will tilt the odds, and it is normal to take advantage of the situation (although I can't understand why 'insider trading' isn't viewed the same way). A card counter, by virtue of knowing the composition of the shoe, has an advantage over the regular player and, worse, over the house. Since the house sets the rules, the house generally determines that such an advantage is unfair, and disallows that player from competing. I think the difference lies in the fact that the former does not create a lasting advantage, while the latter does.

I did not draw a distinction between playing against other players or playing against the casino when discussing gambling, since we have been talking about the 'wealth creation' aspects of the game, not the specifics of the varieties of play. I mentioned ealier that the monies that enter the arena, whether it is in the basement of your house or the poker room of a casino, remain fixed in amount. The amount that leaves the table at the end of play is the same as the amount the entered the table, there is no wealth creation. This is why I say there is a problem, There will be no net gain in wealth, only a redistribution of it. Even professional gamblers lose now and again, either to more highly skilled players or to a poor turn of the cards.

As BigJon points out, this is different from market forces, as it is possible for all 'players' to win, although the law of averages ensures that this rarely happens. Commodities, stocks, and other market issues are not a 'zero sum game', as is the closed system of the gambling table.

I can see why this may make one dizzy. I'm still trying to tie each post to the overall topic of the board, sometimes unsuccessfully, rather than limiting my answers to the specifics of the previous post. My most humble apologies if this causes confusion.

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Postby Serenity » Fri Jul 21, 2006 4:08 pm

Liam? Is that you?




(Quit hoggin' the board Shap) :D
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Postby GreatCarouser » Fri Jul 21, 2006 4:24 pm

Shapley wrote:
bignaf wrote:only if they're playing self-weighting games. if they use skill to minimize the impact of luck (as in poker, Blackjack, and some betting strategies in other games), they don't necesarilly have a problem.


Not entirely true. They still have to deal with the skill of the other players. If they are fortunate enough to sit at a table with a number of players of lesser skill, then their odds are improved. If they are seated at a table with players of equal or greater skill, their odds are diminished. All in all, when you come down to it, skill and daring are no match for an unlucky deal of the cards.

Besides which, casinos routinely bar those who show a propensity for weighting things too heavily to their advantage, such as card counters. Casinos are not in the business of losing money.

V/R
Shapley


I agree with both of you here. Let's talk poker because there is no 'house edge' and you don't have to worry about being barred for winning as long as you don't cheat ; you play against the other players and the house takes a fee from each pot (rake) to cover it's expenses or each player pays a fee every 30 minutes or so. The last system is virtually non-existent in Southern California. If you are the tenth best player in the world but are at a table with the top nine your expectation is lousy, but if you're at the table with 8 of the top nine and one 'bad player' your expectation rises exponentially. If there are two bad players the other eight 'good players' may all expect to make money.

Professional poker players understand that a great deal of their edge comes from taking a 'long term' attitude...probability theory says there are no 'lucky seats' for example, but even though when you flip a coin the chances of it landing 'heads' is 50% regardless of how many times it has landed 'heads' previously, you may get a long run of 'heads' or a long run of 'tails'. This doesn't mean that if someone is offering you 2:1 on the coinflip and won't quit until you do that you are wrong to continue even if you lose a great number of times in a row. As long as you have the bankroll, probability says you will come out well ahead in the long run. From a purely monetary point of view it would be a great error to stop as you make 1/2 a unit on every bet regardless of the 'result' until you stop.

Professionals understand that they will not win every pot, session, week, etc.. They make money by finding and exploiting situations where they have an 'edge'. In the popular variation of poker known as Texas Hold'em the very best starting hand is AA. It is no worse than a 7:3 favorite against any other starting hand other than the other AA in the deck. Most of the time it is a 4:1 favorite. If you get AA and you fold it for some reason before the 'flop' you are making a huge error because you have lost all your equity when you had the best hand. Professionals understand that this is a favorable time to bet. It is even favorable to bet if you are at a ten-handed table and everyone else bets because even though you are only a 30% favorite to beat the other nine players you are so far ahead of each of them pre-flop (none of them are even 10%) that probability says it would be a greater mistake to fold than to take that chance. While the concept of 'finding and exploiting positive expected value situations is simple the execution is another matter. That is some of what makes poker so fascinating to many and so difficult to master. Great poker players embrace the randomness of luck and then try to use their knowledge of 'correct' play to minimize its impact.
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Postby piqaboo » Fri Jul 21, 2006 4:34 pm

BigJon, you're getting a little nasty-edged in your discussion. I'd not call you on it, except you've called a few folks in that arena yourself, opening yourself up to a return of serve.

"Your analogy is busted beyond repair, because you have apparently been trained by the very folks who want to take your money"


"does your hatred of the free market system make you incapable"

On another topic -
Why do you find dictionary.com to be an invalid source of definitions?

Back to gambling:
anyone thought of buying puts? Care to differentiate them from anteing into the pot? Care to explain how they create wealth? I can see an argument that buying stock in Pfizer helps PFizer pay for the next round of drug development and manufacture, hence creating wealth, but buying the right to make money if the stock value of a company drops seems completely unlinked from creating wealth as BigJon and Shap have been defining it.
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Postby Shapley » Fri Jul 21, 2006 4:47 pm

Piq,

I'm not really familiar with the concept. Looks like I'll have to do some Googling. :roll:

V/R
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Postby BenODen » Fri Jul 21, 2006 4:52 pm

I'd like to join in on the "Stock investing is similar to collecting" side. Your stock is worth the current price only if you can find someone to buy it from you. I guess the bit I think is most crazy is the assertion that the value of a company is the sum total of a company's stock. When something happens like the Internet bubble burst in 2000, everyone decides that they'd like to risk a little less than they do, and they invest less in the stock market in general. Suddenly the 'value' of all companies on the stock market takes a dive. Did the earning forecast of all those companies suddenly go down? No, not exactly. Did their assets go down in worth? Yeah, I suppose to some extent they did.. But the tangible assets of a company are a fraction of it's purchase price aren't they?

Is collecting gambling? To some extent, yeah, but it has a much more continuous earnings curve. Baseball cards are probably the most like the stock market, I think. A player's career and card value builds gradually with time and 'success.' Tangibles and intangibles both factor in, just like in the stock market. How nice of a guy is he? Does he have good stats? When MLB has a strike going on, or even a strike looming, I imagine that baseball card prices go down over all.. The only thing that collectables don't have that the stock market does is dividends. Also, there's no trading on companies that have quit the business like rare collectables or cards by favorite ex-players. But on the other hand, stats are very limited in Business. "How much have the sold?" "How much are they growing?" "What's their debt?" "How much profit do they make?" "How much money do they pay to their trading card holders?" "Did they pull any surprises lately?" And then there's the Analyst factor, what's the buzz?

Over all, it seems like a lot of movement comes from how the investors feel a the time. Are they feeling stingy? Gypped? Jilted? Happy? Seems like a crazy way to throw around money, since investors' thoughts can turn on a dime and effect the whole system... Now is it gambling? No, because there's no house that gets your money except for brokers (who contribute their expertise, but then don't dealers too?) and when there's an offering of stock directly from the company, but even then, those people aren't the ones doing the payoffs. Ohman, I could go on here, how the company gets our money and promises to pay typically at most ten cents on the dollar anually to its stockholders, and how crazy that gambit is... Anyways, I'll stop.. This isn't to say I don't invest in the stock market; I'm just saying the sytem has enough quirks and crazyness to make my head spin...
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Postby BigJon@Work » Fri Jul 21, 2006 4:58 pm

Shapley wrote: As BigJon points out, this is different from market forces, as it is possible for all 'players' to win, although the law of averages ensures that this rarely happens.

You are a little off here Shap. The law of averages only says how many investors will get better returns than the market average. It says nothing about the percentage of people who will get a return on their investment, which can be anywhere from 0 to 100%
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