PIMCO’s Mohamed El-Erian has said that the Federal Reserve, which is constantly lambasted for making all the wrong decisions, can’t fix the U.S. economy on its own.
[credit provider=”Flickr” url=”http://www.flickr.com/photos/kurmis/178625914/”] People really freaked out last Friday when it was reported that German factory orders plunged 4.8% in November, which was much worse than the 1.8% decline expected. This is concerning since Germany, the largest economy in Europe, is also considered to be in the best economic shape […]
The U.S. got some good news from this morning from the BLS, who told us that American business added 200k nonfarm payrolls and the unemployment rate fell to 8.5%.
[credit provider=”Wikimedia COmmons” url=”http://commons.wikimedia.org/wiki/File:Huevo_Quebrado.jpg”] European markets in Spain and Italy tanked today, hit by negative headlines from all sides. The German DAX, British FTSE 100, and French CAC limped along, weighed down by the periphery.Last month’s optimism seems to have vanished since the start of 2012.
Those of us who traded Foreign Exchange in the early 90s will have noticed something familiar today. A country is attempting to fend off a speculative attack on its currency by raising interest rates. Hungary, on the edge of the Euro-zone and its current recession, is expecting barely positive GDP […]
[credit provider=”AP/Michel Euler, Pool”] Reuters reports (via ForexLive) that Italian PM Mario Monti is flying to Brussels unexpectedly, and his office is giving no details about who he’s going to meet or what he will while in the European capitol.News of his sudden trip coincided with a momentary drop in […]
Think it’s improbable that anyone is worried about Hungary?
[credit provider=”Getty Images”] Inquiring minds might be wondering what is the best way forward for Greece. To some extent, the question is akin to asking “would you prefer to lose a one hand and one eye or your left leg?” I have been thinking about the Greece “least bad” question […]
With a new centre-right government making its first strides towards controlling its debts and reviving its banking system, Spain is once again returning to the headlines.
Yesterday, Reuters reported Greeks and Italians had begun taking their money out of banks and putting it in safe-deposit boxes. One banker said he’d seen a five-fold increase in deposit box rentals.
[credit provider=”NASA” url=”http://earthobservatory.nasa.gov/IOTD/view.php?id=981″] The last half of 2011 was dominated by ever more grim news from Europe. But will 2012 be the same?The eurozone sovereign debt crisis has escalated, but recent moves by the European Central Bank have calmed that angst for now. However, analysts have waxed sceptical that these […]
[credit provider=”www.planetofsuccess.com via photosteve101 on Flickr” url=”http://www.planetofsuccess.com/”] The European Central Bank can actually solve the governance problems that got Europeans into this mess virtually immediately and without treaty change, Geneva-based economist Charles Wyplosz writes in a column out this morning on Wall Street Pit.In fact, the whole idea that EU […]
[credit provider=”AP/Remy de la Mauviniere”] Not much of a “happy new year” in Europe … From the Financial Times: Europe’s leaders warn of tough 2012 … Nicolas Sarkozy, president of France, said the gravest crisis Europe has faced since the second world war “is not over” and Angela Merkel, German […]
[credit provider=”HUD” url=”http://commons.wikimedia.org/wiki/File:Pruitt-Igoe-collapses.jpg”] The euro just celebrated its 10th birthday.But that birthday celebration came with little fanfare as the currency bloc continues to struggle to work out its debt debacle.
MADRID (AP) — Spain’s deficit for 2011 could be even higher than the larger-than-forecast 8 per cent of GDP it announced last week, the finance minister of the new conservative government said Monday.
[credit provider=”Valerie Everett on Flickr” url=”http://www.flickr.com/photos/valeriebb/4633606752/”] These days, the news about Europe seems garbled by a lengthy list of acronyms and abbreviations, and it’s hard to keep track of which is which.So let’s set that straight. Here we give you your ultimate guide to the most important European institutions.
[credit provider=”Simone Foxman for Business Insider and studio dummies on Flickr” url=”http://www.flickr.com/photos/studiomuscle/56876565/#/”] The market still seems to be moving to every headline out of the eurozone, but it’s hard to remember what’s important.So let’s bring this back into perspective.
PIMCO’s Mohamed El-Erian takes aim at the International Monetary Fund’s cowardice in a column published this morning in the Financial Times.
[credit provider=”Steve Hodgson on Flickr” url=”http://www.flickr.com/photos/craiglea/6032968014/#/”] As the news cycle winds down for the year, it remains clear to investors that the eurozone crisis is far from over.After action by the European Central Bank last week to shore up bank liquidity, investor sentiment has soured. Banks are storing a record […]
[credit provider=”rockwilda via Flickr” url=”http://www.flickr.com/photos/rockwilda/2283715897/”] Reuters reports that Germany is now seeking to channel remaining money available as part of EU structural aid funds into a separate fund to stimulate growth in struggling European sovereigns.That report cites an anonymous source within the German government, who says that Germans will attempt […]
Note: Nobody knows what is going to happen in the next year, let alone in the next three years. What follows is the theory behind the European Politicians losing the currency chess game.
A new poll from Gallup shows that in 2010 and 2011, adults around the world were twice as likely to approve than disapprove of the EU leadership’s job performance — despite the impending meltdown and the petty arguments coming with it:
MADRID (AP) — Spain will slide back into recession early next year with the current quarter and the first of 2012 both registering negative growth, new Economy Minister Luis de Guindos said Monday.
Mixed response to ECB’s €489bn lending operation The response to the ECB’s €489bn long term lending operation continues to be mixed, despite the level of funding requested exceeding expectations. After an initial boost yesterday, markets stagnated and borrowing costs for struggling eurozone countries moved higher. Of the €489bn only €200bn […]
[credit provider=”Travis Seitler” url=”http://www.flickr.com/photos/travisseitler/3490966831/sizes/m/in/photostream/”] As 2011 draws to a close, everyone’s wondering if the eurozone will be able to make it through 2012 in one piece.Downside risks menace from two sides.
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:EUR_5_holographic_band.jpg”] Early today 523 banks requested an unprecedented €489 billion ($640 billion) in super-cheap funding from the European Central Bank.But the massive lending operation has garnered only a tepid response from markets, with short-term government bond yields rising in Italy and Spain, and markets virtually unchanged on […]
Bond yields are rising across the euro area, but the biggest shift is taking place in short-term Italian and Spanish bonds.
One of the biggest things journalists who’ve shouted, “The crisis is over!” or even, “We’ve turned a corner,” have pointed to falling yields on Spanish two-year bonds. But this joyous yell paints over one important fact.
[credit provider=”Steve Jurvetson on Flickr” url=”http://www.flickr.com/photos/jurvetson/2903330985/”] European markets drove higher today, with investors hoping that the European Central Bank’s bank funding operation tomorrow will prove a turning point in the eurozone crisis.DAX: +3.06%
[credit provider=”Daniel Goodman / Business Insider”] All eyes will be focused on Europe tomorrow, when the European Central Bank publishes statistics about a new, 3-year bank funding operation (LTRO) meant to ease liquidity for the banks.Bulls have been hoping that this funding operation will amount to a back-door bailout vis […]
[credit provider=”Bloomberg” url=”http://www.bloomberg.com/apps/quote?ticker=GBTPGR3:IND”] For a few days after the historic (smoke and mirrors) Euro-summit a couple of weeks ago, it appeared the Euro-crisis had been solved.
[credit provider=”Milos Bicanski / Getty”] EU leaders are dithering over a plan to save the eurozone, as Greece edges closer to the brink of default.The country continues to struggle with a massive debt burden and will do so for the foreseeable future, despite the fact that private investors will likely […]
Think tank Open Europe’s Raoul Ruparel is the latest economist to denigrate ideas that the European Central Bank has introduced some kind of back-door bailout with its new liquidity support measures.
[credit provider=”Pawelmorski” url=”http://twitter.com/Pawelmorski/statuses/144887543933042688″] EU finance ministers will finalise plans to get as much as €200 billion ($261 billion) in aid from the IMF when they speak in a conference call at 9:30 AM ET today, according to Bloomberg.They’ll try to impose a deadline for contributions and passage of budget rules […]
[credit provider=”Qfamily on Flickr” url=”http://www.flickr.com/photos/dasqfamily/1455144539/”] Speculation that the European Central Bank may already have solved the sovereign debt crisis is all the rage today, but jubilation over the new measures is short-sighted.While the ECB’s liquidity support measures may indeed slow the momentum of the crisis significantly, they still do nothing […]
Europe is a crazy game right now. So crazy in fact, that even Goldman has recommended that traders just avoid it all-together.
Everyone’s chattering over whether the European Central Bank has actually introduced a back-door policy that will essentially allow banks to bail out Europe.
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Forestfire2.jpg”] Progress made in last week’s meeting of the European Central Bank and at the summit of EU leaders was “material,” however at the end of the day, nothing has been implemented and nothing has really changed.While EU leaders are clearly working towards a more sustainable euro […]
[credit provider=”flickr user: Contando Estrelas” url=”http://www.flickr.com/photos/elentir/3492248208/sizes/o/in/photostream/”] BRUSSELS (AP) — Russia, hoping to keep its largest export market from collapsing, will give at least $10 billion to the International Monetary Fund to help support the struggling euro currency, an aide to President Dmitry Medvedev said Thursday.Russian officials have said in the […]
[credit provider=”Frank Mulliez/ Fotopedia” url=”http://www.fotopedia.com/ios/above_france”] Although a French official told WSJ that S&P has not yet informed the French government about its rating intentions, market chatter is still all about when—not if—France will lose its prized AAA rating.But there are more hurdles facing France right now than just its credit […]
Date: December 14, 2011 Reporting From: London, England
Hedge funder John Paulson has something in common with Europe — they’ve both had a rough year.
Fed Chairman Ben Bernanke will brief Senate Republicans on the Eurozone crisis today, a Republican aide confirmed.
The eurozone debt crisis has been capturing more than market headlines recently, and now even the Federal Open Market Committee appears to be pinpointing Europe as the only thing that can derail the U.S. economy right now.
True, Italy’s debt-to-GDP ratio is a ridiculous 120% and true, it has the third-largest economy in the eurozone, but that’s not the real reason everyone’s worried that Italy could bring down the eurozone.
[credit provider=”AP” url=”http://www.apimages.com/OneUp.aspx?st=k&kw=ireland%20jobs&showact=results&sort=relevance&intv=None&sh=10&kwstyle=and&adte=1316543303&pagez=60&cfasstyle=AND&rids=db2ea9ec15df4f87a6af2ef9ef31e88d&dbm=PY2010&page=1&xslt=1&mediatype=Photo”] IRELAND’S POTENTIAL REFERENDUM on whether to ratify last week’s European financial treaty will be tantamount to a vote on whether Ireland wishes to remain in the eurozone, finance minister Michael Noonan has said.The minister for finance, speaking in London in advance of a meeting with chancellor George […]
It’s hard to avoid the daily updates on the crisis in Europe. The financial troubles once concentrated in Greece and Ireland have broadened in scope, raising deeper questions and prompting gloomy predictions. Some wonder whether the euro can survive. Others think it will, but only at the cost of deep […]
In a new note this morning, Deutsche Bank’s Jim Reid argues that “austerity is making it harder for countries to grow out of their debt burden,” comparing the current measures to those which stalled economic recovery during the Great Depression.
Nomura’s Richard Koo has been making noise lately about this off-the-wall idea to fix the eurozone crisis: only allow nationals to buy a sovereign bonds.
I spent a few days in London last week, meeting with investors and discussing my book. I also managed three separate TV appearances. I can tell you that if the € sovereign debt crisis appears to dominate the news in the U.S., it is an all-consuming obsession for the financial […]
[credit provider=”Fricke_K on Flickr” url=”http://www.flickr.com/photos/[email protected]
/3082884774/sizes/l/in/photostream/”] EU leaders made progress on their summit on Friday but their aversion to an “immediate comprehensive solution” is going to kill the European economy, Fitch Ratings opines in a new report out today.Eventually, EU leaders are still going have to give in and expand the […]
[credit provider=”www.cr.nps.gov” url=”http://www.cr.nps.gov/history/online_books/fauna5/faunat.htm”] The Organisation for Economic Co-operation and Development (OECD) will soon publish a report that says its constituent governments’ gross borrowing needs will be around $10.4 trillion in 2012, reports David Oakley of the Financial Times.However, the primary concern is not the size of the borrowing, which was […]
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:ThinkingMan_Rodin.jpg”] NEW YORK (AP) — The financial world initially rejoiced Friday when word came of a deal by most European countries — including all 17 that use the euro — to allow the European Commission to oversee national budgets and impose penalties if a country’s debt grows […]
[credit provider=”nicolafchild on Flickr” url=”http://www.flickr.com/photos/[email protected]
/4008495663/”] The newest round of European Banking Authority tests of bank capital came out this week, and one thing is clear: everyone’s deleveraging, and fast.The EBA has told EU banks that they must raise a total of €114.69 ($153.31 billion) in quality capital to meet the […]
[credit provider=”ABC Video”] London-based think tank Open Europe details why their negative outlook for Europe hasn’t changed after the EU summit meetings Thursday and Friday, and why the legal battles ahead for the eurozone could overwhelm their policy response.In particular, take a look at their analysis of the U.K. increasingly […]
[credit provider=”Woodleywonderworks at Flickr” url=”http://www.flickr.com/photos/wwworks/2712985768/”] In Brussels, the Euro summit continues into a big day Friday.So far, EU leaders have agreed on some progress towards a “fiscal compact” that would take steps towards increased integration of the European Union on an economic level.
[credit provider=”AP/Michel Euler, Pool”] UPDATE: After a series of press conferences just now, EU leaders seem to be holding to the decisions made in the draft statement we outlined below.Initial market reaction appears negative in Europe, although U.S. futures don’t appear to have moved much.
Cameron wields veto over EU Treaty change as deal on the table was “not in Britain’s interest” As yesterday’s summit of EU leaders dragged late into the night, UK Prime Minister David Cameron vetoed an EU Treaty change intended to accommodate further fiscal integration between eurozone members, on the grounds […]
BRUSSELS (AP) — European Union leaders failed to get the bloc’s 27 members to back a change to the EU treaty and the 17 eurozone countries are now trying to reach their own accord, an EU official said Friday.
[credit provider=”YouTube”] It used to be the Greece, then it was the PIGs (Portugal, Ireland, and Greece), then it was the PIIGS (Portugal, Italy, Ireland, Greece, and Spain), and now it seems that the entirety of the eurozone is at risk.Right now, EU leaders are trying to agree on a […]
EU leaders have drawn up a draft of a plan to fix the euro at a summit today, but Germany disagrees with some of the plan’s main points according to Reuters.
[credit provider=”YouTube”] Let’s face the facts: the only plan that EU leaders are going to be able to agree to that would keep the eurozone together is eurobonds.German Chancellor Angela Merkel and French President Nicolas Sarkozy can say what they like about this being the wrong time for the jointly […]
[credit provider=”www.time.com” url=”http://www.time.com/time/covers/0,16641,20110822,00.html”] Disagreements about the European Stability Mechanism appears to be the latest squabble dividing EU leaders.Legal battles over the ESM—the permanent successor to the European Financial Stability Facility—have long been a cause of concern. This battle is escalating now that EU leaders seem to be banking on the […]
[credit provider=”AP/Riccardo De Luca”] European Central Bank President Mario Draghi spoke to reporters from Frankfurt today.He explained the ECB’s decision earlier today to cut interest rates by 25bps to 1.00%.
[credit provider=”Wikipedia” url=”http://upload.wikimedia.org/wikipedia/commons/f/f8/Printer_in_1568-ce.png”] As the eurozone debt crisis persists, one plan of action that hasn’t been completely pulled off the table is a break up of the eurozone, which would involve countries abandoning the euro.According to WSJ reporters David Enrich, Deborah Ball and Alistair MacDonald, at least one eurozone country’s […]
[credit provider=”NASA” url=”http://apod.nasa.gov/apod/astropix.html”] Standard & Poor’s ratings service just put the long-term rating of the European Union on “creditwatch negative.”With the eurozone accounting for 62% of the European Union’s budgeted revenues in 2011, it would seem that the greater, 27-state European Union is also vulnerable to the crisis.
Opinion polls and surveys are finding an increasing number of people expect one or more countries to leave the euro zone. Investors are anxious. What is to be done ? What makes this so difficult is that there are so many moving parts and possibilities. The way the question is […]
[credit provider=”e-magic on Flickr” url=”http://www.flickr.com/photos/emagic/56206100/sizes/l/in/photostream/”] Perhaps the biggest news out of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Monday was the announcement that they could pass a new treaty with the approval of only 17 eurozone nations, not the full 27 countries that are […]
[credit provider=”commons.wikimedia.org” url=”http://commons.wikimedia.org/wiki/File:Bar_bending.jpg”] The EU Summit begins in a little more than 24 hours and the signals coming from European officials are anything but encouraging.There are several areas of disagreement. It is simplistic just to cast this as a German vs France difference, but it does suffice to capture the fissure. […]
[credit provider=”US Navy” url=”http://www.navy.mil/management/photodb/photos/990707-N-6483G-001.jpg”] Europe may have a highly technical way to fast-track a “new fiscal compact” to control debts and deficits, according to a report by European Council President Herman Van Rompuy and obtained by FT blogger Joshua Chaffin.In fact, all such changes would require is unanimous approval of […]
[credit provider=”rheeks via flickr” url=”http://www.flickr.com/photos/[email protected]
/3602239579/sizes/o/in/photostream/”] The FT reports that EU leaders are considering permitting the temporary European Financial Stability Facility to continue running once the €500 billion ($670 billion) European Stability Mechanism—the EFSF’s permanent successor—gets up and running around the middle of next year.Continuance of the €440 billion ($590 billion) […]
We’ve found it folks—the perfect medicine for the struggling countries of the eurozone, provided for your amusement via ForexLive.
Yesterday German Chancellor Angela Merkel and French President Nicolas Sarkozy announced that they will eliminate certain provisions regarding private sector involvement from the European Stability Mechanism—the permanent successor to the European Financial Stability Facility.The European Central Bank is probably cheering as it has strongly opposed initiatives to make the private […]
[credit provider=”Markusram on flickr”] Nomura Global FX analysts are expecting a huge depreciation in the value of the euro against the dollar in the next four months, according to an investor note out yesterday.They argue that one euro will fall to just $1.20 within the next four months, compared to […]
Standard & Poor’s rating agency announced that the European Financial Stability Facility—the euro rescue fund—now has a negative outlook.
[credit provider=”Bloomberg TV” url=”http://www.bloomberg.com/video/80559810/”] Citi’s Chief Economist Willem Buiter is out with a new note, and it’s negative about the long-term prospects for European sovereigns like Italy, Spain, and Belgium—not to mention the already ailing Portugal, Ireland and Greece.However…
Yesterday, S&P went on a rampage and put 15 of 17 euro-zone countries on negative credit watch.
Standard & Poor’s decision to put 15 eurozone countries on downgrade watch threatens the fabric of programs that are meant to salvage the euro, in particular the European Financial Stability Facility (the euro rescue fund).
[credit provider=”Robosaurus” url=”http://www.robosaurus.com/2010/pages/slideshow.html”] Bombshell news that Standard & Poor’s ratings service was about to place all 17 countries of the eurozone on downgrade review—including the AAA-rated Germany, France, the Netherlands, Austria, Finland, and Luxembourg—stunned markets today.In total, 15 countries from the European Economic and Monetary Union were put on downgrade […]
[credit provider=”AP/Michel Euler, Pool”] Italy is pressing forward with a package of austerity reforms, including tax increases on the wealthy, a ban on cash transactions over $1,000 (to reduce tax evasion), and a fairly radical pension reform which will raise retirement ages and change the way that pensions are calculated […]
[credit provider=”Patrick Hoesly on Flickr” url=”http://www.flickr.com/photos/zooboing/4183279204/”] BREAKING: Bloomberg reports that all 17 eurozone countries will be put on downgrade watch today.S&P will allegedly release a statement on the move after the New York closing bell at 4 PM ET.
[credit provider=”AP/Remy de la Mauviniere”] French President Nicolas Sarkozy and German Chancellor Angela Merkel just finished a press conference on treaty changes that they hope will fix the big problems that threaten to tear the eurozone apart.While they really didn’t say anything unexpected, markets jumped and the Dow shot up […]
Markets are rallying amid optimism on hopes that EU leaders can make strides towards fixing the eurozone crisis.
Vice President Joe Biden met with Greek Prime Minister Lucas Papademos Monday, and said the United States will help the beleaguered country “in any way we can.”
[credit provider=”Wikimedia Commons” url=”http://en.wikipedia.org/wiki/File:2007_07_Belgium_Brussels_06_%28cropped%29.jpg”] After 535 days without a government, it appears Belgium has finally reached a deal that will see the two main parties form a coalition.Now let’s take a look back at what caused one of the strangest moments in modern European history — and how Belgian leaders […]
The European Central Bank will cut rates and take new non-standard measures to support bank funding, but there’s not going to be a big bazooka, writes Goldman Sachs economist Dirk Schumacher.
Well, TMM recently noted that they’re gaining faith in “Luck” and that new faith was rewarded yesterday. Despite getting the China PMI call wrong, TMM really didn’t care as the confluence of the PBoC’s RRR cut, a globally coordinated policy response and strong US data resulted in their being greeted by a […]
[credit provider=”NASA”] If you’re watching Europe, then the biggest date on your mind is probably December 9.That’s when EU leaders meet for their next big summit in Brussels. Investors and journalists appear convinced that this meeting will be a make-it-or-break-it moment for the euro area, and for three good reasons:
[credit provider=”John MacDougall / AFP / Getty”] Investors and journalists are harping on signs that the eurozone seems to move towards a final compromise, but many forget that Germany is still opposed to most of the solutions that would end the crisis, at least in the near term.Speaking in front […]
Bloomberg reports that a draft of a new plan to make sure private sectors take the hit for future bank failures will exclude long-term unsecured debt issued before 2013.
[credit provider=”en.wikipedia.org” url=”http://en.wikipedia.org/wiki/File:Deutsche_Mark(Gold-2001).jpg”] Sean Pignatell of Cowen International just put out a new note calling peripheral European debt “completely uninvestable” and predicting the end of the eurozone unless the European Central Bank makes a commitment to “unconditional and unlimited” intervention in the sovereign bond market.That’s because it is now impossible […]
[credit provider=”The White House” url=”http://www.flickr.com/photos/whitehouse/5640486489/in/set-72157626421975237/”] In public, President Barack Obama has kept his cool about Europe, rarely speaking out on the subject other than to encourage his counterparts across the Atlantic to act swiftly to stave off catastrophe. But privately, the FT’s Richard McGregor reports, Obama is in “morbid fear” of […]
[credit provider=” eggman via Flickr” url=”http://www.flickr.com/photos/eqqman/139573200/”] In a note out today, Standard Charter Chief Economist Gerard Lyon says that this crisis will bring an end to the euro as we know it.He argues that a “two-speed euro”—with different currencies for the core and the periphery—is the real way forward.
[credit provider=”Reuben Whitehouse on Flickr” url=”http://www.flickr.com/photos/rcktfld/2264092951/”] This is a new day for Europe.A failed German bond auction last week has spurred a turnaround in Europe, according to WJB Group Chief Market Strategist Brian Reynolds.
WSJ reports that EU leaders have come to an agreement on a coordinated plan to guarantee long-term bank debt, but it’s not as radical as some had hoped.
[credit provider=”www.flickr.com” url=”http://www.flickr.com/photos/rodimuspower/4295993935/”] EU Commissioner Olli Rehn, Eurogroup president Jean-Claude Juncker, and EFSF head Klaus Regling outlined their plans for leveraging the European Financial Stability Facility in a press conference after a meeting of eurozone finance ministers today.The officials appeared to make some concrete progress on plans to expand the firepower […]
The euro zone finance ministers meet today and tomorrow. Approval of the next tranche of aid to Greece and an agreement on EFSF leveraging is sought. Yet the real deal is still a week away and that is EU summit.
Morgan Stanley’s Global Economics Team led by Joachim Fels recently released their updated global economic outlook for 2012 and 2013.
[credit provider=”Wikipedia” url=”http://en.wikipedia.org/wiki/File:DeMilleTenCommandmentsDVDcover.jpg”] Last weekend, we wrote about how the Euro-crisis should be resolved: The same way all debts-that-can’t-be-repaid get resolved–via bankruptcy and restructuring.This is the simple, fair solution to the crisis, but of course no one is discussing it because it would involve “losses.”
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