Links 12/10/11

Food prices likely to remain high as corn supply lags Associated Press (hat tip Yasha Levine, who sent this as background)

Baptist priest in California convicted of molesting five girls McClatchy (hat tip Buzz Potamkin)

Yale, Harvard, Stanford … UC Irvine? Thomson Reuters (hat tip Buzz Potamkin)

European CEOs Move Cash to Germany In Case of Euro Breakup Bloomberg (hat tip reader furzy mouse)

Near-term risk to peripheral states remains Financial Times. John Authers thinks the lastest deal won’t keep the markets from boiling over before Christmas.

French bank ratings downgraded again by Moody’s BBC (hat tip reader furzy mouse)

The only way to save the eurozone is to destroy the EU Wolfgang Munchau, Financial Times

Tahrir: Between Dystopia and Utopia thedailynewsegypt (hat tip Lambert Strether)

The Private Insurance Market James Kwak (hat tip reader Carol B)

James Murdoch: I did not authorise Max Clifford phone-hacking settlement Guardian (hat tip Buzz Potamkin)

An Orange and Black Eye for 2 Banks New York Times (hat tip reader Aquifer)

Occupy @Home: The Kitchen Counterstrike Against Bank of America Raging Wisdom (reader 1 SK)

Trades Are Linked to Missing MF Global Funds New York Times

The Shriveling Middle Class In California Wolf Richter (hat tip reader Carol B)

Will Bull Connor please pick up the white courtesy phone? Lambert Strether. Today’s must read.

Antidote du jour:

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  1. aet

    I usually don’t suggest story links, but this one has all the elements:

    One of many interesting facts found therein:

    “….already the investigation has provided a window into yet another layer of corruption that took place amid the national housing boom and its subsequent hangover — a period that saw a surge in real estate malfeasance of every imaginable variety, including false loan applications, predatory lending schemes, illegal property flipping, equity skimming, and “air loans” (loans for property that doesn’t exist). According to FBI data, the number of suspicious activity reports related to real estate fraud filed by financial institutions jumped to 67,190 in 2009 from 6,936 in 2003.”

    1. Sleeper

      So my take away is the Feds can investigate and prosecute if they want to and if it is a relatively small time player.-
      Note that one of the charges was wire and mail fraud which is simple and easy to understand.

      Don’t expect to see Goldman, Citi, or the big boys in the docket though.

        1. LeonovaBalletRusse

          “THE BEST WAY TO ROB A BANK IS TO OWN ONE” by William K. Black — the enemy of fraud with earned advanced degrees in Economics and Law, Professor at University of Missouri at KC, U.S.A. Patriot-investigator for the eventual prosecution of numerous *banksters* for criminal fraud in the *Savings and Loan Scandal* of the 1980’s; blogs at and elsewhere.

          1. F. Beard

            Banks themselves are robbers since they depend on government violence (or the threat thereof) to enforce their money monopoly by which they rob the public of its purchasing power.

        2. Richard Kline

          More accurately, MacCruiskeen, if you heist someone (else) in the 1%, you’re in trouble. More accurately still, if you’re of the wrong color/ethnicity _and_ you heist someone (else) in the 1%, you’re in trouble. Madoff; the two insider trading indictees; ‘rogue trader’ of Nigerian extraction in London’s City: all tangled up with the law. If you heist those in the 99%, that’s not only business as usual, they give you a medal and a golden parachute, even if your shop was so crooked your chair had to be nailed down to keep from rolling out the door (e.g. Countrywide, AIG, the monolines, and many more).

          This was _very much_ what one saw in the late stage ancien regimes in Europe once the power of centralizing state governance began to outstrip the more dispersed legal system in the direct hands of local nobles. Nobles were not generally prosecuted by the state for reasons of class nobility _unless_ their crimes were against other major players of their class or the central authority’s prerogative. So again, we see the 1% as a nascent aristocracy, immune from ‘the common law.’ Conversely, said common law has been systemactially distorted in favor of the 1% in the now extraordinary penalties commonplace for those of the bottom 50%: permanent debt slavery for credit cards, student loans, and legalized loansharking; compulsory ‘arbitration’ in exceedingly corporation-friendly, unappealable kangaroo courts for consumer products, contracts, and transactions which are riddled with service denial-by-design and fraud; credit blacklisting by unappealable and arbitrary agencies working for the 1%; loss/despoilation of home or property by corporate polluters extractors disclosing little or none of the risks of their operations; decades in prision for trivial narcotics charges; assault by police officers with expensive legal recourse seldom bringing resolution. Expand that list as you wish.

          There is no rule of law in the USA at this point. There is a rule of privilege, and a misrule of law. This is what makes for revolution, folks.

    1. ambrit

      Dear SL;
      I am beginning to suspect that any photos and lists of participants of this meet and greet would end up in the Homeland Security Watch Files. Low key and under the radar seems the most prudent course just now.

    1. propertius

      Agreed – one of these days I’m going to arrange to be in New York for one of these NC soirées. Until then, vicarious experience will have to do for those of us here in “flyover country”.

  2. A Good Bankster

    Re: Trades Are Linked to Missing MF Global Funds New York Times

    Ha, ha. Yeah, right. The funds aren’t “missing”, they were stolen. They were stolen by Corzine and his associates at MF Global because they knew they could get away with it.

    I’m also looking into this rehypothecation business, as there appears to be no downside.

    If the goal is to defraud clients out of as much money as possible, then why go to the trouble of setting up complex instruments such as collateralized debt obligations squared, with funny names like Timberwolf?

    Yes, they succeeded in ripping off clients, but CDOs squared are such a pain in the ass.

    Why not just debit customer accounts directly, then call it some bullshit name like rehypothecation?

    This is so much easier and it leaves more time to spend on the golf course and yachting.

    Thank you Jon Corzine!

    1. LeonovaBalletRusse

      *Bankster*, it’s all coverup all the time. But this is petty-ante stuff when you consider the LARGER picture behind the individual crimes and small sets of crimes:

      Look for the Global 1% Reich Plan *writ L A R G E* in Michael Hudson’s fine, sober blog about what is happening now in Europe: “Europe’s Transition From Social Democracy to Oligarchy” – posted 7Dec2011 at New Economic Perspectives; and realize what has been happening to US, since U.S. *surplus population* has been *lumpened* in with all other *Third World* (=disposable) population.

      The Plan was implemented long ago.

      See: Jack London’s “THE IRON HEEL” for the LARGE Plan Redux.

      Why has it now come the *USA!USA!*? Because of *labor technology*-*robotic agents* for the 1%. The only reason human beings had any VALUE to the global 1% before was because only humans could *perform the labor (exert the energy)* required to satisfy the desires and needs of the 1%. This has changed, to continue exponentially.

      The *INFLECTION POINT* for the *1% Capital* to the *99% Labor/Energy* was reached some time ago, making most humans of the 99% *superfluous*. Actually, the OVERT declaration of this *Point of View* was expressed by Hitler during Holy Roman Reich III–when the *blood and soil for Aryans* Plan was accomplished through *Military Lebensraum*.

      As HUDSON avers, the Chicago economics putsch for 1% spoils via *Financial Lebensraum* put paid to the military version (so quaint). With *nation-states* ruined, the Global 1% Reich has been ordering spoils *Carte Blanche* through *Corporate* and *Blood* NOBILITY conjoined.

      For Capital/Labor as *Energy Economics* consult the strange piece (inner inconsistencies might be *tells* of *re-combined text*), “Silent Weapons for Quiet Wars” at

      Friends, countrymen at NC, make up your own minds, and please tell me: Is it game over? or not?

  3. Jim Haygood

    Thanks to Lambert Strether for the Boston Phoenix link. We’ve all seen the iconic photo of Bull Connor’s dawgs in front of the Jockey Boy restaurant. But I had no idea this fraught moment had been immortalized in sculpture in Birmingham.

    On the ‘police state’ theme … yesterday as I drove past a shopping center, a police officer was looking right at me, then promptly moved in behind me and pulled me over. When I handed over my papers, his attitude visibly brightened: ‘Oh, I see you have a drivers license in another state. The system shows your license in this state expired.’

    When he returned, I asked whether his patrol car was equipped with an automated license plate scanner. The answer was yes. Any license plate on a watch list is flagged immediately, in real time, accounting for his instant reaction as my vehicle approached.

    Last night, I was thinking over some larger implications. Automated license plate scanners are being installed at undisclosed fixed locations on major roads. Every vehicle which passes is logged, and the records are retained. Electronic toll passes also create logs.

    In a similar fashion, video cameras linked to digital facial images from drivers licenses and passports can recognize and log the movement of pedestrians. Meanwhile, cell phones continuously report their location.

    The technology is now in place to construct a virtual trajectory of a person’s life, detailing where they went every day. Email and phone records show who their social contacts are. Financial records (tax reporting, credit bureaus, electronic purchases) show their assets, their income, and how they spend it.

    A huge federal government server farm is being constructed in Utah, probably intended to store comprehensive profile data of this nature. In effect, it’s ‘Total Information Awareness’ by another name.

    When one considers the nature of other surveillance-obsessed states — for instance, former East Germany, Cuba and China, all with extensive webs of granular, neighborhood-based personal surveillance — the implications of large-scale automated data collection are rather chilling.

    Technology has increased personal freedom in some respects, but it has also enabled a vast, real-time surveillance web which no one can hide from. In what direction are these finely-balanced opposing forces headed? Should we be concerned?

    1. Eureka Springs

      Another server farm in Texas is planned/under construction. It’s mentioned in James Bamford’s book – Shadow Factory. We in Arkansas were forced to accept construction of an entire coal plant to power it this year.

      1. JohnH

        The panopticon society is very near. I’m not sure whether its better or worse for society for the government or business to be collecting the data.

      2. lambert strether

        This is a huge story, Eureka Springs. Can you elaborate with linky goodness?

        Is it really a one-server farm/one coal-plant ratio? That makes the climate change implications of the national security state pretty clear, yes?

        I remember back when Bush’s program of warrantless surveillance was ramping up, reading about brownouts in Baltimore because the NSA’s demands for power were so great.

        1. LucyLulu

          Me, too.

          While I don’t doubt the government is amassing ever increasing amounts of data on citizens, the dedication of a coal plant solely to power a server bank causes skepticism on my part. Yes, data server banks, for any purpose, require multiple sites to prevent data loss from natural disaster and other causes (think stock exchanges after 9/11, had all data backups been stored onsite). However, with servers having capacity in the terabytes and even petabytes, that’s a 1 with 15 zeroes or 50MB of data on each person in this country (plenty for 100 pg Word file with a few photos and sound files, couple videos, or backing up most of the entire Internet), the power needs of a server bank would not be on the scale of requiring its own dedicated electric power plant generation, and I would question why it would be located in a different state. I’m not an expert in the field of backup server power, however commercial sites use backup batteries, diesel generators, hook into military grids, etc. and common sense would say that needs would be more efficiently met by onsite generators of some sort. The largest power need might be that of keeping the environment cool, but some sites, e.g. University of Kentucky has remote servers in underground caves close to Kentucky River about 30 miles away, choose locations consistent with constant cool ambient temperatures.

  4. Sock Puppet

    Thank you for the corn links. Corn dominates US agriculture, accounting for 37% of arable land, and big ag dominates corn from Monsanto’s frankenseeds to the ethanol plants, export sales, feed lots and corn syrup plants, all the way to McDonald and the school cafeteria, subsidized all the way. It is the heart of an agriculture that produces nutrition bereft obesity inducing energy negative junk food grown by the rural poor to feed the urban poor and funnel your tax dollars to big ag.

  5. scraping_by

    And yet another Madoff – MF Global parallel.

    The media depicted most victims of Madoff’s Ponzi as wealthy east coast Jews who knew or should have known there was something fishy about eternal 10% returns. However, in _The Wizard of Lies: Bernie Madoff and the death of trust_ Diana B Henriques mentions, albeit in passing, that much of the money disappeared was from feeder funds. None of the feeder funds made any mention to their customers the ultimate goal of their money.

    Sometimes, it was workers’ pension funds both here and in Europe that bought into a feeder fund that bought into Madoff, keeping the scheme far away from consumer scrutiny. This led the Libertarian scorn for “losing and whining” ignoring what’s out of the workers’ control.

    Many of the customers of MF Global didn’t know they were customers of MF Global. They were customer of local businesses who used MFG as a wholesale clearing broker, depositing the money for futures transactions. They thought the money was going from the local business to custodians and clerks. Few if any would have knowingly financed Euro bond gunslingers.

    Bait and Switch is a sales technique of convincing the mark to buy the expensive upsell rather than the low margin attractor. What we have here is actually substitution fraud, selling one thing and delivering another. MFG may, as the writer thinks, have found a loophole to dive through. That depends on the character or lack of it in law enforcement.

  6. Ignim Brites

    The housing bubble in California has been building since the Vietnam War inflation began in the mid-60s. It might not take 40 years for it to deflate but probably will take 20. If China collapses though an influx of a few million Chinese refugees with several billions of dollars would halt the housing deflation. That’s about the best hope.

  7. R2P

    “an act which incites a lawful forceful response is unlikely to pass as expressive speech.” This is freefall. Subject US humans can’t get this totalitarian state under control. Only rival autocrats like Putin and Hu Jintao can stop this state. Repression and rights derogation are going to worsen until this country is exhausted by a big, catastrophic war. Might as well get it over with so the world can come in and impose rule of law.

    1. propertius

      As JFK said:

      Those who make peaceful revolution impossible will make violent revolution inevitable.

    2. R2P

      LBR, Martial law? Not necessarily. Having seen failed states get put back together, I think it doesn’t have to be that way at all. People need to be taught their human rights, as required by customary international law; officials need training in legal constraints and transparency. economies need to be reoriented to protect past victims, civil society has to be reconstituted. R2P has 3 pillars, though we only ever hear about America’s favorite pillar, war. Capacity building is the most important pillar, and that’s going on here now, for instance with the International Baccalaureate and UN NGO outreach. But our rogue state is not fully discredited yet, so external aid doesn’t get optimal traction.

    3. LucyLulu

      “an act which incites a lawful forceful response is unlikely to pass as expressive speech.”

      This is the part of the judge’s ruling that is most inflammatory and unlikely to hold up to scrutiny, IMO.

      Under his definition of “expressive speech”, the civil rights demonstrations and Vietnam War protests, nor the touted demonstrations in Tahrir square last winter, did not qualify as our democratically and Constitutionally protected 1st amendment free “expressive” speech, as they also incited an “(equally questionable) lawful forceful response”.

    1. CB

      Believe it’s a dachshund. There are nine varieties of dachy: smooth, long-haired, and wire-haired in standard, mini, and “kaninchen,” which I’d never heard of but that’s what wiki says. Kaninchen must be really diminutive.

      Can’t tell which size.

    2. LeonovaBalletRusse

      David, two commenters have suggested the Dachshund, but this seems incorrect. A Dachshund would have a longer, slimmer snout coming almost to a point at the nose/mouth, and the paws would be much slimmer and more delicate. Don’t you think so?

      Many Dachshund’s have this coloring, however.

      1. CaitlinO

        The only dachshund I knew personally belonged to my cousin. He would do anything for a bowl of beer and was the meanest drunk I’ve ever known.

        1. CB

          Short legs but watch out for those teeth. Don’t let the dwarf legs fool you. Dachshunds are known to be snappish, they were bred to hunt burrow animals and that pursuit is not for the fearful.

  8. Special Agents Flatweed and Borderline

    Bloomberg’s army continues its crackdown on cyclists.

    A quiet corner in Brooklyn became the scene of an unfortunate arrest by the NYPD after they stopped a cyclist for riding on the sidewalk, and ended up arresting a vocal bystander.

    Video uploaded to YouTube yesterday shows a cyclist on the corner of Claver Place and Putnam Avenue in Brooklyn in the company of an NYPD van, after being stopped for riding his bicycle on the sidewalk, part of the NYPD’s sustained crackdown on cyclists.

    Passersby good naturedly gave the Brooklyn scofflaw hard time. “Riding on the sidewalk, huh?” one asked. “You a grown man,” another told him, “you know that’s against the law!”

    An officer in the van took issue with this particular bystander, telling him to “mind your own business.” “I wasn’t even talking to you!” the boisterous witness responded. And with that, the officers hopped out of the van and approached, demanding, “give me some I.D.!” “Get your hands out of my face,” the bystander responded. “I’m gonna issue you a summons right now,” the officer continued. “A summons for what?” the bystander demanded to know. A call for backup is made, and …. the situation went from ridiculous to outrageous…

  9. LeonovaBalletRusse

    Lambert, thanks for the concise Bull Connor piece at Corrente. Alabama! what a history. Is it any wonder that the NOBILITY of the Olde Confederacy joined in common cause with that of the Viennese Waltzers, the German Rocket Scientists and DeutschesAuto wizards? *Blood and Soil*!

    EbbersMorality-Sports-AryanMoney back *Kultur Alabama*.

    Mobile-Huntsville-Birmingham: the *New World Nobility Nexus*

    Keep us posted.

  10. LeonovaBalletRusse

    “Yale, Harvard, Stanford … UC Irvine?”

    So, why is it that universities have tax-exempt status?

    This is another case of “privatizing gains and socializing losses” of the 1%.

    It’s not only *follow the money* but *follow the DNA* and the spheres of influence for private enrichment at public expense.

    In Louisiana (corporate/blood *Nobility* feudal state), one looks at the revealed names of the powerful, followed by the question: “What is your mother’s maiden name?” and so on up the genealogical chart. We the People/Citizens need to start asking these questions on the State, Federal, and Global levels, so we can get a bead on which 1% DNA sets are ruling what precincts and regimes.

    At UC Irvine, check out Chemerinsky’s key contacts: “I know a lot of judges and am known by a lot of judges.” We should have a DNA databank to tell us where Chemerinsky comes from and where the “judges” *come from*.

    And then, there are the *show me the money* DONORS (who deduct their *charitable giving* from their taxes without having to account for *benefits received* in exchange for the *gift*)– such as “Gibson Dunn & Crutcher” and the “Donald Bren Foundation.” Who are these people? Just where do they come from?

    The genealogy data base of the 1% needs to go back at least five generations, *revealing* all of those *maiden* names of the 1% power grid. It would be best if the charts went back to the *founding of the Republic*.

    Then, We the People/Citizens can engage in “la politique de Richelieu” as a NATIONAL sport, even as we are reduced to debt peonage, starvation, and thirst, while laughing ourselves to death. At least we will know who our 1% killers are, as we “face our executioners” at death. Hasn’t this been the *last right* of every doomed man in history?

    At this *endgame* stage, is there any alternative for us?

    Do you think I’m kidding?

        1. LeonovaBalletRusse

          scraping_by, thanks for the link. It’s a start. The real story IS about *blood and soil* any way you slice it. It’s those *known unknowns* that such as the WalkerBush Dynasty and The Russell Foundation for YALE and Poppy keep under wraps, *in the tomb* of the unknown soldiers, as it were.

          The DNA of the 1% is all, is all, is all.

          Jack London: “THE IRON HEEL” is *just the tip*.

      1. ambrit

        Perhaps the shade of George Lincoln Rockwell will give some sage advice from beyond the veil of tears. After all, the American Nazi Party was originally called the ‘World Union of Free Enterprise National Socialists.’

    1. LeonovaBalletRusse

      ambrit, to which one are you referring? Is it related to such “change we can believe in” as that of the regime of Cardinal Cody from New Orleans to Chicago, and the financial regime behind *Continental Illinois*?

      If you know *Louisiana Politics* to the bone, you know the real conspiracy that makes the world go round: The 1% and their profiteering gangsters against *the rest*.

      The TROLL on the 1% Reich payroll discredit truth tellers as *conspiracy theorists*, that’s their job, like the guys throwing punches and breaking glass (shades of Kristallnacht, their dream) at OWS encampments.

      And so, TROLLS, go “tell it to the troops,” not to us. Lyndon Larouche is for *useful idiots* just like YOU.

    2. ambrit

      Sorry to be obtuse. I didn’t mean Jekyll Island. As for Bretton Woods, aren’t those the famous “ghoul haunted woods” of Mauve Decade fame?
      Really now, doesn’t anyone remember a certain lot of pseudo-indigenes polluting the waters of Boston Harbour, and the extreme measures ensuing that got out of control? There has to be a tipping point somewhere. What is ours?
      As for La Louisianne, don’t forget Huey Long and “Every Man A King.”

  11. wunsacon

    Was there ever a “Don’t Ask, Don’t Tell” policy against kids admitting they’re “Christian” in public school? I.e., did any kid ever get thrown out of public school because he admitted to being Catholic, Protestant, Baptist, etc? If not, then Rick Parry’s comparison to the repeal of DADT in the military isn’t persuasive.

    1. prostratedragon

      Yes, for those who unfamiliar with the idioms, Baptists, like most American Protestants other than Episcopalians for sure and I think Lutherans (but don’t go by me there), have ministers, definitely not priests. “Preacher” is a popular and usually affectionate colloquialism for Baptists.

      I think the origin of the distinctions are in some serious
      differences of view among the denominations on how these officials relate to the church, its people, and the Divine, but had better just leave it there.

      1. LeonovaBalletRusse

        So why are these *religious institutions* still *tax-exempt*, leaving the taxpayers to foot the bill for priests, high priests of the *holy mysteries, and millionaire *ministers*/*preachers* of prosperity gospels?

        Why isn’t the *god* of each sect expected to provide for them instead? Don’t they believe that “God will provide?”

        Won’t their god lead the saved flock to pay for their own institutions/priests/highpriests/ministers/preachers?

        Their tax-exempt status betrays their lack of faith!

        1. mansoor h. khan


          That is why the “ideal” situation is a clergy-less religion.

          As soon as there is a paid clergy (people who don’t earn their own living directly from some skill or business) the religion WILL be compromised.

          Any religion with any kind of official “keepers of the truth” will always be compromised.

          The “keepers of the truth” should always be the general population which teaches each other and where people try to keep each other on track. Kind of like the “Open Source” movement. Like the internet (no center to it).

          mansoor h. khan

          Mansoor H. Khan

        2. ambrit

          Dear LBR;
          If I remember my Scripture aright, the New Testament prophets generally denounced economics as ungodly. The Old Testament bunch had their “Years of Jubilee.”
          A quick and succint anti-panygeric would be Frank Zappas’ “Heavenly Bank Account.”

    2. prostratedragon

      The article that CB linked to seems to use “priesthood” as an expression of certain behavior and obligations of all believers toward each other and the world. That concept of priesthood does not seem to be limited to the ordained, but then referring to Baptist “priests” would be to a larger and different class of people than referring to Baptist “ministers.”

      So from that article, any professed Baptist believer who did what the man in the news story was convicted of would have violated their priestly obligations by treating children that way. But the convicted minister, based on his professed beliefs, has an even heavier load from this because of his position as a minister and a pastor. His whole congregation is now in jeopardy, since Baptists are not centralized, but each congregation is responsible from calling its own pastor.

      (I was reared in the Congregationalist/UCC church, which is historically the Puritans, to the Baptists. We have a similar polity to the Baptists.)

  12. Jim Pivonka

    In re food prices and corn:

    Corn, by and large, is not food. It is animal feed. The only significant relationship between food prices and corn supply has to be through the price of animal feed – primarily beef, but also pork, fowl, and regrettably some fish. Except for the disaster of feeding corn to fish, the food price impact of corn supply is best mitigated by substitution of vegetables and fish for meat in the diet. That is a good thing. A lesser effect, on the price of corn starch derived sweeteners, would also have beneficial consequences.

    As cattle feed, the primary use for corn, the corn starch formerly used to produce ethanol was strictly a waste product. It has no or negative value as nutrition for ruminants. The separation, for use in producing ethanol, of corn starch from the protein and cellulose does not divert useable nutrition from the cattle feed/food chain. At all. Conversion of this waste product to ethanol is a gain, gross equal to net, net equal to gross. (If you’ve ever seen an old time hog operation where pigs were fed unswilled corn you know they don’t effectively use corn either.)

    Distillers grain is not a “by product” it IS the product useable by cattle as nutrition. Increases in the price of corn, the price of land used to grow corn, and the planting of corn relative to soy beans are the consequence of the waste product, corn starch, becoming an economically valuable product, as a source of ethanol. By increasing the overall production of and value of corn, other (nutrititive)components should increase in supply and prices drop. (That has happened in the cattle feed business, where the supply of distillers grain increased and prices dropped.)

    Much of the rest of the critique of ethanol subsidization remains valid, despite these basic facts. Cellulosic ethanol is, to me, even a worse boondoggle than it is to Pimentel. The fact that it is painted as desirable because of putative effects on feed & food which are essentially non-existent gives me a headache.

    1. Jim Pivonka

      At the top of the second paragraph, the phrase “the corn starch formerly used to produce ethanol was strictly a waste product” should read “the corn starch used to produce ethanol was formerly strictly a waste product.” My apologies.

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