Google Says Break Up Companies Too Big To Fail

HardOCP News

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So I am watching this interview with Google’s CEO and my jaw hit the floor when Schmidt says, among other things, you should break up companies or nationalize them when they become “too big to fail.” The CEO of Google advocating breaking up / nationalizing companies that become too big to fail?
 

Varsis

Limp Gawd
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Feb 13, 2003
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163
NOTHING is to big to fail,
That's how a capitalist system works people.
That's how the redistribution of wealth works...
big companies HAVE to fail eventually
 

heatlesssun

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NOTHING is to big to fail,
That's how a capitalist system works people.
That's how the redistribution of wealth works...
big companies HAVE to fail eventually

It's not a matter of too big to fail, its the amount of collateral damage that accompanies the failure.

I'm not a big believer in breaking up companies, the proper regulations would have nipped this problem in bud. And coming from the CEO of a company with the motto "We're here to rule the world" comes across as hypocritical.
 

Lebowski

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Well shit, I guess it's time for the government to take over google, because they are to big to fail. They're the biggest search engine on the planet. What will we do if google fails? We can't google for answers on Ask.com or live.com. It just wouldn't be the same. Google can not fail.
 

UrielDagda

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NOTHING is to big to fail,
That's how a capitalist system works people.
That's how the redistribution of wealth works...
big companies HAVE to fail eventually

Yeah, I'm sure millions of people who had no hand in this meltdown wouldn't mind becoming homeless and slowly starving to death to test out that theory.

Lets hope that this time we can get regulation in place that isn't eventually chipped away and torn down.
 

Mav451

Supreme [H]ardness
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NOTHING is to big to fail,
That's how a capitalist system works people.
That's how the redistribution of wealth works...
big companies HAVE to fail eventually

Yeah look at how great the redistribution of pain has been. And bailout money - everyone's getting that too right?

Oh wait...
 

eeyrjmr

[H]ardness Supreme
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NOTHING is to big to fail,
That's how a capitalist system works people.
That's how the redistribution of wealth works...
big companies HAVE to fail eventually

I don't think that is what he means. YES anything can fail, the recent financial bubble is proof enough of that.

And thats the point. A couple of these banks were soo big and powerful that if they had been allowed to collapse under their own incompetence (and in a 100% capitalist system they should have been allowed to die) the ENTIRE US economy (and also other country econ's) would have been decemated

IE such corporations became too big to be allowed to fail, and the recent bailouts echo this.

All this Google person is saying is that allowing a company to get soo big that their demise causes MASSIVE ripples to be felt.


And from that point of view I agree, a 100% capitalist system just doesn't work.
However, I expect Google *IF* they ever get soo big that their collapse would cause national/international problems that they volentarily split up
 

DrVal

Limp Gawd
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I don't think that is what he means. YES anything can fail, the recent financial bubble is proof enough of that.

Ah, but while the largest companies got us into this mess, they can't fail. They haven't failed.

Once you get large enough, If you do bad enough, instead of having to go bankrupt, you get free money! HURRAY!
 

syntx

Limp Gawd
Joined
Dec 28, 2005
Messages
394
Yo google motto is "do no evil".

There has to be some solution to companies that can trash your
entire economy if they fail.

It is not in the best interest of the people.

Extremist views are retarded. They don't work.

Everything must have a middle.

People who are capitalists to the max are dumbasses, which
can equally be said for socialists too.

The middle approach is the way to go.

Remember the goverment role is to protect and serve de people
interests. If a company can destroy a society because they fail
then the goverment (hence the people) fail.
 

Dreaz

[H]ard|Gawd
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Hypocritical or not, it's still a solution that should be explored considering the recent mess we are in. If things don't change in an appreciable way, it will happen again. There are still plenty of corporate giants who would argue they are too big to fail, and the banks are still in that category. Nothing has changed in that regard.

With companies breaking up, at least the consumer has choice and a single entity could never claim the resulting consequences of their bankruptcy would cause global havok. We don't need to worry about mega-corporations moving their HQs to other countries to get around the "breakup" idea because other countries already have such standards set. They don't allow corporations to get so much power; the US is unique in that regard and is most likely the sole cause of the current financial problem.
 

WhyYouLoveMe

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Yeah, I'm sure millions of people who had no hand in this meltdown wouldn't mind becoming homeless and slowly starving to death to test out that theory.

Lets hope that this time we can get regulation in place that isn't eventually chipped away and torn down.

You give the American people no credit.

For argument's sake, let's say you're talking about 5 million people. I'll go out on a limb and predict about 4,550,000 will find jobs. Those 4,550,000 will be forced to take care of the other 450,000 whether they wanted to or not.

I want to write more but I think we'll both agree that neither of us will change our belief or view of the American experiment. Game on!
 

HardOCP News

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I got a chuckle when he said (starting at the 53 second mark) that the administration cant get anyone approved because of this "obsessive thing about minor matters."

Hopefully he wasn't talking about all the tax evading stuff.





*unrelated, Schmidt needs to lay off the light blue mascara. Seriously..wtf?
 

Dreaz

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You give the American people no credit.

For argument's sake, let's say you're talking about 5 million people. I'll go out on a limb and predict about 4,550,000 will find jobs. Those 4,550,000 will be forced to take care of the other 450,000 whether they wanted to or not.

I want to write more but I think we'll both agree that neither of us will change our belief or view of the American experiment. Game on!

How about, 5 million will directly lose their jobs, 10 million will indirectly lose their jobs due to lower profit margins because of the 5 million and then 20 million will lose their jobs in order for companies to keep their profits high and expenses low. Making up numbers are fun, eh?

If there was no bail out, anyone who owed money anywhere would have felt the effects. That's more than 5 million. We're talking about a total confidence loss in US paper money. The effects of such a catastrophe are impossible to predict and you never want to experience.
 

WhyYouLoveMe

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How about, 5 million will directly lose their jobs, 10 million will indirectly lose their jobs due to lower profit margins because of the 5 million and then 20 million will lose their jobs in order for companies to keep their profits high and expenses low. Making up numbers are fun, eh?

If there was no bail out, anyone who owed money anywhere would have felt the effects. That's more than 5 million. We're talking about a total confidence loss in US paper money. The effects of such a catastrophe are impossible to predict and you never want to experience.

Good point. We won't have to experience the pain. Our children, grandchildren and great grandchildren will.

My "made up" numbers are directly from the unemployment rate.

"If there be trouble, let it be in my day so that my children may live in peace." Thomas Paine
 

eeyrjmr

[H]ardness Supreme
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I'll take 100% capitalism over any percentage of socialism/communism any day.
shame then america is going more socialist then :D:D:D:D

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/24/AR2009032401310.html?hpid=topnews
"The administration proposes legislation to give the U.S. government the same basic set of tools for addressing financial distress at non-banks as it has in the bank context."

He said this authority would allow the government to make loans to an institution, purchase its obligations or assets, assume or guarantee its liabilities and purchase an equity interest. As a conservator or receiver, he said, the government "would have additional powers to sell or transfer the assets or liabilities of the institution in question, renegotiate or repudiate the institution's contracts (including with its employees), and prevent certain financial contracts with the institution from being terminated on account of conservatorship or receivership."

The requested resolution authority would be modeled on that held by the Federal Deposit Insurance Corp. with respect to banks, he said.

Bernanke backed Geithner's request, telling the committee that the AIG crisis could have been avoided if the government had had the available tools in September.
 

iansilv

Limp Gawd
Joined
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Messages
335
NOTHING is to big to fail,
That's how a capitalist system works people.
That's how the redistribution of wealth works...
big companies HAVE to fail eventually

Yes! + like 72! WTF are people forgetting this? It's as though the fed gov is preserving class structureby not letting these careless companies fail.
 

aireyc

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The whole argument that 100% capitalism doesn't work is a bunch of garbage. 100% capitalism DOES work. What doesn't work is government interference in the markets plus lack of appropriate regulation. What's appropriate regulation? It's no different than the laws we have that say we can't steal and can't murder. Our current crisis is a result of government intervention, government entitlements, and lack of oversight. In law there's this concept when one side uses its power to make a one-sided contract, and such a contract may be deemed unconscionable. The mess we're in today is not from 100% capitalism or any branch of it, but just the opposite, or the equivalent of a ton of unconscionable contracts.

The term 100% capitalism doesn't mean everyone can cheat and steal their way to the top in a free market. It means there's no restrictions on what businesses can do, assuming said businesses act in an ethical manner. You can't steal money from everyone to make your monopoly; if you sell your desirable product at insane prices, that's fine as long as people pay. They don't pay? You go out of business. It's not rocket science. Remove the unethical corruption and enforce the laws, and capitalism works all the time. Sure, letting the companies that are "too big to fail" die off will mean catastrophe, but that catastrophe only shows you how much BS the government has put in place over the years to get us that far out of line. Under true capitalism it wouldn't have been possible to get to the state of "too big to fail" on the scale we're seeing today.

Remember folks, when this all started we had practically nothing in this country. If you build a 100 story building and it collapses, you're no worse off than when you started. Letting the companies fail means we will have to make sure the base is strong when we restart construction. Trying to patch the tower with band aids won't work, or we'll be spending far more on the band aids in the long run than had we just let it play out.

The only reason the government is able to force this nationalization is because of all the pansies who want instant gratification without the suffering. Whenever we get into a recession everyone acts like we need to do something to stimulate ourselves out of the problem so we get back on track faster. In a free market everything will recover over time; it may not be in a week or a month, but it'll recover. We've done this many times. Trying to force it through intervention may temporarily rectify the problem, but that overhead will build and build, and now we're just starting to see how deep in the hole we really are.
 

Mav451

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The whole argument that 100% capitalism doesn't work is a bunch of garbage. 100% capitalism DOES work. What doesn't work is government interference in the markets plus lack of appropriate regulation. What's appropriate regulation? It's no different than the laws we have that say we can't steal and can't murder. Our current crisis is a result of government intervention, government entitlements, and lack of oversight. In law there's this concept when one side uses its power to make a one-sided contract, and such a contract may be deemed unconscionable. The mess we're in today is not from 100% capitalism or any branch of it, but just the opposite, or the equivalent of a ton of unconscionable contracts.

The term 100% capitalism doesn't mean everyone can cheat and steal their way to the top in a free market. It means there's no restrictions on what businesses can do, assuming said businesses act in an ethical manner. You can't steal money from everyone to make your monopoly; if you sell your desirable product at insane prices, that's fine as long as people pay. They don't pay? You go out of business. It's not rocket science. Remove the unethical corruption and enforce the laws, and capitalism works all the time. Sure, letting the companies that are "too big to fail" die off will mean catastrophe, but that catastrophe only shows you how much BS the government has put in place over the years to get us that far out of line. Under true capitalism it wouldn't have been possible to get to the state of "too big to fail" on the scale we're seeing today.

Remember folks, when this all started we had practically nothing in this country. If you build a 100 story building and it collapses, you're no worse off than when you started. Letting the companies fail means we will have to make sure the base is strong when we restart construction. Trying to patch the tower with band aids won't work, or we'll be spending far more on the band aids in the long run than had we just let it play out.

The only reason the government is able to force this nationalization is because of all the pansies who want instant gratification without the suffering. Whenever we get into a recession everyone acts like we need to do something to stimulate ourselves out of the problem so we get back on track faster. In a free market everything will recover over time; it may not be in a week or a month, but it'll recover. We've done this many times. Trying to force it through intervention may temporarily rectify the problem, but that overhead will build and build, and now we're just starting to see how deep in the hole we really are.

There's really only one relevant line in your post. When EVERY SINGLE business consistently acts ethically, then we can talk about 100% capitalism. While we wait for an ethical utopia, let's return to reality here.
 

Decibel

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Ripped from Has Capitalism Failed? by Ron Paul

Capitalism should not be condemned, since we haven't had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It's not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!

To condemn free-market capitalism because of anything going on today makes no sense. There is no evidence that capitalism exists today. We are deeply involved in an interventionist-planned economy that allows major benefits to accrue to the politically connected of both political spectrums. One may condemn the fraud and the current system, but it must be called by its proper names – Keynesian inflationism, interventionism, and corporatism.

http://www.lewrockwell.com/paul/paul42.html
 

Rizen

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How about, 5 million will directly lose their jobs, 10 million will indirectly lose their jobs due to lower profit margins because of the 5 million and then 20 million will lose their jobs in order for companies to keep their profits high and expenses low. Making up numbers are fun, eh?

If there was no bail out, anyone who owed money anywhere would have felt the effects. That's more than 5 million. We're talking about a total confidence loss in US paper money. The effects of such a catastrophe are impossible to predict and you never want to experience.
I sometimes wonder if people actually believe the tripe they post on the internet.

A total confidence loss in US paper money? Yeah because dumping several trillion dollars of US currency into circulation out of thin air isn't going to do anything to the value of the US dollar internationally, right? A 10+ trillion dollar debt either?

Jesus Christ, stop posting.
 

Ravenous

Weaksauce
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Jun 7, 2005
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There's really only one relevant line in your post. When EVERY SINGLE business consistently acts ethically, then we can talk about 100% capitalism. While we wait for an ethical utopia, let's return to reality here.

Yea the reality of corrupt Government run by corrupt politicians overseeing corrupt business, that is so much better.
 

AFTFNJ

Limp Gawd
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People fail to realize that when they "nationalize" stuff the Fed R owns it & its private owners use it for there benefit & bill us via the FIR. NWO agenda continues unhindered..
 

AFTFNJ

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People fail to realize that when they "nationalize" stuff the Fed R owns it & its private owners use it for there benefit & bill us via the Federal Income Tax. NWO agenda continues unhindered..
 
Joined
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Messages
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Well shit, I guess it's time for the government to take over google, because they are to big to fail. They're the biggest search engine on the planet. What will we do if google fails? We can't google for answers on Ask.com or live.com. It just wouldn't be the same. Google can not fail.

I'm not a big believer in breaking up companies, the proper regulations would have nipped this problem in bud. And coming from the CEO of a company with the motto "We're here to rule the world" comes across as hypocritical.

I'm not so sure Schmidt is being hypocritical here. Google employs 20,000 employees and has assets totaling ~$30 billion.

General Electric, which is truly an example of a company that "can't fail," employs 320,000 people and has assets totaling $800 billion.

As of 2008, AIG employed 118,000 people and had assets worth $860 billion.

It is not about the providing of a service: capitalism's strength is its ability to replace defunct service quickly and efficiently. Given a year or two, the money that poured into other search engines if Google went tits up would result in the improvement of thoses services to near-Google levels.

It is about the destruction of wealth that is the concern. Capitalism cannot function with loss of capital. A company the size of AIG or GE drowning destroys a tremendous amount of capital spread out among employees and shareholders, which drags down the system.
 

Righty

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There's really only one relevant line in your post. When EVERY SINGLE business consistently acts ethically, then we can talk about 100% capitalism. While we wait for an ethical utopia, let's return to reality here.


Or everyone gets educated so these companies cant take advantage of them. This is another reason why we are in this mess. Lazyness.(Sure Ill sign this ARM loan for a 250k home when my household income is 50k..):(
 

Rizen

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There's really only one relevant line in your post. When EVERY SINGLE business consistently acts ethically, then we can talk about 100% capitalism. While we wait for an ethical utopia, let's return to reality here.
Someone else already pointed this out, but given how the government has fundamentally failed in our educational systems and in rationally handling international conflicts in recent years, why is everyone so apt to hand them the keys to the medical industry and the financial industry as well? Private industry works way more efficiently than the government ever will. Why? Because they have to.
 

OPUS1

[H]ard|Gawd
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Let's Reward failure
and
Punish success :<(
No one is responsible for themselves anyway!
 

nilepez

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Or everyone gets educated so these companies cant take advantage of them. This is another reason why we are in this mess. Lazyness.(Sure Ill sign this ARM loan for a 250k home when my household income is 50k..):(

And how would some person investing in a mutual fund that owns some company that bought a AAA bond that turned out to be a junk bond that was insured by a Credit Default Swap from Lehman Brothers, who's CDSs were offset with CDSs from AIG? Hell, how many people knew that AIG had become a defacto Hedge Fund?

There was absolutely no transparency. You want pure capitalism, then you have no regulation. You allow monopolies. You allow predatory pricing and leveraging your dominant business to acquire market share elsewhere.

Before the fed, the country relied on the uber rich, like JP Morgan and Carnegie pump the markets with cash when we had economic crises.

I don't like all the spending that's going on (especially since it does seem like we take all the risk and I'm uncertain if we'll reap the rewards, if they come to pass)....but doing nothing isn't an option either.

As for breaking up companies that are too big to fail, I think the real problem is that we allowed companies to buy other companies consolidate industries until they were too big to fail. Citi Bank sure seems like one of those.
 

jimmyb

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I can see his point.

If a company becomes so influential that the it's failure would be catastrophic for citizens of the entire country, then it might make sense for some control of the company to be handed to the citizens.
 

jctazzy

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At this point all I want is for an administration to pick a plan and stick with it.

Both the Bush and Obama administrations act like they're playing the role of a sideshow pitchman:

"Here's the big plan that will set things right!"
~ crowd (aka "the Street") thrashes the plan and continues to sell short, dismaying the administration

"Here's the bigger and better plan that costs twice as much and will set things right!"
~ some in the crowd take notice and buy what's being hawked then return to short selling and whining about how the current proposal leaves them no option

(Administration getting noticeably flustered now)
"Well, here's a new big plan that will give free money with no strings attached to the financial sector so they can make loans again!"
~ some in the crowd snap up a cheap mortgage then resume short selling

"Ok, we give up... we're going to give ridiculous sums of free money to private investors and we'll ask them nicely to use it to buy up the so-called toxic assets at fire sale prices while we assume all the risk if the assets decrease in value."

~relieved of responsibility for their previous actions the crowd perks up, uses the money for a short term buying spree so they can unload their previously worthless blue chips then resumes grumbling about how the government really should do more


Capitalism is like a whiny 4 year old... show them once that you'll step in for them and they will continue to push for more and more and more and more until you finally force them to accept what they have and make do with it. I'm not saying there's anything fundamentally wrong with that, it's just how it works. Give a little, get asked for more... over and over and over... until the spigot is turned off and they have to go search elsewhere for more.
 

Dreaz

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I sometimes wonder if people actually believe the tripe they post on the internet.

A total confidence loss in US paper money? Yeah because dumping several trillion dollars of US currency into circulation out of thin air isn't going to do anything to the value of the US dollar internationally, right? A 10+ trillion dollar debt either?

Jesus Christ, stop posting.

Stop being a douche.

A total lose in paper money is far greater than most forms of inflation (minus hyper-inflation see: Germany after WW1, which is just slightly better). Of course it's going to affect the world economy, no one is debating that anywhere. The debate stems from which is worse: letting the US economy completely fail within a decade, or bailing out/nationalizing organizations and try to turn the situation around. Of course neither case is optimal, but this is where America is now.

And it is that way now because of unregulated, unethical, capitalistic free markets.

The debates in this thread vary all over the place. 100% capitalism is a theory that doesn't exist in reality, just like 100% socialism is. Neither can exist in a world filled with people who will act like people. Therefore, trying to position an economy too far to one side of a theoretical, impossible model is doomed for failure. Completely free market capitalism doesn't, nor can it ever, exist. And if you try to make it exist, you'll just shoot yourself in the foot over and over again.
 

gathagan

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.....And it is that way now because of unregulated, unethical, capitalistic free markets.

I agree with most of what you say. That part, however, is not quite accurate.
The regulations that were in place were unenforced.
The agencies charged with oversight ignored both warnings and common sense.
The federal government at large got involved in the housing market in a way that created much of the environment that led to the current problem.

The businesses involved cannot be expected to behave themselves if the babysitters have left the room.
They will put their hands in the cookie jar.

Our politicians stopped working for anyone but themselves loooong ago.
Who ever promises the most gain (financial or political) gets the benefit of their efforts.

The group of people least able to deal with a free market economy's problems are the very ones we've allowed to take "control" of the situation.

Judas priest, Barney Frank has been in office since '81! Same with Chris Dodd.
They and others of their ilk, regardless of party affiliation, have spent the last 20+ years helping to create this mess.

They talk all around it and pretend that the same dimwits and political hacks that got us here in the 1st place are somehow the very individuals best qualified to fix it.
Never mind that half of the problem is due to these pinheads getting involved in the 1st place.

As much as I despise socialism, what makes me the angriest is that no one in our government is honest enough to fess up to what they are trying to do.... well, except for Rahm Emmanuel...
They're using a situation of their own making to take this country down a road that has failed again and again.

It's not a party thing.
If you read some of the stuff our founding fathers wrote, you'll see that they were quite clear on their view of public service.

The minute it becomes career, it all goes down the crapper....
 

Team Obi Juan

Your Local Postmaster
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Google doesn't even approach too big to fail. It's a fucking search engine and ad company first and foremost. It would be replaces in a day, by people typing in www.yahoo.com instead.


It would suck major dick to have to do that.
 
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