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eric pebble

H Prices Overvalued; Personal Bankruptcies "large Social Problem"

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http://66.249.93.104/search?q=cache:dF9q-Z...k&ct=clnk&cd=10

Mervyn King: UK house prices are overvalued

By Nick Booker, Staff Columnist

Published 11th May 2006, (a Thursday) at 07:00AM

Britain's house prices are overvalued and personal bankruptcies risk becoming a "large social problem", warns the Bank of England's Governor, Mervyn King.

"The level of house prices still seems remarkably high relative to those measures that put it into context," said King, at the launch of the Bank's May Inflation Report.

King also warned that recent gains in house prices may not continue as house prices are still high compared with average earnings.

On Britain's personal debt, King said: "The proportion of unsecured debtors reporting their debt as a serious problem has gone up, the number of calls to the National Debt Helpline has risen quite sharply, so I think the signs are that a potentially large social problem, with many households getting into difficulty with their debts, is materialising."

However, he added: "The rate of increase in unsecured borrowing has fallen very markedly in the last year. The position on secured debt looks relatively benign."

Figures from the British Bankers' Association last week showed credit-card debt falling by £579m during March, as spending slows down.

Meanwhile, official figures showed that the number of people declaring themselves insolvent was at 23,351 in the three months to March, the highest since records began.

The country's current account deficit (around 4% of GDP) would need to be addressed, King said: "We keep running current account deficits which means that we're spending as a country more than we're producing. And there is a limit in the long run to that."

Edited by eric pebble

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Its the banks who are getting a slap with the bancrupcies, their lending the money and not getting it back.

They will learn soom and start to put their interest rates up to cover it.

0% credit cards are allready tightening up the lenght of time they are offering.

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http://business.guardian.co.uk/story/0,3604,843624,00.html

Mervyn King, the deputy governor of the Bank of England, has issued his starkest warning yet of the risk of a crash in Britain's debt-fuelled housing market tipping the economy into recession.

He has warned about it for years..

Sentiment should be used to turn it.. I am worried that the economies eventual collapse may happen first..

Its happening.. the IMF, old Merv.. Nationwide, amex... et all...

They have all said and warned..

but a guy on the BBC from the Halifax will still swing a few poor desperate fools

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http://business.guardian.co.uk/story/0,3604,843624,00.html

Mervyn King, the deputy governor of the Bank of England, has issued his starkest warning yet of the risk of a crash in Britain's debt-fuelled housing market tipping the economy into recession.

He has warned about it for years..

Sentiment should be used to turn it.. I am worried that the economies eventual collapse may happen first..

Its happening.. the IMF, old Merv.. Nationwide, amex... et all...

They have all said and warned..

but a guy on the BBC from the Halifax will still swing a few poor desperate fools

yep -- even the pros are worried......

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What really infuriates me is that this has all been so obvious from the moment Labour got in. Labour always, always, always mess up the economy. In the past Labour have only ever been in power for short a time, so the damage has always been limited. The mess created has been small enough to be able to be repaired by the following Conservatives.

Now the problem is three times worse. Labour have got themselves into so much trouble they are unable to do anything about it. They are simply a one term protest party, always have been always will be, with no ability to run things long term. Their situation now is if they raise rates there will be a massive recession and if they leave things as they are there will be a massive bubble then a recession.

I think Labour were as surprised as I was when they managed to get in for a second term. What’s worse is that it is becoming more obvious that they had not planned to be in power for that term either.

I believe the main problem had been young voters. They were unaware of what happens under a Labour government and thought they would protest vote against what their parents had voted for ie the Conservatives. So we now have a entire generation of young people who think Labour are great, house prices only ever go up and interest rates are always low. The buy now, never pay generation. They will however get what they deserve in the coming years. Once the economy collapses and Gordy’s miracle crumbles they will all be saddled with debts and negative equity of mammoth proportions. This will cripple them financially for the rest of their lives and rightly so. Welcome back to reality.

Don’t get me wrong I am not a Conservative voter either. They have become so weak and leftwing they are where Labour are right now. This country has two main parties that are both leftwing. Same policies, lies, incompetence and greed. We need a strong leader now, not Gordy or that drip Cameron but another Winston or Maggie. Unfortunately the chances of us getting a leader with a backbone get progressively less as time goes by due to the touchy feely leftwing parenting we have endured recently. Don’t believe me ? Well that’s what has brought about the lack of discipline we all suffer now in our towns and cities. New Labour chav culture. I don’t simply blame the Labour politicians as all Labour politicians don’t know any better. I blame all Labour voters, for you brought it all on yourselves and ruined a once great nation, shame on you chavs.

What of the future ? There isn’t one.

Wow, I’m a bit grumpy today aren’t I ?

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What really infuriates me is that this has all been so obvious from the moment Labour got in. Labour always, always, always mess up the economy.

I think you'll find the Conservatives stuffed the economy the last time around.

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A crisis all of the central bank and retail banks own making.

Why has the central bank been complicit in propping up unsustainable econmics and unsustainable political policies?

Why are they still doing it?

It will take decades to get a reasoned response I expect.

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A crisis all of the central bank and retail banks own making.

Why has the central bank been complicit in propping up unsustainable econmics and unsustainable political policies?

Why are they still doing it?

It will take decades to get a reasoned response I expect.

It takes pain and hardship to make people change.

In the seventies the economic fashion was to lower unemployment, but this brought high inflation and wrecked economies.

Now the current fashion is to target consumer prices, and maintain monetary stability.

Hopefully after this bust central banks will start to consider ways of containing asset bubbles.

Edited by BandWagon

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What really infuriates me is that this has all been so obvious from the moment Labour got in. Labour always, always, always mess up the economy. In the past Labour have only ever been in power for short a time, so the damage has always been limited. The mess created has been small enough to be able to be repaired by the following Conservatives.

Now the problem is three times worse. Labour have got themselves into so much trouble they are unable to do anything about it. They are simply a one term protest party, always have been always will be, with no ability to run things long term. Their situation now is if they raise rates there will be a massive recession and if they leave things as they are there will be a massive bubble then a recession.

I think Labour were as surprised as I was when they managed to get in for a second term. What’s worse is that it is becoming more obvious that they had not planned to be in power for that term either.

I believe the main problem had been young voters. They were unaware of what happens under a Labour government and thought they would protest vote against what their parents had voted for ie the Conservatives. So we now have a entire generation of young people who think Labour are great, house prices only ever go up and interest rates are always low. The buy now, never pay generation. They will however get what they deserve in the coming years. Once the economy collapses and Gordy’s miracle crumbles they will all be saddled with debts and negative equity of mammoth proportions. This will cripple them financially for the rest of their lives and rightly so. Welcome back to reality.

Don’t get me wrong I am not a Conservative voter either. They have become so weak and leftwing they are where Labour are right now. This country has two main parties that are both leftwing. Same policies, lies, incompetence and greed. We need a strong leader now, not Gordy or that drip Cameron but another Winston or Maggie. Unfortunately the chances of us getting a leader with a backbone get progressively less as time goes by due to the touchy feely leftwing parenting we have endured recently. Don’t believe me ? Well that’s what has brought about the lack of discipline we all suffer now in our towns and cities. New Labour chav culture. I don’t simply blame the Labour politicians as all Labour politicians don’t know any better. I blame all Labour voters, for you brought it all on yourselves and ruined a once great nation, shame on you chavs.

What of the future ? There isn’t one.

Wow, I’m a bit grumpy today aren’t I ?

There are a lot of people getting very angry with the way our country has been totally mis-managed. I am suprised this has not personified itself into higher levels of violence/riots etc. , but it must explode quite soon, unfortunately the people who will be blamed for this mess will have had nothing to do with its cause.

I agree with much of your sentiments and also despair at what the future could hold.

(agree that tories are now more left wing than..........anyone)

Who is electable?

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Politicians are so spineless and inept, it takes the Governor of the Bank of England to say the things that MPs haven't the guts to. If the Tories were in power the situation re. house prices and consumer debt would be no different. They are not prepared to speak out on these issues even when in opposition.

The only reason the Lib Dem's Vince Cable has commented is because he knows he will never have to sort it out.

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It is totaly irrellevent as to which flavor of government is in at the moment, the USA and Australia both have conservative governments and both of these countries have runaway house prices caused by the same false low interest rates and lax lending practices, the same would be true in the UK had we had the conservatives in also, the last serious ressecion with high unemployment was when the conservatives were in charge and interest rates were over 15%. Also another thing to take note of is that Mervin King and his cronies in the MPC have the vote on interest rates and could have upped them earlier to keep things in order, which leads me to conclude that one of two things is happening, 1: The MPC members are actualy voting to keep their own house prices high or in reality they arn't in any way independent and are just pupets for the government. The government of course needs false accounting via the CPI stats in order to justify the low interest rates which as we all know are lower than real inflation. ie they also want house prices to keep rising for thier own idividual benefit and to keep the population spending via 'feeling rich' effect. So in my opinion Mervin King has a cheek stating the obvious 7 years after the event, which was about when house prices passed the point of reason.

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Guest pioneer31

What really infuriates me is that this has all been so obvious from the moment Labour got in. Labour always, always, always mess up the economy. In the past Labour have only ever been in power for short a time, so the damage has always been limited. The mess created has been small enough to be able to be repaired by the following Conservatives.

So, so, true.

My grandad used to say this and he's been dead for 20 years.

I think you'll find the Conservatives stuffed the economy the last time around.

Despite all their other failings, the Tories don't do so badly. The Economy wasn't in bad shape in 1997. Look at it now!

People are living in a fools paradise and thinking that Labour are the party who manage the Economy best. They don't and they never did.

It's an illusion. All the public see is the spend, spend, spend of Labour and forget that they're being taxed, taxed, taxed. So much tax is by stealth and to add to it, we have the biggest cooking of inflation figures ever.

The Tories are like the man who has holes in his shoes despite having 30k in the bank (the analogy being that they don't spend money on essentials when the cash is there)

New Labour are like the man who drives a Mercedes S Class even though he earns 12k a year. (the analogy being that they borrow and overspend on stuff that we don't need. Johnny Taxpayer suffers as a consequence)

Edited by pioneer31

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So, so, true.

My grandad used to say this and he's been dead for 20 years.

Despite all their other failings, the Tories don't do so badly. The Economy wasn't in bad shape in 1997. Look at it now!

People are living in a fools paradise and thinking that Labour are the party who manage the Economy best. They don't and they never did.

It's an illusion. All the public see is the spend, spend, spend of Labour and forget that they're being taxed, taxed, taxed. So much tax is by stealth and to add to it, we have the biggest cooking of inflation figures ever.

The Tories are like the man who has holes in his shoes despite having 30k in the bank (the analogy being that they don't spend money on essentials when the cash is there)

New Labour are like the man who drives a Mercedes S Class even though he earns 12k a year. (the analogy being that they borrow and overspend on stuff that we don't need. Johnny Taxpayer suffers as a consequence)

So true Poineer -- But what amazes me is how people don't seem to realize that most MPs - Nu Labour included - have been buying Buy to Let flats/properties all over the place for years....... using their very generous allowances to fund the whole thing. The press has largely ignored the whole thing - surprise surprise!! ..... VI's -- and any budding journo worth his salt would do VERY well to uncover the facts on this..... as I have said many times on this site. I'll bet any of you that - if someone really determined was to investigate this and the whole issue of the PROPERTY LOBBY/PR scam in the Houses of Parliament and in Govt. Depts., quangos, etc etc. - they would uncover a can of worms. Anyone out there know a journalist who needs a break?

Edited by eric pebble

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It is a complete myth that Labour always ruins the economy and Tories save it. In the last 30 years it is probably even-stevens, if you judge economies by employment, disposable income and living conditions. The problem is that no government is ever particularly talented at running an economy, and in any case, western economies are almost entirely controlled not by governments but giant corporations.

The best governments are those who interfere with the minimum fuss in order to curb the excesses of unrestrained corporations and provide tangible improvements in the quality of life of its citizens. Punch and Judy Yah-boo arguments regarding economic mis-management of political parties is really a fruitless pastime....they are all as talentless as each other.

Why not focus attention on the large corporations who are doing the real damage, and that includes every bank in the Uk, who rip off their customers, have an active cartel in price fixing, become more and more remote from the people whose cash they abuse and treat their employees like dirt. THIS is what you should be concerned about, along with SOCIAL policy of governments which makes, or ruins, peoples' quality of life and access to justice.

VP

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What really infuriates me is that this has all been so obvious from the moment Labour got in. Labour always, always, always mess up the economy.

Have to say it wasn't to me.

Didn't realise that a property bubble would engulf the UK and the world. Unfortunately such a website never existed in the late 1990s to warn me.

If I'd have known, then my life would certainly have played out a lot differently - that's for sure! :o

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It is a complete myth that Labour always ruins the economy and Tories save it. In the last 30 years it is probably even-stevens, if you judge economies by employment, disposable income and living conditions. The problem is that no government is ever particularly talented at running an economy, and in any case, western economies are almost entirely controlled not by governments but giant corporations.

The best governments are those who interfere with the minimum fuss in order to curb the excesses of unrestrained corporations and provide tangible improvements in the quality of life of its citizens. Punch and Judy Yah-boo arguments regarding economic mis-management of political parties is really a fruitless pastime....they are all as talentless as each other.

Why not focus attention on the large corporations who are doing the real damage, and that includes every bank in the Uk, who rip off their customers, have an active cartel in price fixing, become more and more remote from the people whose cash they abuse and treat their employees like dirt. THIS is what you should be concerned about, along with SOCIAL policy of governments which makes, or ruins, peoples' quality of life and access to justice.

VP

dunno personally I think the last 3 or 4 years has been a covered up recession. My local job centre is hitting record figures, housing shortages here because people cant afford anything higher priced and low wages meaning there is too many unemployed going for each job.

Seems the recession has been covered by people spending their equity.

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the general cycle seems to be:

labour create artificial public sector jobs paid for by higher taxes until the public won't take it any more and the windfall money runs out

the tories then strip everything back to what the country can afford / is willing to pay for until the public won't take any more

repeat to fade

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I think you'll find the Conservatives stuffed the economy the last time around.

You'll also find that the Tories had also made great moves to repair it too, and its evident

looking at the stats in 1996 that the economy was recovering.

Labour have taken the credit for this though and stoked it when it didn't need stoking!

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It takes pain and hardship to make people change.

In the seventies the economic fashion was to lower unemployment, but this brought high inflation and wrecked economies.

Now the current fashion is to target consumer prices, and maintain monetary stability.

Hopefully after this bust central banks will start to consider ways of containing asset bubbles.

Sadly - bloke in that business told me it's simply a numbers game. The banks, mortgage co's etc. [VI's] have factored in a 10-15% personal-bust rate - quite cynically - and it hardly really touches their final MASSIVE, HUGE, ENORMOUS profits - they just write that off as expected fallout rate.

They are just playing a really, really cynical numbers game with us all - they LOVE high house prices - THE HIGHER THE BETTER -= they don't give a stuff for those who are locked out. The higher prices go - the bigger mortgages they lend...... they tweak it just to keep the momentum going.

How? - what's so sad is - people don't seem to understand this! THEY i.e. the Banks, mortgage co's - THEY are behind all those small, medium and larger articles ALL OVER THE MEDIA - and which STILL talk up the market AS MANY DAYS AS POSSIBLE IRRESPECTIVE OF EVENTS ON and AROUND THOSE DAYS -- e.g. today - various articles saying "BTL market improving"......THIS IS DESIGNED TO COUNTER THE REALLY BAD STOCKMARKET NEWS OUT THERE IN THE LAST FEW DAYS.

PEOPLE OUT THERE -- THESE ARTICLES/SOUNDBITES/TV ARTICLES [etc etc.] ARE PUT INTO THE MEDIA BY THE VESTED INTERESTS DAY IN DAY OUT......... You must understand this.........THIS IS HOW THE WHOLE PYRAMID SELLING SCAM JUST GOES ON AND ON AND ON........

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Righteous you are way off the mark with your comments. I, along with most of my friends didn't vote for labour. Infact, at the age of 28, I have never voted in my life fullstop, again, just like most of my friends. Truth is that whoever was in power now would have stuffed the economy. The reason is that it works in a big cycle. Boom, bust, boom, bust ad infinitum.

Leaving university in 2001, I entered a world where I couldn't buy a house. Prices were and still are way too high, and so are my debts. You can smugly proclaim that my generation has brought it upon ourselves, but ask yourself this, what age are all the BTL brigade? What age are most of the people fuelling this mess? Is it something like 7% of the market are FTB's now? I think you will find the answer to your question is that the people who voted in labour last time are mostly middle/old aged.

Due to the hopelessness of the situation, a lot of people, including myself have chosen to spend our money on holidays and the high life. I mean, I can't buy a house, so what am I going to spend my money on? Yes I could save for a deposit, but when you see no end to the housing madness, and no hope of ever getting on the ladder, why bother saving?

All the FTB's are screwed with insecured loans, all the home owners are screwed as there is no new blood entering the market, it won't be long before the economy grinds to an emphatic halt. Labour, conservative, BNP, whoever the next parliament is will inherit a mess of epic proportions, and will be powerless to intervene as the whole thing comes crashing down.

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Righteous you are way off the mark with your comments. I, along with most of my friends didn't vote for labour. Infact, at the age of 28, I have never voted in my life

:o That’s quite a startling confession, I’m not quite sure why you wrote that. Are you trying to help me prove my point ? You couldn’t have made my case any stronger when I said “I believe the main problem had been young voters.”

So at 28 years old you have never had the common sense to use your vote ? Couldn’t you have got someone to help you or at least tried to work things out for yourself ? There are many ways you can find out what each party stands for so you have little if any excuse. Also, I believe if you couldn’t be bothered to vote for what you think is right then you have no right to complain about the choice of party less lethargic people voted for.

Leaving university in 2001,

University, and you don’t know how to pick a party to vote for !! What are they teaching you nowadays ? Oh don’t tell me “art student”. :lol:

I entered a world where I couldn't buy a house

Yes it is a shock leaving university isn’t it, did you really expect to be able to buy a house as soon as you left university !!

Prices were and still are way too high, and so are my debts. You can smugly proclaim that my generation has brought it upon ourselves,

Yes and I can say it with more certainty and smugness than before thanks to you. People are going to think I have re-joined the forum under the pseudonym of Twenty Something to bolster my claims, geezz you can’t make this stuff up !! :D

I think you will find the answer to your question is that the people who voted in labour last time are mostly middle/old aged.

Yes I am sure you are right as it appears you and your friends don’t vote !!

Due to the hopelessness of the situation, a lot of people, including myself have chosen to spend our money on holidays and the high life. I mean, I can't buy a house, so what am I going to spend my money on? Yes I could save for a deposit, but when you see no end to the housing madness, and no hope of ever getting on the ladder, why bother saving?

I think I am beginning to understand why you couldn’t work out who to vote for when you say “high life”.

Bizarrely, you have also contradicted yourself in the same post.

I could save for a deposit, but when you see no end to the housing madness, and no hope of ever getting on the ladder

The reason is that it works in a big cycle. Boom, bust, boom, bust ad infinitum.

it won't be long before the economy grinds to an emphatic halt

whoever the next parliament is will inherit a mess of epic proportions, and will be powerless to intervene as the whole thing comes crashing down.

Which statement did you mean to write ?

All the FTB's are screwed with insecured loans, all the home owners are screwed as there is no new blood entering the market, it won't be long before the economy grinds to an emphatic halt. Labour, conservative, BNP, whoever the next parliament is will inherit a mess of epic proportions, and will be powerless to intervene as the whole thing comes crashing down.

Maybe you and your friends could have spared us all from this if only you had have voted. Perhaps when the next election comes around you may make the effort to get off you a$$ and drag your friends with you down to the polling station. Don’t worry they stay open quite late so you don’t have to get up early or anything.

I’ll tell you what Twenty Something thank you very much for your post, I was feeling quite low tonight but you have really cheered me up. I am certain the country’s future will be safe in your generation’s hands. :lol:

Edited by Righteous

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:o That’s quite a startling confession, I’m not quite sure why you wrote that. Are you trying to help me prove my point ? You couldn’t have made my case any stronger when I said “I believe the main problem had been young voters.”

So at 28 years old you have never had the common sense to use your vote ? Couldn’t you have got someone to help you or at least tried to work things out for yourself ? There are many ways you can find out what each party stands for so you have little if any excuse. Also, I believe if you couldn’t be bothered to vote for what you think is right then you have no right to complain about the choice of party less lethargic people voted for.

University, and you don’t know how to pick a party to vote for !! What are they teaching you nowadays ? Oh don’t tell me “art student”. :lol:

Yes it is a shock leaving university isn’t it, did you really expect to be able to buy a house as soon as you left university !!

Yes and I can say it with more certainty and smugness than before thanks to you. People are going to think I have re-joined the forum under the pseudonym of Twenty Something to bolster my claims, geezz you can’t make this stuff up !! :D

Yes I am sure you are right as it appears you and your friends don’t vote !!

I think I am beginning to understand why you couldn’t work out who to vote for when you say “high life”.

Bizarrely, you have also contradicted yourself in the same post.

Which statement did you mean to write ?

Maybe you and your friends could have spared us all from this if only you had have voted. Perhaps when the next election comes around you may make the effort to get off you a$$ and drag your friends with you down to the polling station. Don’t worry they stay open quite late so you don’t have to get up early or anything.

I’ll tell you what Twenty Something thank you very much for your post, I was feeling quite low tonight but you have really cheered me up. I am certain the country’s future will be safe in your generation’s hands. :lol:

Now now boys!/girls?

It is a complete myth that Labour always ruins the economy and Tories save it. In the last 30 years it is probably even-stevens, if you judge economies by employment, disposable income and living conditions. The problem is that no government is ever particularly talented at running an economy, and in any case, western economies are almost entirely controlled not by governments but giant corporations.

The best governments are those who interfere with the minimum fuss in order to curb the excesses of unrestrained corporations and provide tangible improvements in the quality of life of its citizens. Punch and Judy Yah-boo arguments regarding economic mis-management of political parties is really a fruitless pastime....they are all as talentless as each other.

Why not focus attention on the large corporations who are doing the real damage, and that includes every bank in the Uk, who rip off their customers, have an active cartel in price fixing, become more and more remote from the people whose cash they abuse and treat their employees like dirt. THIS is what you should be concerned about, along with SOCIAL policy of governments which makes, or ruins, peoples' quality of life and access to justice.

VP

Totally agree -- the banks/moneylenders have cooked this one up - and they deserve to fall with it...

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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