how American society unravelled


By Patrick   Follow   Sun, 23 Jun 2013, 3:54pm   5,068 views   323 comments
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http://www.guardian.co.uk/world/2013/jun/19/decline-fall-american-society-unravelled

Youngstown, Ohio, was once a thriving steel centre. Now, the industry has all gone and the city is full of abandoned homes and businesses. Photograph: Brian Snyder/Reuters In or around 1978, America's character changed.

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  1. iwog


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    284   9:48pm Tue 25 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    And that boys and girls is what the psychologists call projecting, what normal people call don't throw rocks if you live in a glass house

    Nope. That makes you feel better, however the reality is very simple. You blame the House of representatives entirely for actions approved by Reagan and passed by the Republican majority in the Senate. It is EVERY BIT as fucking stupid as blaming Republicans in the House TODAY for all the actions of the Obama administration.

    This folks is insanity defined. It is total proof that we're dealing with a religious cult and not having an actual conversation.

  2. indigenous


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    285   9:55pm Tue 25 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    indigenous says

    And that boys and girls is what the psychologists call projecting, what normal people call don't throw rocks if you live in a glass house

    Nope. That makes you feel better, however the reality is very simple. You blame the House of representatives entirely for actions approved by Reagan and passed by the Republican majority in the Senate. It is EVERY BIT as fucking stupid as blaming Republicans in the House TODAY for all the actions of the Obama administration.

    This folks is insanity defined. It is total proof that we're dealing with a religious cult and not having an actual conversation.

    Show me the numbers

  3. Bellingham Bill


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    286   10:43pm Tue 25 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    By far the biggest spending program in the 1980s was Star Wars. It was Reagan's baby, not the Democrats.

    http://research.stlouisfed.org/fred2/graph/?g=jKA

    shows how DOD spending growth (red) overtook fed ex-DOD spending (blue).

    Bush-Clinton cut that back but the geniuses running things 2001-2006 had other ideas.

  4. adarmiento


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    287   2:15am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    By far the biggest spending program in the 1980s was Star Wars.

    Give us proof that this is true.

  5. indigenous


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    288   7:33am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    It is EVERY BIT as fucking stupid as blaming Republicans in the House TODAY for all the actions of the Obama administration.

    The house Republicans are starting to do good by slowing the spending. Just like Gingrich did with Clinton (who would have spent too much also). The trouble came from the Pelosi years.

    Bellingham Bill says

    shows how DOD spending growth (red) overtook fed ex-DOD spending (blue).

    Bush-Clinton cut that back but the geniuses running things 2001-2006 had other ideas.

    Ok it appears he did increase spending on defense. But to be fair it was following a decrease in spending from Carter and less spending from the Vietnam war.

    With Carter are defenses were low, remember how long Iranians had the hostages. The only thing I remember Reagan doing was when they proved Gaddafi was behind the Pan Am bombing, he went after Gaddafi immediately and it was done. Point is that between stopping Vietnam and Carter are defenses were low. There was a cold war going on. I don't know if this is what broke up the USSR but it helped.

  6. marcus


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    289   7:41am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    With Carter are defenses were low, remember how long Iranians had the hostages.

    Yes, if our government gifts to the military industrial complex had only been higher, Iran wouldn't have dared to fuck with us. Or maybe we would have known to invest in more special forces.

    Special forces were unfortunate (unlucky ?) in their helicopter attempt, which obviously reflected on the commander in chief. More money would have made all the difference.

  7. tatupu70


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    290   7:43am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    The house Republicans are starting to do good by slowing the spending. Just like Gingrich did with Clinton (who would have spent too much also). The trouble came from the Pelosi years.

    So how exactly can you tell if it's the President, the Senate, or the House that is doing the spending?

    I'm just kidding--I know the answer.

  8. deepcgi


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    291   7:44am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    We are all too calm over the derivatives time bomb. Rising interest rates could absolutely destroy credit as we understand it. No one knows for certain what happens when hundreds of trillions in bets are lost, but it will surely not be solved with action by the Fed.

  9. Reality


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    292   7:59am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    So you're taking a future prediction (which will be wrong) and claiming it represents current market action.

    Nice work. Could you possibly destroy your own credibility any further?

    Someone apparently spent too much time studying a board game to notice what's been happening to stock markets and bond markets around the world. News flash: stock markets and bond markets are much more than the 3 indices that you hear on NPR in a 15-second summary every evening.

    While this is not a prediction per se, the emerging markets and bond markets do have a history of being leading indicators.

  10. indigenous


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    293   8:00am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    marcus says

    More money would have made all the difference

    Defense is a legitimate part of our government. But it is still IMO cronyism with the defense contractors which is no better than the public union you belong to.deepcgi says

    We are all too calm over the derivatives time bomb. Rising interest rates could absolutely destroy credit as we understand it. No one knows for certain what happens when hundreds of trillions in bets are lost, but it will surely not be solved with action by the Fed.

    My understanding is the whole OTC derivative thing is just something the media uses to sell newspapers. It is not a threat because the traders have to post collateral daily. E.G. Lehman brothers owed a bunch of money because of derivative exposure, the reality though was that the final settlement was maybe 20 million, because they have to post collateral.

    Additionally companies use derivatives as insurance so that the actual exposure is low.

    What is more likely is that someone in government wants to regulate something that regulates itself already.

  11. thomaswong.1986


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    294   8:32am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    Additionally companies use derivatives as insurance so that the actual exposure is low.

    Yes, even the print media uses derivatives to ensure paper costs dont go up.
    But even journalists have become disconnected to many aspects how industries and economies work.

  12. thomaswong.1986


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    295   8:42am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    How do you know?

    And why do you blame Tip O'Neil? By far the biggest spending program in the 1980s was Star Wars. It was Reagan's baby, not the Democrats.

    You just love faking up history don't ya.

    you might wanna brush up on your history... SDI didnt take off like you have
    concluded.

    http://en.wikipedia.org/wiki/Strategic_Defense_Initiative

    Under the administration of President Bill Clinton in 1993..... (read on)

  13. mdovell


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    296   8:58am Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Eh...

    SDI like many programs was thought under one administration and then enacted during another.

    Sometimes funding can hold things tightly. For example JFK made the Peace Corp from executive funding. So the next year they pretty much blackmailed congress to fund it otherwise they'd be laying people off and creating bad relations.

    Not to praise Carter by any means but what he did and what he looked like were two different things.

    He deregulated the airlines
    He deregulated the trucking industry (even Reagan was against it)
    He deregulated the rail industry.

    Stealth bomber came out under him
    FEMA started under him.

    Carter doctrine stated that the USA would go to war for energy. This was cited by Dick Cheney during the first gulf war!

    In addition that soviet invasion of Afghanistan was actually provoked by the USA.
    http://williamblum.org/essays/read/how-the-us-provoked-the-soviet-union-into-invading-afghanistan-and-starting

    "Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the president in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention."

    "Brzezinski: Regret what? That secret operation was an excellent idea. It had the effect of drawing the Russians into the Afghan trap and you want me to regret it? The day that the Soviets officially crossed the border, I wrote to President Carter, in substance: We now have the opportunity of giving to the USSR its Vietnam war. Indeed, for almost 10 years, Moscow had to carry on a war unsupportable by the government, a conflict that brought about the demoralization and finally the breakup of the Soviet empire."

    "Question: And neither do you regret having supported the Islamic fundamentalists, having given arms and advice to future terrorists?

    Brzezinski: What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the cold war"
    To note this was published back in 1998!

  14. Bellingham Bill


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    297   12:13pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Brzezinski is an evil shitheel

  15. Bellingham Bill


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    298   12:16pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    With Carter are defenses were low

    http://research.stlouisfed.org/fred2/graph/?g=jLM

    Defense spending increased 25% under Carter.

  16. APOCALYPSEFUCKisShostikovitch


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    299   12:17pm Wed 26 Jun 2013   Share   Quote   Permalink   Like (1)   Dislike  

    What's for dinner?

    FACE!

  17. Bellingham Bill


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    300   12:20pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    deepcgi says

    Rising interest rates could absolutely destroy credit as we understand it.

    this is true, actually, and why rates can't rise.

    http://research.stlouisfed.org/fred2/graph/?g=jLO

    blue is systemic debt leverage (not counting finance sector)

    red is prime rate

  18. Bellingham Bill


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    301   12:24pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    Lehman brothers owed a bunch of money because of derivative exposure, the reality though was that the final settlement was maybe 20 million, because they have to post collateral.

    their collateral was crap.

    http://research.stlouisfed.org/fred2/graph/?g=jLP

    shows when housing crashed there was a $6T debt overhang, with hundreds of billions of losses to be distributed (individually) to many, many financial firms.

    AIG, C, BAC, LEH, MS, etc etc.

    Nobody had the capital to cover these bad bets.

  19. indigenous


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    302   12:29pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    Nobody had the capital to cover these bad bets.

    Are you saying that they did not have to post collateral?

  20. indigenous


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    303   12:34pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    indigenous says

    Are you saying that they did not have to post collateral?

    They all bought insurance against defaults. Except they all bought that insurance from the same company so if that company went bankrupt and couldn't pay, the insurance was worthless. Have you heard of AIG?

    You are talking about mortgage default insurance, which is different

  21. iwog


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    304   12:39pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    You are talking about mortgage default insurance, which is different

    No he's talking about credit default swaps.

  22. indigenous


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    305   12:46pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    indigenous says

    You are talking about mortgage default insurance, which is different

    No he's talking about credit default swaps.

    Tatpu

    Was talking about AIG, not credit default swaps

  23. tatupu70


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    306   12:52pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    Tatpu


    Was talking about AIG, not credit default swaps

    I deleted the comment because I realized that it was a bit off-topic but you must have replied before I did.

    AIG is credit default swaps though.

  24. iwog


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    307   12:53pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    Was talking about AIG, not credit default swaps

    You're very confused. AIG got taken down because they wrote credit default swaps on bad mortgages. There was no collateral and they were nothing more than casino bets.

    http://www.reuters.com/article/2008/09/18/us-how-aig-fell-apart-idUSMAR85972720080918

  25. APOCALYPSEFUCKisShostikovitch


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    308   12:54pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Yes, without that instrument, the market would never have scaled the way it did.

  26. Bellingham Bill


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    309   3:07pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Mish was on this a long time ago:

    "Unfortunately we can’t start cutting interest rates just yet because we are also frightened by the massive speculation in the financial markets with stock buybacks, mergers, leveraged buyouts, and trillions of dollars in derivatives floating around some of which we do not even know who the ultimate guarantor is. We are hoping but do not know that the ultimate guarantor of these derivatives is not Madame Merriweather's Mud Hut in Malaysia."

    http://globaleconomicanalysis.blogspot.com/2006/12/email-from-bernanke.html

  27. indigenous


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    310   6:27pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    AIG got taken down because they wrote credit default swaps on bad mortgages. There was no collateral and they were nothing more than casino bets.

    My understanding is that they had to post collateral and that they do hedge. One of yous is wrong?

  28. Bellingham Bill


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    311   7:32pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    My understanding is that they had to post collateral

    . . .

    AIG DID NOT HAVE THE CASH TO PAY OFF THE BAD SWAPS THEY HAD WRITTEN.

    AIG WAS WHAT EVERYONE WAS HEDGING THEMSELVES *WITH*.

    AIG WAS MISH'S MUD HUT.

    "AIG was one of the largest purveyors of credit default swaps, or CDSs, during the financial crisis. At one point, it had written $79 billion worth of CDSs on pools of mortgage-backed securities, or credit default obligations, according to the FCIC."

    http://money.cnn.com/2011/01/27/news/companies/goldman_sachs_fcic/index.htm

    According to the regulatory regime of the era, Wall Street were mature individuals and able to regulate themselves.

    "The report also cites AIG’s success in setting up its financial products unit in London and selecting a weak U.S. regulator, the Office of Thrift Supervision, as contributing to the firms’ failure.

    "Because of the deregulation, state regulators were barred from regulating AIG’s credit default swaps, even though they were similar to insurance contracts. If that deregulation, which began under the Clinton Administration, had not happened, the commission suggests that events might have been different."

    http://www.insurancejournal.com/news/national/2011/01/27/182186.htm

    "The Commission concludes AIG failed and was rescued by the government primarily because its enormous sales of credit default swaps were made without putting up initial collateral, setting aside capital reserves, or hedging its exposure—a profound failure in corporate governance, particularly its risk management practices.

    "AIG’s failure was possible because of the sweeping deregulation of over-the-counter (OTC) derivatives, including credit default swaps, which effectively eliminated federal and state regulation of these products, including capital and margin requirements that would have lessened the likelihood of AIG’s failure. The OTC derivatives market’s lack of transparency and of effective price discovery exacerbated the collateral disputes of AIG and Goldman Sachs and similar disputes between other derivatives counterparties. AIG engaged in regulatory arbitrage by setting up a major business in this unregulated product, locating much of the business in London, and selecting a weak federal regulator, the Office of Thrift Supervision (OTS)."

    More about the OTS:

    http://articles.washingtonpost.com/2008-11-23/politics/36881444_1_office-of-thrift-supervision-regulators-ots

  29. Blurtman


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    312   7:35pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Hanky Panky. Brilliant strategy. Issue toxic MBS. Tell everyone you sell them to what a great deal they are. Triple A. You know how shitty they really are, so you take our CDS on them. You make billions from selling this toxic shit. You make billions when the toxic shit hits the fan, from the CDS you bought on the toxic shit. But AIG, who is on the other side of the CDS, is bled dry and cannot pay. You want your damn blood money. So you pick up the phone and call your buddy Hank, who has since left Goldman Sachs, after engineering this strategy, and is in the perfect spot to demand that the dopey taxpayer bail out AIG so you can collect.

    And this is why we need to start killing the bankers.

  30. Bellingham Bill


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    313   7:43pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Kill is such a strong word . . .

    Just stop borrowing money from them.

  31. indigenous


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    314   8:21pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    "AIG’s failure was possible because of the sweeping deregulation of over-the-counter (OTC) derivatives, including credit default swaps, which effectively eliminated federal and state regulation of these products, including capital and margin requirements that would have lessened the likelihood of AIG’s failure.

    My understanding is that Glass Steagal never did regulate OTC derivatives. Me still thinks there is some propaganda to this.

  32. indigenous


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    315   8:23pm Wed 26 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    Blurtman says

    And this is why we need to start killing the bankers.

    Bankers don't pretend to be anything other than what they are, the treason comes from the goverment. The force comes from the government which we desperately need to put a few head on display on the beltway.

  33. tatupu70


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    316   4:11am Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    My understanding is that Glass Steagal never did regulate OTC derivatives. Me
    still thinks there is some propaganda to this.

    Any posts from indignenous that begin with, "My understanding is..." are BS. I'm becoming more and more convinced of his trollishness.

  34. indigenous


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    317   4:52am Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    indigenous says

    My understanding is that Glass Steagal never did regulate OTC derivatives. Me

    still thinks there is some propaganda to this.

    Any posts from indignenous that begin with, "My understanding is..." are BS. I'm becoming more and more convinced of his trollishness.

    Ad Hominem indicates you don't know. It doesn't fit with the bankster meme.

  35. tatupu70


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    318   5:09am Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    Ad Hominem indicates you don't know. It doesn't fit with the bankster
    meme.

    I do know. Bill already posted two sources to prove it.

  36. indigenous


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    319   5:10am Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    I do know.

    I don't think so

  37. tatupu70


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    320   5:26am Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    tatupu70 says



    I do know.


    I don't think so

    lol--how about you actually post something that confirms your "thoughts"? Your opinion would be much more persuasive if you had some data to back it.

  38. indigenous


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    321   6:20am Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    lol--how about you actually post something that confirms your "thoughts"? Your opinion would be much more persuasive if you had some data to back it.

    The pot calling the kettle black...

    In the early 1980s commercial banks began entering into interest rate and currency exchange “swaps” with customers. This “over-the-counter derivatives” market grew dramatically throughout the 1980s and 1990s.[175]

    In 1996 the OCC issued “guidelines” for national bank use of “credit default swaps” and other “credit derivatives.” Banks entered into “credit default swaps” to protect against defaults on loans. Banks later entered into such swaps to protect against defaults on securities. Banks acted both as “dealers” in providing such protection (or speculative “exposure”) to customers and as “hedgers” or “speculators” to cover (or create) their own exposures to such risks.[176]

    Commercial banks became the largest dealers in swaps and other over-the-counter derivatives. Banking regulators ruled that swaps (including credit default swaps) were part of the “business of banking,” not “securities” under the Glass–Steagall Act.[177]

    Commercial banks entered into swaps that replicated part or all of the economics of actual securities. Regulators eventually ruled banks could even buy and sell equity securities to “hedge” this activity.[177] Jan Kregel argues the OCC’s approval of bank derivatives activities under bank “incidental powers” constituted a “complete reversal of the original intention of preventing banks from dealing in securities on their own account.”[128]

    From this:

    https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act

  39. indigenous


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    322   7:49pm Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    lol--how about you actually post something that confirms your "thoughts"? Your opinion would be much more persuasive if you had some data to back it.

    Oh I want to see some backup

    Oh he produces it, uh oh all just go silent.

  40. Rew


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    323   7:51pm Thu 27 Jun 2013   Share   Quote   Permalink   Like   Dislike  

    indigenous says

    Oh he produces it, uh oh all just go silent.

    Or were commuting home.

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