cjhillman
Posted a lot
1979 Capri (Rolling Project) 1985 Escort mk3 (Daily)
Posts: 1,580
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May 26, 2020 10:04:55 GMT
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The ULEZ tax rolling out to the North and South Circular roads of London are going to make lots of cars cost an extra £12.50 a day. Ie petrols must be Euro4 and diesels Euro 6. I suspect these cars will be selling cheap to the home counties and beyond pulling prices down. I started looking at newer non classic cars the other day to see what I cold get. Looking in the BMW 3 series area but, most of them from the last 10-15 years are diesel so its a no go. I have two classics so will probably have to sell one to fund a sensible London Car. I did notice that Saxos seem exempt it seems (mentioned it in my saxo thread)... don't know why, they seem like they would have old engines. Also, re BMWs and the likes... I watched a guy talking about a 5 series on youtube and he spent more in a year on it that I have on my Capri! If i'm going to buy a second hand car... its probably going to be a cheap focus.
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Last Edit: May 26, 2020 10:06:32 GMT by cjhillman
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Paul Y
Posted a lot
Posts: 1,948
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May 26, 2020 13:24:39 GMT
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If you are looking for a secondhand bargain of the nearly new variety I would hold on a week or two as now that Hertz has gone Pop sure there will be a large number of ex rentals coming to market. Question is, who will be next and what will this do for the manufacturers that pump their run of the mill spec into the rental industry? Wonder what will happen to Hertz prestige, adrenaline and dream cars.... P.
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Kron
Part of things
Posts: 260
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May 26, 2020 13:39:10 GMT
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I read that Hertz (in America) were looking to offload 30,000 cars a month to reduce their indebtedness.
That's a lot of cars flooding onto the market - although in all fairness I have absolutely no idea of the market size or how those numbers stack up relativity speaking.
You have to assume if they do similar in the UK then there will be a raft of cars under 3 years old hitting the market at a fairly low price which will impact on dealers and their ability to sell cars?
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May 26, 2020 17:52:35 GMT
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If you are looking for a secondhand bargain of the nearly new variety I would hold on a week or two as now that Hertz has gone Pop sure there will be a large number of ex rentals coming to market. Question is, who will be next and what will this do for the manufacturers that pump their run of the mill spec into the rental industry? Wonder what will happen to Hertz prestige, adrenaline and dream cars.... P. It’s little wonder though when you see what debts these companies have. Over $16 million in the red & the CEO who has basically done a curse word job is having a $700’000 pay day. I don't know who founded the company but it’s about 100 yrs old I seem to recall, I bet the old boy is turning in his grave.
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May 26, 2020 18:34:48 GMT
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I see a next scrap heap challenge, sorry scrapage scheme again as an economic smoke screen to (cough cough) boost the motor industry 😂 Possibly - But I don't see it being a government sponsored thing like the last one - last time the motor industry was in dire straights and the 'Scrapage Scheme' gave those in politics land something to hang their hat upon 'Looks at us - look at the good we doing in protecting all the motor industry jobs - look at all the over polluting & unroadworthy vehicles that our scheme has taken off the road' This time every business is up the creek - they are all crying for bailouts, they all want propping up and no way will they ever be enough money to retain every industry that's likely to fall apart in the UK in these unprecedented times
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Last Edit: May 26, 2020 18:35:13 GMT by Deleted
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Huge car price crash, is it actually coming? Yes of course it is, you’d have to be very naïve to think otherwise but perhaps more of a slide than a crash.
6 weeks ago The Independent Office for Budget Responsibility projected that the economy could shrink by 35 per cent if the Covid-19 lockdown were to continue for three months. The retraction would be the biggest slump in a single quarter since 1720, when the catastrophic shares crash known as the South Sea Bubble rocked the nation. The WTO predicts that global trade will be cut by a third. The world is on track for a new Great Depression*. The WorldBank estimates COVID-19 will push 49,000,000 people into extreme poverty during 2020. The International Monetary Fund predicts economic growth of -3% in 2020 meaning the Great Lockdown is the worst recession since the Great Depression. The OECD outlines the fact that few sectors will escape the impact of reduced demand for goods and commodities globally. The Centre for Risk Studies at the University of Cambridge Judge Business School have projected that the potential global cost could be as much as £64,740,000,000,000.00 (Trillion). Cost to the UK - as much as £1,940,000,000,000.00 (Trillion). Respected Economists modelling a worst case scenario predict economies will not return to pre-crisis levels until 2023 with 2020 being the worst recession on record. Pension funds may take a big hit so pensioners incomes would be effected. Banks may fail. Whipsaw effect: initial deflation, (no good for businesses), eventually gives way to inflation & hyper-inflation as governments print money to cover their own spending and stimulate the economy. World Economics Association argue that globalisation as we know it may have come to an end, after the pandemic subsides we'll be faced with various trade wars. Trade wars often spawn real wars, even world wars. China is already making thinly veiled threats.
*Depressions are characterised by their length, by abnormally large increases in unemployment, falls in the availability of credit (often due to some form of banking or financial crisis), shrinking output as buyers dry up and suppliers cut back on production and investment, more bankruptcies including sovereign debt defaults, significantly reduced amounts of trade and commerce (especially international trade), as well as highly volatile relative currency value fluctuations (often due to currency devaluations). Price deflation, financial crises, stock market crash, and bank failures are also common elements of a depression that do not normally occur during a recession.
Translating this into an understandable picture: Lots of businesses, big and small won’t weather the lockdown. Lots more businesses who have staff on furlough will make these people redundant when they’re expected to contribute towards their wages. They’ve got no income, don’t want to borrow against zero income and have no choice. Lots more businesses will founder and fail in the months after lockdown lifts; restaurants, pubs, hotels who need high occupancy levels to survive will be running on a fraction of their original custom due to social distancing requirements also because many former customers are now unemployed they no longer patronise them. The housing market will go into a huge slump, less building means more tradesmen unemployed. People won’t have the money to spend on big money items like new or nearly new cars so dealerships will go to the wall, car factories will go on short time or close and this will feed back into the supply chain which will see lots more businesses going under and people claiming unemployment benefit or managing on reduced salaries. Youngsters or even middle-aged who’d normally hold their begging bowl out to the Bank of Mum & Dad can’t do so because Dad’s private pension fund went belly up. Businesses will look to cut employee salaries, we’re already seeing this with BA. Millions of people who were previously net contributors will be reliant upon state aid. Inflation or hyper-inflation will mean that those with the least to spend will have to make their pennies go much further. As these cash-strapped millions ‘make do and mend’ they don’t buy new white goods or furnishings or clothes or eat out resulting in more businesses failing which puts even more on the dole. Many will have their homes repossessed or be evicted, homelessness will spiral. This will drive acquisitive crime and substance abuse.
So, overall, the government will have a drastically reduced revenue much increased expenditure with vastly increased debt and fresh borrowing. This debt will take generations to pay off, (we’ve only recently finished paying for WW2!)
Then we have to factor in the BREXIT issue. I’m a Brexiteer, when I voted to leave the EU I did so in the belief it would have a significant impact upon the UK economy which would last a generation but that we would come out the other side in a better place. The horrendous bungling of the negotiations process and the EU's intransigence makes a no deal Brexit more likely which will impact exports, imports, access to medications, etc. which all add to the final bill to be paid. I think it’s likely on the other side of Brexit we’ll see fresh fishing wars which will mean much more has to be spent on protecting our waters.
The economic impact is only just starting to be felt. We’re at the top of the abyss just starting to slide in. We have a long way to fall and a very long way to climb out the other side. Just because yesterday’s auction prices were still buoyant is no hope for blind optimism.
This will effect people on all rungs of the social ladder; Billionaires like Branson are already losing businesses. Many millionaire or multi-millionaire owners or directors of SMEs will find themselves bankrupt. Many stock market investors will lose everything. The cherished E-Type or Dino in the garage will be the first thing sold on a saturated and suppressed classics market to help keep the wolf from the door, this at a time when few will want to invest in such frivolities. The former factory worker might have to let go of his treasured RS at a fraction of its former value just to put food in front of his kids. One of the few growth areas, Bailiffs will be in overdrive throwing thousands more classics and older luxury automobiles into a flooded sluggish market.
What takes a hit in a recession or depression? Property, cars, classics, stocks & shares, antiques, cash, etc.
Prices won’t plummet, they’ll slide, and slide, and slide, and slide some more. When the depression is over, it will take a very long time for them recover. What your classic was worth in 2019 is what it will be worth in 2035 if you look after it.
Just my own glass half empty belief, sorry if I’ve depressed anyone!
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Last Edit: Jun 6, 2020 14:27:07 GMT by MkX
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Seems wrong to like a post like that, but its hard to deny its probably right, if a little worst-case-scenario.
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A thorough analysis albeit I would also throw into the mix the delivery and production of a vaccine, and how fast we can get it out to people.
Only at that point does this health and safety crises become a regular supply / demand recession. Quantitative easing does little if we don’t have a vaccine, which luckily seems extremely likely. It’s just a case of what damage is done in the meantime which will determine how much of your worst case scenario comes to fruition.
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Current fleet 2022 VW E Up! | 1991 Bentley Turbo R | 1998 Nissan Elgrand 'Highway Star' | 2003 Mazda MX5 1.6 (for the purists)
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A thorough analysis albeit I would also throw into the mix the delivery and production of a vaccine, and how fast we can get it out to people. That will obviously be a major factor in how deep this economic disaster is. The problem is we don't yet know if a vaccine is possible. Early research suggests immunity against COVID-19 only lasts for a period of 3 or 4 months, will we need to be vaccinated 3 or 4 times a year?
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duncanmartin
Club Retro Rides Member
Out of retro ownership
Posts: 1,320
Club RR Member Number: 70
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I think that's an absolute worst case scenario where competing interests all collapse - I think it's unlikely you have inflation and deflation at the same time like you suggest. Governments in many countries look to have learned some of the lessons from 2008, and are pouring money into their economies. At a point where interest rates are negative (borrowers are currently paying the treasury for the privilege of holding their bonds), it makes sense, and there's no reason to think they will just turn the taps off. If this continues and the money supply is vastly increased (looks likely) then that money has to go somewhere, typically the stock market and other asset classes and driving prices up dramatically (hence why the markets are so high despite the recovery post 2008 being so anaemic). Whether that actually results in inflation depends on much other economic behaviour - it may not have much effect on demand in the general economy. What we don't know is the effect of the supply side shock (and how large that shock will be). There's no precedent for such a disturbance to international trade in such an interconnected world. We also don't know what the effect politics is going to have on it. China and the US escalating their trade war would be bad for the global economy without a pandemic. Gold has been climbing fairly steadily since the middle of 2019 (in USD, GBP (excluding a political Brexit dip in Nov-Dec last year) and EUR, so not a currency effect) . The implication of that is that times are uncertain and that inflation is likely. However the rate of change doesn't seem that different in 2020, so it doesn't look like the markets have taken massive fright just yet. Maybe they are in denial, or maybe it's already priced in. In absolute terms, prices have hit record highs, but from a high base (in part due to the monetary easing post financial crisis) - they have not risen anywhere near as much as they did in the years post 2008 (YoY it's up around 30%, it was up almost 50% in the 4 months post September 2008). Reference: www.gold.co.uk/gold-price/45year/ounces/GBP/TL:DR - the world economy is in a bit of a state, there's more than COVID at play, there's too much uncertainty as to how health/economics/politics pans out to be able to forecast reliably.
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I think that's an absolute worst case scenario where competing interests all collapse - I think it's unlikely you have inflation and deflation at the same time like you suggest. TL:DR - the world economy is in a bit of a state, there's more than COVID at play, there's too much uncertainty as to how health/economics/politics pans out to be able to forecast reliably. Of course, I have already mentioned some of the forecasts are worst case scenarios. Obviously you can't have deflation and inflation at the same time, the 'whipsaw effect' is where the price of global commodities slump, (e.g. crude oil in recent months), causing systemic deflation and weak trading. Usually when state banks start printing money to attempt stimulate the economy and cover increased expenditure it has often provoked inflation which spirals. One of the best examples is during the inter-war years in Germany when a man took a wheelbarrow to his local bakers to attempt to purchase a loaf of bread, it was heaped with bundles of million Reichsmark banknotes. He left this outside the store while he unsuccessfully tried to negotiate with the baker. He came back outside to find someone had stolen his wheelbarrow - but only after tipping his worthless banknotes into the road. Yes there will be safeguards in place but this situation is going to be a new lesson in what's needed in the future. One of the safest bets for investment, properly stored and handled, is vintage wine. It consistently outstrips gold and property by a considerable margin. And, of course, the whole situation is like string theory, with unlimited variables there are any number of potential outcomes. Most of them, it has to be said, not too good.
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You could be right - the predictions could be well be on target and they may well exceed any current projection - However everyone that I deal with on a business prospective is currently doing quite well - even the ones that have staff currently on furlough are seeing a full return to business in the non too distant future - I don't deal with a huge amount of businesses but enough to obtain a clear picture of what's happening out there rather than listening or reading the over hyped media circus - sadly not all businesses will survive but you will be surprised at just how robust the market can be. In my own case if anything its bolstered the business - classic / retro owners in the main have decided that life is too short to sit on money that's doing nothing in a bank account and spend on things that make them happy - I haven't had one future or potential restoration booking request that they would prefer to postpone their planned vehicle restoration and sell the vehicle rather than go ahead and expend the thousands of pounds that it will cost to return the vehicle to the road - I've had client deliver a car for a job that was likely to cost several hundred and request that the car gets retrimmed at the same time - a cost of several thousand Then I have a good friend & fellow Jowett owner that I restored this for a few years ago Its a really nice and very capable Jowett Jupiter but it was his 73rd birthday on Wednesday and he decided to find a better a use for his money that was sat in the bank so he went & purchased one of these - Aston Martin V12 Vanquish Convertible - probably spent the same amount of money that his Jupiter is worth I realise its not all rosy out there but not all doom & gloom either - if you are in the market for new modern motor there is no doubt that you will be able to choose from some pretty unrepeatable deals - whilst I can see demand & prices rising for the £5k ish clean & reliable motor driven by others that have to downgrade from newer cars or opt out of lease deals - classic wise there is no let up - strong demand for cars at online auctions is being met with fair prices paid / reserves being met & healthy % rates of the sale stock being made
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Last Edit: Jun 6, 2020 20:59:42 GMT by Deleted
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You could be right - the predictions could be well be on target and they may well exceed any current projection - However everyone that I deal with on a business prospective is currently doing quite well - even the ones that have staff currently on furlough are seeing a full return to business in the non too distant future - I don't deal with a huge amount of businesses but enough to obtain a clear picture of what's happening out there rather than listening or reading the over hyped media circus - sadly not all businesses will survive but you will be surprised at just how robust the market can be. In my own case if anything its bolstered the business - classic / retro owners in the main have decided that life is too short to sit on money that's doing nothing in a bank account and spend on things that make them happy - I haven't had one future or potential restoration booking request that they would prefer to postpone their planned vehicle restoration and sell the vehicle rather than go ahead and expend the thousands of pounds that it will cost to return the vehicle to the road - I've had client deliver a car for a job that was likely to cost several hundred and request that the car gets retrimmed at the same - a cost of several thousand Then I have a good friend & fellow Jowett owner that I restored this for a few years ago Its a really nice and very capable Jowett Jupiter but it was his 73rd birthday on Wednesday and he decided to find a better a use for his money that was sat in the bank so he went & purchased one of these - Aston Martin V12 Vanquish Convertible - probably spent the same amount of money that his Jupiter is worth I realise its not all rosy out there but not all doom & gloom either - if you are in the market for new modern motor there is no doubt that you will be able to choose from some pretty unrepeatable deals - whilst I can see demand & prices rising for the £5k ish clean & reliable motor driven by others that have to downgrade from newer cars or opt out of lease deals - classic wise there is no let up - strong demand for cars at online auctions is being met with fair prices paid / reserves being met & healthy % rates of the sale stock being made As I say, I feel we're at the precipice about to start the descent and things will look very much bleaker in 12 months time. I think this depression will snowball over the next 12 or 18 months, perhaps longer. I truly hope things don't pan out the way I think they're about to but I feel a certain inevitability about it. Lovely resto! If you're comfortably off, perhaps retired, then the next couple of years should provide an opportunity to invest in dream cars which might previously have been out of reach. And Yes, if you're in the market for a new car you could probably get the sales manager to nibble the chewing gum off the soles of your shoes before you negotiate a discount.
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Last Edit: Jun 6, 2020 17:50:36 GMT by MkX
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Paul Y
Posted a lot
Posts: 1,948
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Mmmmm.... Is it all doom and gloom? Think I am going to go with a no. What you will see is business that are burning cash on the promise fo 'Jam Tomorrow' Uber - Deliveroo - WeWorks - Grub Hub etc are going to find that the gravy train that is Softbank, Goldman Sachs etc is going too come to an end in the very near future - All of these are, in my opinion, a giant Ponzi scheme where the last one in is going to catch a massive cold. Why? Because there is no profit. Not sure who said it but right at this moment in time everyones mantra should be ' Turn over is Vanity, Profit is Sanity and Cash is KING!!' Therefore businesses that are not leveraged to the tits (you can include people in that as well) are going too do very well thank you. There will be a hard reset on a lot of what people perceive as value - cars - holidays - recreational spending (ie going out) which is probably a good thing. Inflation? Mmm..Probably not to the level that some think but a healthy economy has a little inflation baked into it or else why would anybody save money or lend it? I can see the end of the TOWIE lifestyle (thank goodness) the worshiping at the alter of fame with nothing to back it up, other than being famous, and the outward display of perceived wealth. How many £100K millionaires do you know? The death of bling and Lambos on 72month PCP (exaggeration I know) cant come soon enough. There is still a HUGE amount of cash out there looking for a home. Without going into a huge amount of detail I run a start up software business in the logistics industry ( by start up we are 4 years in and are now at the point where our income covers our outgoings) and have been receiving 2-3 offers of cash per week since April. Why? Because we stick to the mantra above and we got lucky being in an industry that is experiencing massive growth. I would rather be lucky than good any day.... So, to bring this back to is there a huge price crash coming for cars? I think it has already arrived for nearly new judging by the trade in values for year olds. Is it coming for classics? Who knows but I am going to be saving the £8K required to buy a 73RS when they reach 1979 levels.... Right - I am going to go back to destroying grinders and turning knot wheels into bald facsimiles of their previous selfs... Onwards! P.
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Last Edit: Jun 6, 2020 18:19:43 GMT by Paul Y
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On previous occasions when stock markets fell, property markets stalled & cash looked likely to lose value people with wealth wanted assets, art, agricultural land & classic cars have proved popular. Of course the type of cars that investors purchase tend to be at the top end of the established classics but it has a filter down effect on the market.
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There will be no massive price crash as I’ve already predicted The world will be back to work within four weeks The economy will boom......just my humble opinion
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Fraud owners club member 1999 Jaguar s type 1993 ford escort
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There will be no massive price crash as I’ve already predicted The world will be back to work within four weeks The economy will boom......just my humble opinion
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There will be no massive price crash as I’ve already predicted The world will be back to work within four weeks The economy will boom......just my humble opinion Rowan Atkinson will be ok though. As will I. I owe no one anything. I rekon ‘everyday’ cars will defo take a hit (I made a post earlier in the thread) but I don’t see classics taking a hit. Interest rates are virtually zero, real money goes into other commodities.
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b3nson
Part of things
Posts: 886
Club RR Member Number: 22
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Not that I’d ever want to wish misfortune on others, but the prices of classic/retro/modern classic cars are largely ridiculous at the moment, so I do hope for some kind of crash to more sensible prices so non-millionaires like myself can afford to buy some decent stuff!
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'99 Fiat Coupe 20V Turbo '08 Panda 100HP
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ChasR
RR Helper
motivation
Posts: 10,191
Club RR Member Number: 170
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Not that I’d ever want to wish misfortune on others, but the prices of classic/retro/modern classic cars are largely ridiculous at the moment, so I do hope for some kind of crash to more sensible prices so non-millionaires like myself can afford to buy some decent stuff! I used to think they were pricey. To some extent, they are. But times have changed. -The lessons of older cars being destroyed has been learned. Look at Dolly Sprints. They were worthless and despite their following, many got scrapped as they were cheap. They now only exist in the sub 100s I believe. -There has been a push to make retros and future classics more appreciated. That has some strange things! -Main one is new cars are more expensive. Much more expensive. In the days of easy finance etc, and rising labour rates for older stuff, why go secondhand? If I gave the garage the work to do on my cars, you can bet my car choices would be very different, and possibly new rare I say. -House prices have been firm for a very long time. The demand to move out hasn’t changed. Look at more people who live with their parents. Short of either having an inheritance, or being partnered/married to someone, it’s not so easy to buy a property near to where you work, unless you are on a senior manager/director’s salary. Of course, for those who got in l, it’s great. It’s money for nothing, and why would they sell? For that reason, I think the values will take a dip at the sub £15k stuff, but otherwise be unaffected. Compared to 20 years ago, we much improved ways to work online. Keeping people on furlough isn’t also just a benefit to the people on it. There is a much bigger picture than that . My company for example would have been screwed if FL was not present. Then you have the suppliers to us...
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