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Liam Halligan: Social Immobility And Rancour

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A section in a longer article on Corbyn, (the detail of which need not detain us here).

Our housing market, once a generator of social mobility and contentment is now a cause of social immobility and rancour. That badly undermines free markets, encouraging the likes of Corbyn to push wacky ideas such as rent controls and sky-high property taxes.

Source: Jeremy Corbyn walks tall whenever he can point to Tory failure

FWIW I can't really go along with the idea that access of younger cohorts to property is presently "Tory failure". Even if some of the big pieces of the puzzle were laid down pre-1997, the incentives that got us to 2008 were New Labour.

Home-ownership, while still high by international standards, has fallen from over 70pc of households in 2001 to 63pc today

The housing market, once a generator of social mobility and contentment is now a cause of social immobility and rancour
Among 25 to 34-year-olds, alarmingly, that share has plunged from 68pc to 39pc. Only 7pc of 16 to 25-year-olds own a property, down from 37pc little more than a decade ago. There is now an entire generation, most of whom look set to miss out altogether on the financial and personal security that home-ownership represents.

I don't think that we need to chase home-ownership rates as an end in themselves. We just need to make housing better and cheaper, and part of making renting better means massively improved security of tenure.

I was actually in a boozer the other day and heard some boomer going on about how the youngsters weren't buying houses because of the i-phones. (I honestly though this was apocryphal up to that point). Still a fall from 68% to 39% it pretty eye-catching. (First i-phone released in 2007 BTW, so market participants must have been anticipating the release and delaying house purchases until the cost of the first i-phones became clearer, ;) .)

My personal take, the Tories should get 2020 easy. However, if they don't get the housing market sorted by 2025 they'll have opened up a big piece of tactical ground for a party with a classic mixed-economy pitch led by a leader not swimming against the tide of history by identifying openly as an old school socialist. To get matters in hand by 2025, they need to make some enormous changes. Ten years will quickly pass. Pull together the demographics on that YouGov poll that from the Sun, (only in the 60+ age range do the Tories have a non-trivial lead on Corbyn) and it's easy to make the case that pretty soon housing is going to become the only game in town politically.

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A section in a longer article on Corbyn, (the detail of which need not detain us here).

Source: Jeremy Corbyn walks tall whenever he can point to Tory failure

FWIW I can't really go along with the idea that access of younger cohorts to property is presently "Tory failure". Even if some of the big pieces of the puzzle were laid down pre-1997, the incentives that got us to 2008 were New Labour.

I don't think that we need to chase home-ownership rates as an end in themselves. We just need to make housing better and cheaper, and part of making renting better means massively improved security of tenure.

I was actually in a boozer the other day and heard some boomer going on about how the youngsters weren't buying houses because of the i-phones. (I honestly though this was apocryphal up to that point). Still a fall from 68% to 39% it pretty eye-catching. (First i-phone released in 2007 BTW, so market participants must have been anticipating the release and delaying house purchases until the cost of the first i-phones became clearer, ;) .)

My personal take, the Tories should get 2020 easy. However, if they don't get the housing market sorted by 2025 they'll have opened up a big piece of tactical ground for a party with a classic mixed-economy pitch led by a leader not swimming against the tide of history by identifying openly as an old school socialist. To get matters in hand by 2025, they need to make some enormous changes. Ten years will quickly pass. Pull together the demographics on that YouGov poll that from the Sun, (only in the 60+ age range do the Tories have a non-trivial lead on Corbyn) and it's easy to make the case that pretty soon housing is going to become the only game in town politically.

That might be partially why Cameron looks like standing down for 2020 election. He won his second election by pandering to elderly house price biases. So they need a break from that association, new younger face, to attract the disgruntled house less generation in decade, and to reverse the gerontocratic policies of the last decade without losing too much face. Edited by Si1

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That might be partially why Cameron looks like standing down for 2020 election. He won his second election by pandering to elderly house price biases. So they need a break from that association, new younger face, to attract the disgruntled house less generation in decade, and to reverse the gerontocratic policies of the last decade without losing too much face.

The press seem to identify Osborn as the political brains of the Tory party. It isn't beyond the bounds of possibility that he's already read the demographic tea leaves and concluded that this is the case. That would certainly explain the change in BTL taxation (which was something of a shock to me, coming as it did from a Tory party that had been reliant on the affluent grey vote and the aspirant middle class for it's core support).

Professors Unsight or Neverwhere will correct me if I'm wrong, but GO doesn't seem that bothered about Basle III either, and seems to be quite happy to let Carney have a crack at BTL mortgages.

A Tory chancellor turning out to be HPC's poster boy is one of those things that's so unlikely it might actually happen (he would need to get rid of HTB first though - a bit of a black stain on his track record).

Edited by Exiled Canadian

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A section in a longer article on Corbyn, (the detail of which need not detain us here).

Source: Jeremy Corbyn walks tall whenever he can point to Tory failure

FWIW I can't really go along with the idea that access of younger cohorts to property is presently "Tory failure". Even if some of the big pieces of the puzzle were laid down pre-1997, the incentives that got us to 2008 were New Labour.

I don't think that we need to chase home-ownership rates as an end in themselves. We just need to make housing better and cheaper, and part of making renting better means massively improved security of tenure.

I was actually in a boozer the other day and heard some boomer going on about how the youngsters weren't buying houses because of the i-phones. (I honestly though this was apocryphal up to that point). Still a fall from 68% to 39% it pretty eye-catching. (First i-phone released in 2007 BTW, so market participants must have been anticipating the release and delaying house purchases until the cost of the first i-phones became clearer, ;) .)

My personal take, the Tories should get 2020 easy. However, if they don't get the housing market sorted by 2025 they'll have opened up a big piece of tactical ground for a party with a classic mixed-economy pitch led by a leader not swimming against the tide of history by identifying openly as an old school socialist. To get matters in hand by 2025, they need to make some enormous changes. Ten years will quickly pass. Pull together the demographics on that YouGov poll that from the Sun, (only in the 60+ age range do the Tories have a non-trivial lead on Corbyn) and it's easy to make the case that pretty soon housing is going to become the only game in town politically.

Whether Cameron gets it I don't know (I strongly suspect he doesn't), but I'm pretty sure Osborne does. We know Cameron wishes HTB had been introduced earlier, I wonder if Osborne doesn't?

Thing is Osborne also gets what'll happen electorally if he pops the bubble so he's either trying for zero HPI or perhaps even small decreases. If house prices crash he'll never become leader and the Tories probably won't win in 2020 - unless they crash soon and HPI can be restarted by 2019/20.

It'll be interesting to see what he does in the next budget about BTL, if sentiment hasn't changed he might turn the heat up.

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.

A Tory chancellor turning out to be HPC's poster boy is one of those things that's so unlikely it might actually happen (he would need to get rid of HTB first though - a bit of a black stain on his track record).

Htb was Cameron. And besides, outside hpc it's not too politically problematic.

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Thing is Osborne also gets what'll happen electorally if he pops the bubble so he's either trying for zero HPI or perhaps even small decreases. If house prices crash he'll never become leader and the Tories probably won't win in 2020 - unless they crash soon and HPI can be restarted by 2019/20.

It'll be interesting to see what he does in the next budget about BTL, if sentiment hasn't changed he might turn the heat up.

I think grant schnappes said it clearly at the start of the Tory coalition govt: their ideal is for nominal house prices to remain flat whilst salaries catch up with inflation.

If they fall nominally then Osborne will introduce a prop to make them flat again come next election. If they stay nominally static then he won't, and will just say the Tory government prevented house prices from falling.

Edited by Si1

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GO doesn't seem that bothered about Basle III either, and seems to be quite happy to let Carney have a crack at BTL mortgages.

Seeing as Tyrie's TSC identified the government's sizeable buy-to-let book as a problem to be addressed way back, long before Carney's appointment, and Carney was conspicuously Osborne's appointment it doesn't seem unreasonable to hypothesize that between Carney and Osborne an approach to the problem has been put together. It would make sense to let the Bank take a crack at it, hence providing political cover. The tax change acts as a little blood in the water, to let the canny swimmers know it's time to head back the beach.

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If you want social mobility then you have to deliver better education for less money.

The way to start that is to go in and sack 1/3 of teachers.

Then you need to make sure everyone has a job for 40h/week.

Does not matter if its pushing a broom up and down - in which middlesbrough will have the UKs cleanest street.

In short, shake out the public sector and kick **** of people on benefit.

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I just wonder if the BoE might have bigger fish to fry soon - another QE round for instance?

We have the autumn statement coming along in not long, maybe more on BTL then

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A section in a longer article on Corbyn, (the detail of which need not detain us here).

Source: Jeremy Corbyn walks tall whenever he can point to Tory failure

FWIW I can't really go along with the idea that access of younger cohorts to property is presently "Tory failure". Even if some of the big pieces of the puzzle were laid down pre-1997, the incentives that got us to 2008 were New Labour.

I don't think that we need to chase home-ownership rates as an end in themselves. We just need to make housing better and cheaper, and part of making renting better means massively improved security of tenure.

I was actually in a boozer the other day and heard some boomer going on about how the youngsters weren't buying houses because of the i-phones. (I honestly though this was apocryphal up to that point). Still a fall from 68% to 39% it pretty eye-catching. (First i-phone released in 2007 BTW, so market participants must have been anticipating the release and delaying house purchases until the cost of the first i-phones became clearer, ;) .)

My personal take, the Tories should get 2020 easy. However, if they don't get the housing market sorted by 2025 they'll have opened up a big piece of tactical ground for a party with a classic mixed-economy pitch led by a leader not swimming against the tide of history by identifying openly as an old school socialist. To get matters in hand by 2025, they need to make some enormous changes. Ten years will quickly pass. Pull together the demographics on that YouGov poll that from the Sun, (only in the 60+ age range do the Tories have a non-trivial lead on Corbyn) and it's easy to make the case that pretty soon housing is going to become the only game in town politically.

Ah yes, iphones.

A smart phone on contract is, what, 40/month - thats ~6 hours income at NMW. Lets call that a morning works, a month.

My Dad is slightly older than boomers. He spent 1/3 of his takehome p1ssing around on a car.

My Uncles used to spend 50% of their take home in the pub; p1ssed down the drain.

Kids these days rearely have cars. If they do, its borrowed from their Mums. They do not drink FFS! 'spoons can be like an OAP home sometime.

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Whether Cameron gets it I don't know (I strongly suspect he doesn't), but I'm pretty sure Osborne does. We know Cameron wishes HTB had been introduced earlier, I wonder if Osborne doesn't?

Thing is Osborne also gets what'll happen electorally if he pops the bubble so he's either trying for zero HPI or perhaps even small decreases. If house prices crash he'll never become leader and the Tories probably won't win in 2020 - unless they crash soon and HPI can be restarted by 2019/20.

It'll be interesting to see what he does in the next budget about BTL, if sentiment hasn't changed he might turn the heat up.

Hard to divine if theirs any deep thought on stategy going ahead.

That one-eyed useless tnuc genuinely though he'd set Labour up for Millennia. You really need to read some transcript from 2004ish.

He'd discovered the perpetual election machine - tax credits funded by light touch regulation of the City.

It really is/was that stupid.

As far as Osbourne goes, I was watching the Anti-austerity protests om the news - What do we want? Free money! When do we want it? Now!

Same as 2010. A mass demo organised by the leftist unions to protect the gross overspend from the Labour days. Between getting spat at and physcially hassled - which frankly has ruined the little credit the march had - the reporter was interviewee protester was banging on about right wing etc.

But there's nothing right wing or austere about the government of the last 6 years. The state is still consuming way over 45% of GDP. We spend Swedish amounts of money for a Texas level of public service. Thats the problem.

But back to Osbourne. He's moving bits of the government left. The strategy, which is so obvious when you look, he's forcing Labour to occupy the far left, pushing them into the Lunatic zone. Corbyn is a cherry on the cake - Cons are pushing, Corbyn and his lunatic mates are pulling.

The atomic bomb for for the left, and a means to sort out EU benefit tourists, will be a move to contribution based welfare, mvoing away from the unworkable needs base welfare, which even the leftist Labour types I know admit has been a disaster for both the state and the person claiming it, well, their kids.

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If you want social mobility then you have to deliver better education for less money.

The way to start that is to go in and sack 1/3 of teachers.

Then you need to make sure everyone has a job for 40h/week.

Does not matter if its pushing a broom up and down - in which middlesbrough will have the UKs cleanest street.

In short, shake out the public sector and kick **** of people on benefit.

How will sacking teachers help improve education?

Teachers are already overworked not only with teaching related things but also box ticking activities for the government, they probably dream of working only 40hrs a week. I don't know that many teachers but the ones I do know think that even with the long holidays they are probably breaking the EU work hours directive with all the work they do at home.

Want to improve education and save money, get rid of all the box ticking and bureaucracy, give the teachers the power to discipline students, and stop flipping politicians from continuously interfering. Oh and start listening to what teachers are saying instead of the politards at the DM.

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Hard to divine if theirs any deep thought on stategy going ahead.

That one-eyed useless tnuc genuinely though he'd set Labour up for Millennia. You really need to read some transcript from 2004ish.

He'd discovered the perpetual election machine - tax credits funded by light touch regulation of the City.

It really is/was that stupid.

As far as Osbourne goes, I was watching the Anti-austerity protests om the news - What do we want? Free money! When do we want it? Now!

Same as 2010. A mass demo organised by the leftist unions to protect the gross overspend from the Labour days. Between getting spat at and physcially hassled - which frankly has ruined the little credit the march had - the reporter was interviewee protester was banging on about right wing etc.

But there's nothing right wing or austere about the government of the last 6 years. The state is still consuming way over 45% of GDP. We spend Swedish amounts of money for a Texas level of public service. Thats the problem.

But back to Osbourne. He's moving bits of the government left. The strategy, which is so obvious when you look, he's forcing Labour to occupy the far left, pushing them into the Lunatic zone. Corbyn is a cherry on the cake - Cons are pushing, Corbyn and his lunatic mates are pulling.

The atomic bomb for for the left, and a means to sort out EU benefit tourists, will be a move to contribution based welfare, mvoing away from the unworkable needs base welfare, which even the leftist Labour types I know admit has been a disaster for both the state and the person claiming it, well, their kids.

the only problem with GO's plan to push labour to the left might be if people actually want that at the next election

the SNP was pretty leftie and look what happened there

sure, it was mostly a backlash from the in/out referendum, but there was never anything but left wing policies on offer by choosing SNP

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the only problem with GO's plan to push labour to the left might be if people actually want that at the next election

the SNP was pretty leftie and look what happened there

sure, it was mostly a backlash from the in/out referendum, but there was never anything but left wing policies on offer by choosing SNP

Now they don't. Not in England.

SNP is a national party, playing the victim and thinking of ways to spend English money.

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you may be right

I wonder if the (small) surge of people engaging with politics just to get Corbyn elected as Labour leader was a bit of a continuation of the parry left seen in Scotland here in England

time will tell

I have seen nothing from any politician that would make me do anything different from continuing to draw a phallus on my voting paper at every election

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you may be right

I wonder if the (small) surge of people engaging with politics just to get Corbyn elected as Labour leader was a bit of a continuation of the parry left seen in Scotland here in England

time will tell

I have seen nothing from any politician that would make me do anything different from continuing to draw a phallus on my voting paper at every election

You'd be surprised (or not) at how many people think that Corbyn getting the largest number of votes gives him some sort of shoe in at the national level. He got 300k votes. He only got the highest vote on record as Labour changed the the voting system they use FFS!

Look, the majority of Labour MPs, those who will have to work with with his walkign disaster are running away from him.

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Hopefully Corbyn is unelectable in a GE.

A lot can happen between now and May 2020 though so, whilst it is currently unimaginable to see him winning, there are things that could make it slightly more likely. Getting in as Labour Leader enables him to do more than I would ideally like

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Hopefully Corbyn is unelectable in a GE.

A lot can happen between now and May 2020 though so, whilst it is currently unimaginable to see him winning, there are things that could make it slightly more likely. Getting in as Labour Leader enables him to do more than I would ideally like

+1

But I don't want the tories to have too strong a mandate either

Edited by Si1

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The press seem to identify Osborn as the political brains of the Tory party. It isn't beyond the bounds of possibility that he's already read the demographic tea leaves and concluded that this is the case. That would certainly explain the change in BTL taxation (which was something of a shock to me, coming as it did from a Tory party that had been reliant on the affluent grey vote and the aspirant middle class for it's core support).

Professors Unsight or Neverwhere will correct me if I'm wrong, but GO doesn't seem that bothered about Basle III either, and seems to be quite happy to let Carney have a crack at BTL mortgages.

A Tory chancellor turning out to be HPC's poster boy is one of those things that's so unlikely it might actually happen (he would need to get rid of HTB first though - a bit of a black stain on his track record).

Seeing as Tyrie's TSC identified the government's sizeable buy-to-let book as a problem to be addressed way back, long before Carney's appointment, and Carney was conspicuously Osborne's appointment it doesn't seem unreasonable to hypothesize that between Carney and Osborne an approach to the problem has been put together. It would make sense to let the Bank take a crack at it, hence providing political cover. The tax change acts as a little blood in the water, to let the canny swimmers know it's time to head back the beach.

I would hazard that the Bank was probably highly involved in the BTL relevant sections of the risk weight proposals and so Carney and, by implication, Osborne are not that bothered about Basel III's impact on BTL because they had a hand in engineering that specific impact.

As for HTB the new ISA looks like it might actually be useful given it may well delay demand from FTBers by incentivising them to keep saving for a few more years whilst over-leveraged BTLers unwind their positions.

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I'm a member of this 25-34 year old demographic who has seen my chance of home ownership snatched away.

I'm all for left-wing things like paying workers decently, nationalising the natural monopolies and state investment in infrastructure. I'll vote for Corbyn if he breaks with New Labour authoritarianism and is strong enough on housing.

Osborne might be aiming for a real-terms fall in prices, but I'm not sure I believe it considering Help to Buy has helped London prices increase 50% over the term of the Coalition. Even if he gets it he'll still have stiffed me good unless he can also arrange for the savings I've accumulated during the priced out decade to keep up. If I'm going to be buying my first house in my 40s then it's probably going to be my only one - no way am I settling for a 'starter home'.

I refuse to shrug my shoulders and accept I was just born at the wrong time.

Saying that, my vote will be going to whoever fixes this mess and gets me a decent house. Even Osborne. And I say that as someone who never thought he would be voting Tory in his life.

We'll see. At the minute prices are still rising and no-one is offering me anything.

Edited by irrationalactor

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As for HTB the new ISA looks like it might actually be useful given it may well delay demand from FTBers by incentivising them to keep saving for a few more years whilst over-leveraged BTLers unwind their positions.

The ISA is tempting but in four years there are going to be a lot of first time buyers clutching their £15k deposits. If current trends continue and they find that £15k secures them approximately a shoebox they're not going to be very happy.

Just in time to vote.

I'm also not convinced its worth giving up my £15k ISA allowance for. Not decided yet.

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The ISA is tempting but in four years there are going to be a lot of first time buyers clutching their £15k deposits. If current trends continue and they find that £15k secures them approximately a shoebox they're not going to be very happy.

Just in time to vote.

I'm also not convinced its worth giving up my £15k ISA allowance for. Not decided yet.

I haven't looked into the detail but I suspect it may be tied to new build developments - i.e. you have purchase your property from particular companies in order to get the bonus - in which case I doubt it would be worth it on an individual level. The wider effect on the market could be interesting though, as all of the BTL related changes will be phasing in over the exact four year period in which the first people to take up HTB ISAs will be saving rather than buying. That said if the take up is as low as with the other HTB schemes it may have little material impact.

Edit: From the government's explanation of the scheme there doesn't actually appear to be any developer tie in. In other news I should really learn to read things before I run my mouth and not after ;)

Edited by Neverwhere

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A section in a longer article on Corbyn, (the detail of which need not detain us here).

Source: Jeremy Corbyn walks tall whenever he can point to Tory failure

FWIW I can't really go along with the idea that access of younger cohorts to property is presently "Tory failure". Even if some of the big pieces of the puzzle were laid down pre-1997, the incentives that got us to 2008 were New Labour.

I don't think that we need to chase home-ownership rates as an end in themselves. We just need to make housing better and cheaper, and part of making renting better means massively improved security of tenure.

I was actually in a boozer the other day and heard some boomer going on about how the youngsters weren't buying houses because of the i-phones. (I honestly though this was apocryphal up to that point). Still a fall from 68% to 39% it pretty eye-catching. (First i-phone released in 2007 BTW, so market participants must have been anticipating the release and delaying house purchases until the cost of the first i-phones became clearer, ;) .)

My personal take, the Tories should get 2020 easy. However, if they don't get the housing market sorted by 2025 they'll have opened up a big piece of tactical ground for a party with a classic mixed-economy pitch led by a leader not swimming against the tide of history by identifying openly as an old school socialist. To get matters in hand by 2025, they need to make some enormous changes. Ten years will quickly pass. Pull together the demographics on that YouGov poll that from the Sun, (only in the 60+ age range do the Tories have a non-trivial lead on Corbyn) and it's easy to make the case that pretty soon housing is going to become the only game in town politically.

Can you post a link to this please?

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Another thought. What is the point of boomers and pensioners having high house values? Apparently it makes them "feel good" but unless they sell up and buy somewhere cheaper, the only benefit they get from having a high value house is the inheritance value for their children or some sort of equity release (so it's more about giving those likely to vote a feeling of security rather than real wealth). Therefore, wouldn't it make more sense to just give their children cheaper house prices than have this convoluted way of giving the younger generation a home? It would get more votes from the younger generation (who will be the majority demographic in the next few decades), get all those young people still living at home out of their parents hair, mean a lot more social mobility and mean more money in the rest of the economy (because younger people have more money in their pocket to spend on goods rather than rent/high mortgage).

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Another thought. What is the point of boomers and pensioners having high house values? Apparently it makes them "feel good" but unless they sell up and buy somewhere cheaper, the only benefit they get from having a high value house is the inheritance value for their children or some sort of equity release (so it's more about giving those likely to vote a feeling of security rather than real wealth). Therefore, wouldn't it make more sense to just give their children cheaper house prices than have this convoluted way of giving the younger generation a home? It would get more votes from the younger generation (who will be the majority demographic in the next few decades), get all those young people still living at home out of their parents hair, mean a lot more social mobility and mean more money in the rest of the economy (because younger people have more money in their pocket to spend on goods rather than rent/high mortgage).

Have you ever tried arguing that with one of them?

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