Archive for 2017

The Amazon Effect: Retail Bankruptcies Surge 110% In First Half Of The Year

Courtesy of Zero Hedge

As Amazon flirts with a $500 billion market cap, letting Jeff Bezos try on the title of world's richest man on for size if only for a few hours, for Amazon's competitors it's "everything must go" day everyday, as the bad news in the retail sector continue to pile up with the latest Fitch report that the default rate for distressed retailers spiked again in July.

According to the rating agency, the trailing 12-month high-yield default rate among U.S. retailers rose to 2.9% in mid-July from 1.8% at the end of June, after J. Crew completed a $566 million distressed-debt exchange. Meanwhile, with the shale sector flooded with Wall Street's easy money, the overall high-yield default rate tumbled to 1.9% in the same period from 2.2% at the end of June as $4.7 billion of defaulted debt – mostly in the energy sector – rolled out of the default universe.

In a note, Fitch levfin sr. director Eric Rosenthal, said that “even with energy prices languishing in the mid $40s, a likely iHeart bankruptcy and retail remaining the sector of concern, the broader default environment remains benign."

He's right: after the energy sector dominated bankruptcies in the first half of 2016, accounting for 21% of Chapter 11 cases, in H1 2017 the worst two sectors for bankruptcies are financials and consumer discretionary.

And if recent trends are an indication, the latter will only get worse as Fitch expects Claire’s, Sears Holdings and Nine West all to default by the end of the year, pushing the default rate to 9%. "The timing on Sears and Claire’s is more uncertain, and our retail forecast would end the year at 5% absent these filings," Rosenthal wrote.

Putting the retail sector woes in context, Reorg First Day has calculated that retail bankruptcies soared 110% in the first half from the year-earlier period, accounting for $6 billion in debt.

The list includes name brands such as Gymboree, Payless, rue 21 and the Limited, all of which cited the Amazon affect as a contributor to their downfall.

“Many retailers have echoed the familiar cries of those that filed


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“You’re Fired” Trump’s Amazing Presidential Track Record

Courtesy of Mish.

Before becoming president, Donald Trump had a very popular television program whose main appeal was the popular phrase “You’re Fired!”

As president, Trump set an amazing record setting pace of firing top level officials or having them leave just before being fired.

Clearly, Trump knows how to fire. He also knows how to provoke officials to resign. Let’s recap.

Please consider Casualties of the Trump Administration So Far

  1. Reince Priebus, the former White House chief-of-staff, resigned just six months into his tenure after a public feud with Anthony Scaramucci, the White House communications director.
  2. Sean Spicer, the embattled White House press secretary, resigned on Friday after telling Trump he vehemently disagreed with the selection of Anthony Scaramucci as White House communications director.
  3. Michael Dubke, the former White House communications director, resigned in May. Dubke was replaced by Anthony Scaramucci, the founder of a hedge fund and a top Trump donor.
  4. Walter Shaub, the former director of the Office of Government Ethics, resigned earlier this month after clashing with the White House over Trump’s complicated financial holdings. Shaub called Trump’s administration a “laughingstock,” following his resignation, and advocated for strengthening the US’s ethical and financial disclosure rules, per The New York Times.
  5. Trump fired James Comey as FBI director in May.
  6. Former National Security Advisor Michael resigned in February after serving in the position for less than a month. Flynn misled Vice President Mike Pence and other administration officials about the contents of his phone conversations with Sergey Kislyak, Russia’s ambassador to the US. Flynn reportedly discussed the Obama administration’s sanctions against Russia with Kislyak prior to Trump assuming office.
  7. Trump fired Sally Yates, the acting attorney general and an appointee of former President Barack Obama, just ten days after assuming office. Yates had refused to uphold the Trump administration’s controversial travel ban in January.
  8. Trump fired Preet Bharara, the former US Attorney for the Southern District of Manhattan and ‘Sheriff’ of Wall Street, in March after Bharara refused to submit a resignation letter to Attorney General Jeff Sessions.
  9. Katie Walsh, the former deputy chief of staff and close ally to chief of staff Reince Priebus left the White House just nine weeks into the job to run America First, a pro-Trump group outside of the government.

What Does


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Investing And Knowledge

By Investing Caffeine. Originally published at ValueWalk.

By Investment Master Class

“.. it seems that neither of us knows anything great, but he thinks he knows something when he does not, whereas when I do not know, neither do I think I know. So it seems I am wiser than he in this one small thing, that I do not think I know what I do not know.” Socrates

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CC Master Class Invest – with permission

“Ask yourself and your analysts what isn’t known.  By doing so, you can get a better feel for the inefficient side of the market as well as the degree of uncertainty affecting the situation”  Bennett Goodspeed 1978

“Acknowledging what you don’t know is the dawning of wisdom” Charlie Munger

Knowing what we don’t know is better than thinking we know what we don’t” Philip Tetlock

“There are a lot of things you don’t know.  You’ve got to be aware of that.  Be honest about what you don’t know”  Bruce Kovner

“We’re blind to our blindness. We have very little idea of how little we know.  We’re not designed to know how little we know.”   Daniel Kahneman

“What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know” Warren Buffett

“The ability to deal with not knowing is far more powerful than knowing.  That is because there’s way more that we don’t know than we could possibly ever know


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Overworked, Underpaid, & Overweight

Courtesy of Zero Hedge

It's a triple-whammyAmericans are overworked, Americans are underpaid, and, now, potentially as a result of these, Statista's Isabel von Kessler writs that Americans are overweight - over 2 in 5 American workers have put on pounds at their present job.

A survey by Harris Poll on behalf of CareerBuilder, asked workers what they thought contributed most to weight gain at their current workplace.

At least 51 percent thought sitting at a desk most of the day was the main reason.

Infographic: Why American Workers Gain Weight | Statista

You will find more statistics at Statista

While sports could counterbalance the desk jobs, 45 percent stated they were too tired to exercise after returning home. 38 percent blamed stress-related eating for increasing pounds.

Accordingly, 25 percent of all workers say they've gained more than 10 pounds at their present job, while 1 in 10 gained more than 20 pounds.

Houston is the city with the highest share of weight gaining workers (57 percent), Washington D.C. follows suit (50 percent) and Dallas comes third (47 percent).





Mauldin: One Of These 3 Black Swans Will Likely Trigger A Global Recession By End Of 2018

Courtesy of John Mauldin, Mauldin Economics 

Exactly 10 years ago, we were months way from a world-shaking financial crisis.

By late 2006, we had an inverted yield curve steep to be a high-probability indicator of recession. I estimated at that time that the losses would be $400 billion at a minimum. Yet, most of my readers and fellow analysts told me I was way too bearish.

Turned out the losses topped well over $2 trillion and triggered the financial crisis and Great Recession.

Conditions in the financial markets needed only a spark from the subprime crisis to start a firestorm all over the world. Plenty of things were waiting to go wrong, and it seemed like they all did at the same time.

We don’t have an inverted yield curve now. But when the central bank artificially holds down short-term rates, it is difficult if not almost impossible for the yield curve to invert.

We have effectively suppressed the biggest warning signal.

But there is another recession in our future (there is always another recession), which I think will ensue by the end of 2018. And it’s going to be at least as bad as the last one was in terms of the global pain it causes.

Below are three scenarios that may turn out to be fateful black swans. But remember this: A harmless white swan can look black in the right lighting conditions. Sometimes, that’s all it takes to start a panic.

Black Swan #1: Yellen Overshoots

It is clear that the US economy is not taking off like the rocket some predicted after the election:

  • President Trump and the Republicans haven’t been able to pass any of the fiscal stimulus measures we hoped to see.
  • Banks and energy companies are getting some regulatory relief, and that helps; but it’s a far cry from the sweeping healthcare reform, tax cuts, and infrastructure spending we were promised.
  • Consumer spending is still weak, so people may be less confident than the sentiment surveys suggest. Inflation has perked up in


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WTI Jumps Above $50 On Report US Prepping Sanctions Against Venezuela Oil Industry

Courtesy of ZeroHedge. View original post here.

After both Brent and WTI rose above their respective 50DMAs on Friday, capping 2017's best weekly rally for oil, the rising tide is accelerating as the latest CFTC COT data confirmed, when net specs boosted bullish Nymex WTI crude oil bets by 27K net-long positions to 423K, the highest in two months, as producers continued to cover short hedges, sending their net position to the most bullish since the summer of 2015.

Meanwhile, oil started the Sunday session jumping out of the gate, with WTI rising above $50 for the first time since May in early Asian trading, following the usual non-material weekend chatter and "noise" out of OPEC (which to exactly nobody's surprise "can't stop pumping"), however what has attracted traders' attention, is a WSJ report that following last week's latest round of sanctions, and after today's vote to overhaul Venezuela's constitution further entrenching Maduro's unpopular regime, US government officials are considering announcing sanctions against Venezuela's oil industry as early as Monday, although as the WSJ notes, a full-blown "embargo against Venezuelan crude oil imports into the U.S. is off the table for now."

In its latest escalation, last Wednesday the U.S. government levied additional sanctions on 13 high-ranking Venezuelan officials for alleged corruption, human-rights violations and undermining democracy in the South American country. On Friday Mike Pence vowed “strong and swift economic actions” if the vote goes ahead.

While Maduro's government has responded defiantly, "dismissing sanctions and warnings from Washington", with Maduro insisting the government would notch a triumph in Sunday’s vote, the potential collapse in oil trade between Venezuela could crippled the country even more, while sending the price of oil sharply higher.

In fact, in a note from last week posted here, Barclays Warren Russell explains just what will happen should Trump expand Venezuela's sanctions to impact its oil sector: "a sharper and longer disruption (eg, exceeding three months) could raise oil prices at least $5-7/b and flatten the curve structure despite an assumed return of some OPEC supply, a more robust US shale response, and weaker demand. It may be just the opportunity OPEC needs to exit its current strategy. US producer


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Tech At Support. Small Caps Struggle

Courtesy of Declan.

After Thursday’s selling there was more downside on Friday which put further pressure on support. The indices best placed to take advantage were the Nasdaq and Nasdaq 100.

The Nasdaq touched 6,350 support for the second day in a row. Selling volume was down on Thursday’s but as selling didn’t violate Thursday’s low there is an opportunity for an aggressive long. However, day’s like Friday aren’t typically bullish but until the market proves otherwise the risk:reward isn’t too bad for bulls.

Buyers of the Nasdaq can set stops below 6,335. Technicals are bullish. An opportunity to take a chance?

The Nasdaq 100 is at rising support with a stop on a loss of 5,865.

The Semiconductor Index is trading inside the wide bearish engulfing pattern from Thursday. There is a ‘sell’ trigger in the CCI along with a loss in relative performance against the Nasdaq 100. The convergence of 20-day and 50-day MAs is an opportunity for bulls to counter the trend. Bears now have two bearish engulfing patterns which makes 1,020 a key support level.

The S&P was relatively resistant to Friday’s selling. There was a ‘sell’ trigger in On-Balance-Volume but it hasn’t tested support. On the good news front there was an improvement in relative performance against Small Caps.

Speaking of Small Caps, the index is caught between a loss of rising support and 1,430 support. There was a ‘sell’ trigger in the MACD to go with the break. The 20-day MA is also available to play as a source of demand. However, a loss of 1,420 would drop the index back inside the earlier sideways consolidation and open up for yet another test of 1,345. The early part of next week will be important.

Bearish metrics can be found elsewhere. The relationship between the Transport Index and the Dow Jones has moved to a breakdown after 18 months of consolidating. This is a worrying development as it suggests the economy is about to take a step down – which…
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JPM: “Investors Are Starting To Hedge Against A Crash”

Courtesy of ZeroHedge. View original post here.

It's probably not a coincidence that in the same week in which one of the most level-headed investors of all, Oaktree's Howard Marks issued an alarm on the current state of the market, that JPM has come out with not one (as discussed previously, Marko Kolanovic's latest "tipping point" note last Thursday was blamed for the small and sharp selloff at the end of last week), but two reports in which JPMorgan makes it clear that not only is the market on the edge, but increasingly more traders, both institutional and equity, are getting ready for what comes next.

First, as another reminder, these are the 4 bullet points with which Marks summarized the current investing environment:

  • The uncertainties are unusual in terms of number, scale and insolubility in areas including secular economic growth; the impact of central banks; interest rates and inflation; political dysfunction; geopolitical trouble spots; and the long-term impact of technology.
  • In the vast majority of asset classes, prospective returns are just about the lowest they’ve ever been.
  • Asset prices are high across the board.  Almost nothing can be bought below its intrinsic value, and there are few bargains. In general the best we can do is look for things that are less over-priced than others.
  • Pro-risk behavior is commonplace, as the majority of investors embrace increased risk as the route to the returns they want or need.

One day later, Kolanovic added fuel to the fire, warning that with volatility at record lows, the upcoming mean-reversion will leave many in ruin, and that while there is still time to get out of the market, "we may be very close to the turning point":

"In what is akin to the law of ‘communicating vessels,’ once inflows in bonds stop, funds are likely to start leaving other risky assets as well, including equities. The FOMC statement yesterday alleviated immediate fears – normalization of balance sheet will start ‘relatively soon,’ but only if ‘the economy evolves broadly as anticipated.’ This reasonably dovish stance pushes this market risk out for a few weeks (the next ECB meeting is Sep 7th, Fed Sep 20th, BoJ Sep 21st). This gives volatility sellers and


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Rome’s Transport System Faces “Meltdown,” On Brink Of Collapse

Courtesy of ZeroHedge. View original post here.

New York City’s deteriorating subway has a rival for world’s most dysfunctional public transportation system. After only three months on the job, Bruno Rota, the head of Rome’s public-transit company has announced that he's leaving his post, saying that the Italian capital city’s decaying transportation system should declare bankruptcy, according to Reuters.

Rota’s departure is an embarrassment for the anti-establishment five-star movement and one of its most high-profile politicians, Rome Mayor Virginia Raggi. Since taking office last year, Raggi’s administration has been paralyzed by internal tumult while the city’s infrastructure has continued to decay. The party’s failures in Rome suggest that it’s not prepared to govern, and may have contributed to Five-Star’s losses in a series of municipal elections last month. Meanwhile, the situation could hurt the party’s chances in next year’s general election.

Rome Mayor Virginia Raggi

“Bruno Rota quit Atac on Friday, just three months after taking charge of the Italian capital's bus, metro and tram network, saying he was unable to salvage the firm and feared possible legal action tied to any eventual collapse.

"It is an appalling scandal," said Rota, who was called down to Rome after helping to turn around the transport system in the northern city of Milan. "The situation is worse than you can imagine," he told la Repubblica newspaper.

Rota's dramatic departure has triggered yet another crisis for the city's 5-Star administration, which won power last year in what was seen as a litmus test of whether the anti-establishment group was ready to run Italy.”

City officials are publicly criticizing Raggi, saying that Rome needs a “change in direction" after the city nearly adopted water rationing laws last week amid a worsening drought.

"We need a change of direction. If we carry on like this we will fall apart. The whole city will fall apart," Andrea Mazzillo, Rome's third budget chief in a year, told la Repubblica.

In a statement on Facebook, Raggi ordered her team to stop complaining and promised to sort out problems at Atac, which has suffered from many years of chronic neglect and mismanagement.

The company has some 1.3 billion euros ($1.5 billion) of


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Meet “Aida”, the Perfect Banker (and a Robot): End of Branch Banks Coming

Courtesy of Mish.

Sweden’s biggest banks are on a mission to get rid of branch banks and all the branch bank employees too.

That’s where “Aida” comes in. She’s available 24/7 and supposedly can handle all but your most complex needs. Your Banker, Aida Is Always In.

Aida is the perfect employee: always courteous, always learning and, as she says, “always at work, 24/7, 365 days a year.”

Aida, of course, is not a person but a virtual customer-service representative that SEB AB, one of Sweden’s biggest banks, is rolling out. The goal is to give the actual humans more time to engage in more complex tasks.

After blazing a trail in online and digital banking, Sweden’s financial industry is now emerging as a pioneer in the use of artificial intelligence. Besides Aida at SEB, there’s Nova, which is a chatbot Nordea Bank AB is introducing at its life and pensions unit in Norway. Swedbank AB is adding to the skills of its virtual assistant, Nina. All three are designed to sound like women, based on research suggesting customers feel more comfortable with female voices.

“Basically all banks are closing branches,” Mattias Fras, head of Robotics, Strategy and Innovation at Nordea, said in a phone interview. “This is a way to return to full service again.

Swedish banks have already seen their customer satisfaction scores drop to a 20-year low after shutting branches and pushing people onto online services.

Satisfaction Slump

Fastest Way to Full Services

As banks closed branches customers satisfaction dove. Obviously, this is one of those cases where if it doesn’t work, you need to do more of it.

The fastest way to get to full services is to get rid of all the employees. Well not quite all of them, just those Aida, Nova, and Nina cannot handle.

“The goal is to give the actual humans more time to engage in more complex tasks.”


Continue reading here…





 
 
 

ValueWalk

#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...



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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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