OTTAWA—The Harper government will bring in back-to-work legislation Monday to end the postal strike and get mail moving again.
Declaring that the two sides have had “ample amount of time” to reach a settlement, Labour Minister Lisa Raitt said she would force an end to the Canada Post labour dispute if necessary.
The government was preparing to introduce the legislation Monday afternoon though it could take several days to become law.
The move sparked an angry reaction from New Democrats who accused the Conservatives of meddling in collective bargaining loan for people with bad credit.
It’s possible NDP MPs could delay a legislated end to the dispute.
Interim Liberal Leader Bob Rae accused the Conservatives of doing little to safeguard defined benefit pensions, one of the issues at the heart of the Canada Post dispute.
The marriage of square burgers and roast beef sandwiches is about to end.
Wendy’s/Arby’s Group said Monday that it will sell a majority stake in its struggling Arby’s brand to Roark Capital Group, the Atlanta private equity firm. The move marks the end of a short-lived union between the two fast-food chains, and represents a role reversal. Arby’s started as the suitor in the relationship, and ended up on the chopping block.
In an interview with the Associated Press, Wendy’s/Arby’s Group CEO Roland Smith said that the combination of the two fast-food chains in 2008 had “absolutely not” been a failure.
“I think that at the time we put the two brands together it was the exact right thing to do,” Smith said, “but any business that continues to do well and perform has to be nimble and adapt to what the market is.”
Wendy’s/Arby’s shares rose 19 cents, or 4 percent, to $4.71 in morning trading.
Roark, which already owns Moe’s Southwest Grill, Cinnabon and other restaurants, will pay $130 million in cash for an 81.5 percent stake in Arby’s. It will also assume $190 million worth of Arby’s debt.
Smith said Wendy’s/Arby’s had entertained offers from “quite a number” of bidders, but declined to give details. He said that the company’s decision to keep an 18.5 percent stake in Arby’s should signal its confidence in Arby’s future.
Smith is a veteran of the Arby’s side, having served as CEO of Arby’s Inc. from 1997 to 1999 and again starting in 2006. He has been CEO of the combined Wendy’s and Arby’s since it was formed in September 2008. He said that selling Arby’s was “a little bittersweet.”
Smith will receive a cash bonus of $350,000 when the sale goes through, and general counsel Nils Okeson will receive a bonus of $100,000, according to regulatory filings.
Smith said in the interview that he didn’t think employees would be bothered by the bonuses.
“I would say that the folks in our company understand clearly how compensation works, and it is a very typical (bonus) that would come up any time we go through a change in our organization,” he said. “I quite honestly don’t think anyone’s going to focus on it.”
Wendy’s/Arby’s will change its name after the sale is completed. Spokesman Bob Bertini said the company is considering options, and the new name will include the word “Wendy’s.”
Wendy’s/Arby’s Group will also get a tax benefit worth $80 million related to the sale, which Bertini described as an “offset to taxable income.”
Wendy’s and Arby’s first came together when billionaire investor Nelson Peltz and his Triarc hedge fund, which already owned Arby’s, agreed to scoop up Wendy’s as well. Peltz remains involved as the company’s chairman. Smith said Peltz is “a tough taskmaster, but he’s fair,” and said they have a “very, very solid relationship.”
Atlanta-based Wendy’s/Arby’s Group has struggled since its formation in late 2008, the depths of the recession, losing money for seven of its 10 quarters. In January, the company said it would consider selling Arby’s in order to focus on Wendy’s, which it hopes to expand by launching breakfast in more locations and by opening more restaurants overseas.
Wendy’s has about twice as many restaurants _ 6,500 to Arby’s 3,600 _ and represents about 70 percent of the company’s revenue. However, in the first quarter, Arby’s seemed like the stronger player by some measures. Its revenue rose by 5 percent, while Wendy’s revenue fell less than 1 percent, though some of Arby’s performance was likely due to sale prices.
The sale is expected to close in the third quarter, which starts in July. Roark managing partner Neal Aronson said in a statement that Roark looks forward to helping Arby’s “great brand achieve its full potential.”
Turning up the pressure, Canada Post announces it is moving to three times a week delivery in most cities because rotating strikes have slashed mail volumes in half.
As Canada Post made its announcement curbing service, the Canadian Union of Postal Workers announced rotating strikes across Canada in small communities beginning at 11:30 pm EDT.
The walkouts will affect four locations in Ontario: Thunder Bay, Hearst, Brantford and St. Thomas. As well, workers are off the job in Labrador City, Labrador; Acadie-Bathurst, New Brunswick; Summerside, P.E.I.; Ste.Therese, Quebec; Ste Jerome, Quebec; Flin Flon, Manitoba; Yellowknife, Northwest Territories; Whitehorse, Yukon; and Vernon, B.C.
Canada Post said home delivery will continue on Thursday, but starting next week, most people who are served by mail carriers will only get delivery of letters, ad mail and small parcels on Monday, Wednesday and Friday.
Large parcels and priority mail will continue to be delivered on a five-day a week basis.
“Our volumes have dropped off the cliff,” said Canada Post spokesman Jon Hamilton, saying the company must contain costs as revenues are falling. “The union’s rotating strikes are having a profound impact.”
Canada Post estimates that instead of delivering its usual 40 million items a day, it’s only about 20 million.
“We need to maintain and create good jobs, not cut back on jobs in our communities,” said Denis Lemelin, CUPW National President and chief negotiator, said in a news release high quality business cards. “Smaller communities also benefit from having access to increased services at their post offices. We are asking Canada Post to address these demands.”
Employees will only be paid for the hours they work. Staffing at mail processing plants will also be adjusted to deal with falling volumes.
Post office operating hours and access to post office boxes will be unchanged. Pickups from street letter boxes on major streets will continue as usual.
Canadians who live in rural Canada will continue with daily service because their carriers are covered by a separate contract.
The strike by the Canadian Union of Postal Workers began Friday, with 24- to 48-hour shutdowns across the country. The rotating strikes began in Calgary and Edmonton overnight, after walkouts in Winnipeg, Hamilton, Montreal, Victoria and Moncton.
The union has not hit the Toronto area yet, which includes two of the country’s busiest processing plants, the mail sorting facility on Eastern Ave. and the parcel sorting facility in Mississauga.
It has not ruled out a full nationwide strike at some point, but with rotating strikes, most employees have been able to draw a paycheque. The company’s latest move means their wages will shrink.
Talks are continuing at an Ottawa hotel, but Canada Post said little progress was being made.
The Canadian Union of Postal Workers was not immediately available for a response.
Russia’s central bank unexpectedly raised its overnight deposit rate, signaling it may refrain from tightening monetary policy again as price pressures ebb and the economic recovery remains shaky.
Bank Rossii raised the fixed overnight deposit rate to 3.5 percent from 3.25 percent, effective May 31, the fourth increase since December, the Moscow-based central bank said today in an e-mailed statement. Nine of 20 economists in a Bloomberg survey predicted the move. The refinancing rate and overnight auction- based repurchase rates were left at 8.25 percent and 5.50 percent, in line with economists’ expectations.
Chairman Sergey Ignatiev is trying to keep inflation between 6 percent and 7 percent without stifling credit flows and undermining an economic recovery in the world’s biggest energy supplier. The inflation rate is now “in order” and the bank will be “very cautious” in raising borrowing costs to “avoid hurting economic growth,” Ignatiev said May 26.
Today’s increase and earlier measures “provide an acceptable balance between the risks of continued inflationary pressure and slowing economic growth for the nearest months,” the central bank said.
Ruble Weakens
Policy makers left mandatory reserve ratios unchanged for a second month after lifting them in January, February and March. Economists expect Bank Rossii to resume increases in the second half of the year, according to the median of 12 forecasts in a Bloomberg survey.
The ruble erased gains after advancing on the decision and was 0.1 percent lower against the dollar at 28.0850 at 5:40 p.m. in Moscow. Russia’s ruble bonds due March 2014 slid for the first time in three days, pushing the yield 3 basis points higher to 6.59 percent.
The Micex Index of 30 stocks added to gains after the announcement and was up 0.3 percent at 1,642.13 at 4:42 p.m.
“It’s a signal for the market that the central bank continues to be watching inflation, and that it potentially intends to tighten policy if economic growth firms and consumers proceed with their current behavior of lower savings and higher borrowing,” Dmitry Polevoy, chief economist for Russia and Kazakhstan at ING Groep in Moscow, said by telephone.
Slowest Growing
The slowest-growing economy among the so-called BRIC nations, Russia is relying on revenue from oil to bolster its recovery, while seeking ways to reduce its reliance on energy exports. Oil at more than $100 a barrel is no longer stoking economic expansion, which slowed to 4.1 percent in the first quarter from 4.5 percent in the fourth. Growth slid further in April, to 3 on line pay day loans.3 percent, the Economy Ministry said May 26.
The economy will expand 4.5 percent next year, compared with 9.1 percent for China and 7.8 percent for India, the International Monetary Fund forecast in April.
The pace of inflation has shown signs of steadying. Consumer-price growth in May will probably match the rate from the same month last year, when prices gained a monthly 0.5 percent, Ignatiev said May 26. The annual rate in April matched an 18-month high of 9.6 percent and reached 9.7 percent as of May 23, the central bank said today.
Consumer price growth “remains relatively low” in monthly terms, policy makers said in the statement. Food-price growth has slowed as the knock-on effects from last year’s drought, the country’s worst in 50 years, eased, the bank added.
Grain Ban Lifted
A ban on grain exports introduced as a result of the drought will be allowed to expire July 1, representing the “only serious, significant risk factor” for inflation, Ignatiev said today, the RIA Novosti news service reported.
Russian grain prices are now about half global levels, First Deputy Prime Minister Viktor Zubkov said in a meeting with Prime Minister Vladimir Putin May 28.
Unlike their counterparts in Brazil, China and India, Russian policy makers preferred currency gains and higher reserve requirements for lenders as inflation-fighting tools to help fledgling growth. The ruble has gained 9 percent so far this year after the bank relaxed currency controls.
Elections
With parliamentary elections at the end of the year and presidential elections in early 2012, policy makers will probably step up their inflation-fighting rhetoric and revive efforts to meet this year’s price goal, according to Timothy Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London.
Previously the central bank “put a greater weight on growth, but with signs the population is becoming increasingly sensitive to the impact of inflation on real disposable incomes, and with opinion polls showing a dip in support for the ruling elites, controlling inflation is also center stage,” Ash wrote in a note e-mailed on May 26.
The central bank cited high unemployment, slowing industrial production growth, and an “extremely low” level of investment as key risks to growth. Consumers are borrowing and spending more while saving less, which could boost economic growth and inflation, it said.
This Memorial Day weekend Americans will be skipping the souvenir tee-shirt.
More travelers are expected to hit the road than have since the Great Recession. But they’ll be keeping a tight grip on their wallets thanks to higher gas prices. The typical family plans to spend $692, a decrease of 14 percent from last year’s $809.
“You’ll see people eating sandwiches out the cooler instead of going into a restaurant,” says Susanne Pelt, spokeswoman for the South of the Border roadside attraction in South Carolina.
AAA projects 34.9 million Americans will travel 50 miles or more from home _ a slight increase of 100,000 travelers from last year and the highest number since 2007. But those who do make the journey will be spending a lot less, AAA and its survey partner IHS Global Insight say, based on interviews with 325 Americans who plan to travel for the holiday.
Rising gas prices are on the minds of 40 percent of travelers, with many planning to take shorter trips or otherwise conserve money. That might mean picking a Holiday Inn Express over a Holiday Inn or driving to a free beach instead of an amusement park.
But most refuse to abandon their vacation altogether.
“Americans really believe a vacation is a right,” says Joseph A. McInerney, CEO of the American Hotel & Lodging Association. “It’s not a luxury.”
And it’s not just higher gas prices that families have to deal with.
Rates at AAA three diamond hotels are expected to increase 5 percent from a year ago to $148 a night. Cheaper two diamond properties are up 10 percent to $109.
“We are seeing some folks who are saying they have to pinch pennies to make the trip,” says Paula Werne, spokeswoman for Holiday World in the southern Indiana town of Santa Claus.
With the stock market up and the economy generally better than a year ago, not everybody is scrimping and saving.
AAA predicts that 2.93 million people will board an airplane over the Memorial Day weekend, up 11.5 percent from last year despite higher airfares. The airlines have hiked airfares seven times since the start of the year. The average cost of a ticket is up more than 10 percent from last year.
That spike in air travel has also driven up the total distance families are expected to travel to 792 miles. That’s 27 percent greater than last year’s average travel distance of 626 miles.
Increased air travel is a sign that people at the higher end of the income scale are faring better. Those with incomes above $50,000 a year make up 69 percent of those who plan to travel, according to AAA. Last year, they were just 58 percent of the total.
The reason: higher gas prices take up a larger share of lower-income families’ household budgets.
As Memorial Day weekend approaches, pump prices are at their highest level in three years. That’s because oil rose 35 percent from mid-February through late April.
AAA conducted its survey from April 19 to April 23. Since then, gas prices have fallen. The average retail price slipped 8 cents in the past two weeks. Further declines are expected. That could help hotels, resorts and restaurants who count on summer tourists.
Last year, the price of gas fell 20 cents a gallon from the time of AAA’s survey to Memorial Day. AAA had originally predicted 32.1 million would travel. Ultimately, that number was 34.8 million.
Still, gas prices are above $4 a gallon in nine states and the District of Columbia. That plays a large part in people’s vacation planning.
“Gas prices are much more psychological than financial for most people,” says Steve Carvell, associate dean for academic affairs at Cornell University’s School of Hotel Administration.
Americans are paying an average of $3.91 a gallon at the pump _ $1.05 more than last year. That’s an extra $37 for a family driving 800 miles over the weekend.
“For most people, that’s not going to make or break a vacation plan,” Carvell says.
Brad Garner, chief operating officer at travel firm at STR Global, says people will find a way to make trips work.
The extra cost to fill up the family car over the holiday weekend equates to “a pizza and a six-pack of beer,” says Garner.
Many businesses are playing into that phycology, with hotels and tourist attractions once again offering gas cards to guests.
The Door County Maritime Museum in Sturgeon Bay, Wis., and the Wisconsin Maritime Museum about 100 miles to the south recently started a joint effort to encourage travelers to drive to the two museums, stopping at several cities along Lake Michigan along the way.
Bob Desh, executive director of the first museum says he wants tourists to look at the area differently.
“This is kind of a one-tank weekend trip along the coast,” Desh says.
____
Mayerowitz reporter from New York. Reporters Jeffrey Collins in Columbia, S.C., John Seewer in Toledo, Ohio, and Carrie Antlfinger in Milwaukee, Wis., contributed to this report.
Singapore’s Prime Minister Lee Hsien Loong, whose party’s five-decade rule oversaw a 41-fold jump in gross domestic product, may find past success doesn’t sell as well to younger voters in tomorrow’s election.
The People’s Action Party is facing the most contests for parliamentary seats since independence in 1965. PAP members will likely keep a majority at a time of record economic growth, according to Pearlyn Wong, an investment analyst in Singapore at Bank Julius Baer & Co., which manages about $262 billion. At the same time, a decline in the share of the popular vote may spur the next PAP government to lean toward opposition concerns.
Singapore’s success has fueled wider income inequality, with the world’s highest share of dollar-millionaire households contributing to pressure on property and consumer prices. The opposition has called for more limits on the influx of foreign workers that make up the majority of construction and shipyard employees, and urged further steps to contain home prices.
“The PAP has to be mindful of and adapt to the new generation of voters who demonstrate a ‘papa don’t preach’ mentality,” said Eugene Tan, assistant professor of law at the Singapore Management University. “A relatively poor showing at the general election would certainly get the PAP back to the drawing board not just to re-examine the policy but also how to better communicate the policies.”
Parliament Makeup
Polls close at 8 p.m. tomorrow. The parliament dissolved last month was made up of 82 PAP lawmakers, two elected opposition politicians and 10 non-elected members. Tan said a loss of more than seven seats by the PAP or their share of the popular vote dipping below 60 percent would be a poor showing.
In a nation where 82 percent of households have Internet access, the PAP’s Facebook page is “liked” by 25,004 people, less than the 32,332 who favor the rival Workers’ Party. Voter polls and approval ratings aren’t published in Singapore.
Opposition groups including the Workers’ Party and Singapore Democratic Party are contesting the PAP for 82 of 87 parliamentary seats on May 7. The constituency of Lee Kuan Yew, 87, the Cambridge University-trained lawyer who led the island from British rule and became its first premier, is the only one going uncontested.
“This is really shaping up to be an exciting election,” said Samantha Lee, 23, an undergraduate and first-time voter. “The PAP has done a great job bringing us so far but maybe it’s time to have more voices representing the people. The record number of opposition candidates this time must surely say something about citizens wanting more alternatives.”
Stock Reaction
Property stocks including CapitaLand Ltd. (CAPL) and Keppel Land Ltd. (KPLD) have fallen in the run-up to tomorrow’s vote amid concern there will be increased pressure to rein in home prices. CapitaLand has dropped 4.4 percent in the past month, exceeding the 1.6 percent decline in the Straits Times Index (FSSTI), while Keppel Land has retreated 11 percent.
“If there is a result that’s a lot less than expected for the ruling party, such as if they lose 20-30 percent of the number of seats in the parliament,” stocks would drop, said Wong of Bank Julius Baer. “There might be some concern in the market that some of the policies that they’ve been very aggressive on might be scaled back or modified, such as on casinos, tourism, commercial properties and immigration.”
Opposition parties may win 10 to 17 parliamentary seats, meaning the PAP will still have more than 80 percent of seats and “be in complete control of policy-making and implementation,” Prasenjit Basu, an economist at Daiwa Capital in Singapore, wrote in a report dated yesterday no faxing payday loan.
Growth Recipe
In recent years, Singapore’s drive for growth has included the opening of two casino-resorts and bringing the Formula One race to the island to boost tourism. More than a third of Singapore’s 5.1 million population is made up of foreigners and permanent residents, whose growing numbers have led to increased competition for housing, jobs and education.
Smaller than New York City and without natural resources, Singapore’s gross domestic product was about S$285 billion ($231 billion) last year, compared with S$6.9 billion in 1960, while GDP per capita surged to S$59,813 from S$1,310. GDP surged 14.5 percent last year, the most in Asia. Singapore is the only Asian country with AAA ratings from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.
“Do not rock this foundation,” Lee Kuan Yew said in an editorial in the Today newspaper last week. “Do not risk your assets, property values, job opportunities. Vote for men and women of proven character and track records of high performance.”
Paying Dividends
The administration of Lee’s son, Prime Minister Lee Hsien Loong, 59, says it hasn’t neglected its citizens for the sake of growth. In this year’s budget, the government plans to spend S$6.6 billion on benefits to ease the burden of inflation.
The government is distributing cash to all adult citizens as a “dividend” from record growth, supplementing the wages of low-income workers, upgrading homes and requiring companies to increase contributions into employees’ pension fund.
The PAP’s message still resounds among some voters.
“The current party works for me,” said Tan Sze Theng, 31, a tutor who lives in the affluent Bukit Timah neighborhood in Singapore. “I have my job, the country is stable, there are worse-off places to be in. There is complacency in the government, but it’s not big enough a reason for me to vote for the opposition.”
Lee Apologizes
Opposition groups are seeking to create a more diverse political structure. The Singapore Democratic Party said on its website April 18 that “little room has been left for the views of citizens to shape the policy-making process. This has led to a situation where local and national government is very far removed from the day-to-day concerns of the people.”
Prime Minister Lee apologized at a PAP rally for not moving faster to address shortfalls in housing, the Straits Times reported. “If we didn’t quite get it right, I am sorry but we will try and do better the next time,” the paper quoted him as saying May 3.
Dissent is growing among Singaporeans who may feel less beholden to a ruling party that led the island out of colonial rule than past voters. The shift mirrors that in nations from Malaysia to India, where the hold of independence-era parties has weakened. The last polls, in May 2006, returned the PAP to power with about 67 percent of the votes cast, down from 75 percent in the 2001 elections.
‘Very Complacent’
“They keep telling us how they built Singapore,” said Alvin Lee, a 25-year-old economics and finance student at Singapore Institute of Management who plans to vote for the opposition. “They are really very complacent.”
Singapore’s Gini coefficient, a gauge of income inequality, rose to 0.48 last year from 0.444 in 2000, according to the statistics department. A reading of zero means income equality, while a reading of one means complete inequality. Inflation accelerated to a two-year high of 5.5 percent in January.
“It’s very pressurizing living in Singapore,” said housewife Low Bee Kian, 39, who has three children aged 10 to 16. “Everything is so expensive. The government says the economy is doing well but why am I not feeling it?”
Sony executives have bowed in apology for a security breach in the PlayStation Network that caused the loss of personal data of some 77 million accounts on the online service.
Three executives, including Kazuo Hirai, the chief of Sony Corp.’s PlayStation video game unit, bowed for several seconds at Tokyo headquarters Sunday in the traditional style of a Japanese apology. It was their first public appearance since the worldwide problems surfaced in April payday loans with no fax.
Sony said account information, including names, birthdates, email addresses and log-in information, was compromised for players using its PlayStation Network. Hirai asked that all users change their passwords.
Nuclear safety officials say the first radiation measurements taken inside two reactor buildings at Japan’s crisis-stricken nuclear plant show a harsh environment but not one that will be impossible for humans to work in.
Nuclear safety agency official Hidehiko Nishiyama said Monday the measurements taken by two robots sent in to units 1 and 3 of the tsunami-wrecked Fukushima Dai-ichi nuclear plant mean that workers trying to restore plant systems will only be able to stay for short intervals inside the reactor buildings.
He said the radiation would not delay progress toward achieving a cold shutdown of the plant within nine months.
China’s statistics bureau said it “condemns” leaks of economic data and those responsible will be punished, after the office released economic indicators that matched rumors circulating in the market and online yesterday.
“We believe any illegal behavior will be punished by law,” Sheng Laiyun, a spokesman for the department, told a briefing in Beijing today. “Those spreading state secrets on the Internet or other public information networks should be held accountable.”
China’s first-quarter growth figure and other monthly economic data including the inflation rate were leaked yesterday ahead of the official release. Phoenix Satellite Television Holdings Ltd. reported 10 economic indicators on its website yesterday morning, citing an unidentified source. Figures released later yesterday by China’s central bank and today by the National Bureau of Statistics matched 9 of the numbers. Phoenix TV didn’t immediately respond to questions from Bloomberg News.
“Key data are widely circulated in the Chinese bureaucracy prior to their release,” said Brian Jackson, an emerging markets strategist at Royal Bank of Canada in Hong Kong. “The recent accuracy of market rumors must raise concerns about the integrity of the process.”
China’s economy, the world’s second-biggest, grew a more- than-estimated 9.7 percent in the first quarter and consumer prices rose 5.4 percent in March from a year earlier, the fastest pace since 2008.
Improving the System
Government departments, institutions and individuals have a responsibility to keep state secrets, Sheng said at the briefing. The bureau has narrowed the personnel who have “dealings with relevant information,” he said.
The bureau is studying ways to improve the system, including shortening the time-frame between production of the information and its release so as to reduce risks, Sheng said.
The Phoenix TV site said March consumer prices would rise 5.3 percent to 5.4 percent, while rumors circulating on China’s microblogs by yesterday afternoon had a consensus on 5 payday advance online.4, which also matched the official release today.
Jiang Guangce, a Shanghai-based partner and fund manager at Congrong Investment Management Co., got the correct numbers for China’s gross domestic product and consumer price index from a Hong Kong fund management company yesterday.
‘Normal in China’
“It’s normal in China, there are always channels for this sort of information,” Jiang said in a phone interview today, “The short side and the futures market in Hong Kong are always a step ahead. This is a result of China’s power structure.”
It was the fifth time in six months that an accurate consumer price index number was accurately circulated in the market and press reports before release. It’s become one of the most sought-after numbers because of China’s battle to curb inflation, which jumped to a 32-month high in March.
Early disclosure happens because too many government offices see data before they’re made public, He Keng, a former deputy head of the department and now a member of its consulting committee, said in an interview last month.
“A new set of procedures just has to be developed,” said David Cohen, a Singapore-based economist at Action Economics. “They’ll have to give more authority to the people in charge of data collecting and dissemination, and make clear to people, such as those in the central bank, not to talk about it.”
Any unauthorized release violates the Statistics Law and is punishable by a warning, demotion or firing, according to a rule issued by the government in March 2009.
A legal “loophole” means China’s laws don’t count profiting on leaked economic indicators as insider trading, according to Yan Yiming, a Shanghai-based securities lawyer.
–Kevin Hamlin, Fan Wenxin. With assistance by Zheng Lifei in Beijing and Sophie Leung in Hong Kong.
Canadians still haven
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