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Author Topic: West Coast refiners caught deliberately keeping supply tight Back to Topics
PD

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Message Posted: Oct 19, 2010 10:47:42 AM

Finally it's been made public- Tesoro itself admitted in a slide presentation to investors that it keeps supply deliberately tight on the West Coast to support higher prices and to keep profits at the company healthy.

In a press release, Consumer Watchdog hounds Tesoro and Valero, owners of several West Coast refineries that process crude oil into gasoline, for keeping supplies deliberately tight to keep pressure on prices.

You'll know if you're a frequent reader of the blog that I've followed the lower utilization rates of refiners on the West Coast, commenting throughout the summer that refineries on the West Coast have commonly had the lowest production rates out of any region in the nation.

This summer...

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wxman08
Champion Author Vermont

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Message Posted: Oct 22, 2010 10:23:04 PM

"It's not price fixing if they make their decisions independently."

LOL...keep your head firmly in the sand there "Sneakers55".

"I've noted that there are no fewer than seven players in the local fuel market"

Now ask those retailers where they are actually getting their gasoline from. Hint: Just because a gas station is labeled as "Exxon", "Mobil", "Chevron", "Texaco", etc. doesn't mean that the gasoline that you are buying came from those companies originally.

"A larger corporation can be more efficient and pass the savings along to the customer. An example is the large store from Arkansas that isn't Dillard's."

LMAO! Here here for more monopolies & Wal-Marts! What a complete & total joke!!

"The last time I looked, the refining business wasn't a public utility."

And that is relevant how?? Oh yea, it isn't, but nice try anyways...ugh...

"We haven't built a new refinery, but we've sure expanded the old ones"

...and, as a result, we've seen gasoline prices fall dramatically because of that...ummmmmm...not...

"They'd more likely increase health insurance copayments and deductibles and blame it on Obamacare."

LOL...what in the heck are you even talking about "Sneakers55"?? Do YOU even know??
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Sneakers55
Champion Author Houston

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Message Posted: Oct 22, 2010 2:16:01 PM

wxman08 quoted, then wrote:

>>"Why should they be fined for running a business correctly?"

>Because they are gaming the system, period.

The last time I looked, the refining business wasn't a public utility.

>>"If their profits get higher than normal, someone else will start building additional refining capacity."

>Really?? When was the last time that we built a new oil refinery in the USA again?

We haven't built a new refinery, but we've sure expanded the old ones.

>>"If someone fined the business you worked for they would lay people off."

>Not necessarily.

They'd more likely increase health insurance copayments and deductibles and blame it on Obamacare.
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Sneakers55
Champion Author Houston

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Message Posted: Oct 22, 2010 11:33:41 AM

dcjauburn wrote:

>Maybe the prices they charge should be controlled by the PUC
>just as the PUC controls utility prices.

And then people just complain about the PUC set rates.

If you've been doing oil refining, having a guaranteed profit and the ability to build the refineries required to meet worst case demand would be a field day.

Utilities are even more of a widows' and orphans' stock than oil.
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Sneakers55
Champion Author Houston

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Message Posted: Oct 22, 2010 11:20:18 AM

DavisSta wrote:

>Interesting. Valero and Tesoro are the two main financial backers of
>California Proposition 23 on the November ballot. The official description
>of Proposition 23 is "Suspends Implementation of Air Pollution Control
>Law (AB 32) Requiring Major Sources of Emissions to Report and
>Reduce Greenhouse Gas Emissions that Cause Global Warming
>Until Unemployment Drops to 5.5 Percent or Less for Full Year."

With Intel going off to put their next fab in Oregon, and Apple moving a lot of functions to Texas, and HP saying no new facilities in California, and NUMMI having both GM and Toyota pulling out (to move truck production to Texas, where they sell most of the trucks there anyway; Corolla production moved to Canada, making the car workers eligible for Trade Adjustment Assistance payments)... Is it possible for California to get unemployment that low?
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Sneakers55
Champion Author Houston

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Message Posted: Oct 22, 2010 11:04:52 AM

wxman08 quoted the resident GasBuddy sage, then responded:

>>"So we're ready to go to a Socialist command economy?"

>How is price fixing NOT a crime in our current, mixed
>economy "Sneakers55"??

It's not price fixing if they make their decisions independently.

>>"So we need more oil companies?"

>Ummmm, the more companies that there are, the less likely
>collusion between them will fix prices.

I've noted that there are no fewer than seven players in the local fuel market, and that is when you count the companies with more than one retail brand (Exxon and Mobil; Chevron and Texaco; Conoco and Phillips 66) as being a single brand each.

>Having a system of ever larger & larger corporations is not
>generally a good trend for all.

A larger corporation can be more efficient and pass the savings along to the customer. An example is the large store from Arkansas that isn't Dillard's.

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wxman08
Champion Author Vermont

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Message Posted: Oct 22, 2010 6:16:53 AM

"So we're ready to go to a Socialist command economy?"

How is price fixing NOT a crime in our current, mixed economy "Sneakers55"??

"So we need more oil companies?"

Ummmm, the more companies that there are, the less likely collusion between them will fix prices. Having a system of ever larger & larger corporations is not generally a good trend for all.
-----------------------------------

"buy shares in TSO if you want to take part in the profits."

Ummmmm, TSO stck has plunged a full point since this story came out "PopeClaas2nd"...duhhh...
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tomok
Champion Author Portland

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Message Posted: Oct 21, 2010 10:52:30 AM

What some companies will do for a healthy profit.
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Blue48
Champion Author Illinois

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Message Posted: Oct 20, 2010 11:17:52 PM

BUSTED!
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DavisSta
All-Star Author San Francisco

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Message Posted: Oct 20, 2010 10:35:00 PM

Interesting. Valero and Tesoro are the two main financial backers of California Proposition 23 on the November ballot. The official description of Proposition 23 is "Suspends Implementation of Air Pollution Control Law (AB 32) Requiring Major Sources of Emissions to Report and Reduce Greenhouse Gas Emissions that Cause Global Warming Until Unemployment Drops to 5.5 Percent or Less for Full Year."
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torn8owx
Champion Author Philadelphia

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Message Posted: Oct 20, 2010 7:44:27 PM

Supply-Demand at work. Legal though?
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nervous
Veteran Author Ventura

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Message Posted: Oct 20, 2010 10:28:51 AM

price gouging not used anymore? even with a economic disaster going on presently. not a crime to inflate (dictate) prices in a manmade disaster?
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PopeClaas2nd
Rookie Author Dayton

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Message Posted: Oct 20, 2010 7:57:03 AM

Wow. An epiphany! Maybe we should all go yell at our local farmers for storing grain, waiting for the prices to improve, and manipulating the prices for their benefit.

Don't lament, buy shares in TSO if you want to take part in the profits. Free market capitalism!
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remay
Champion Author Houston

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Message Posted: Oct 20, 2010 7:45:23 AM

Price manipulation at it's best...
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Grizdad
Champion Author Montana

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Message Posted: Oct 20, 2010 6:05:06 AM

Can the Terminator Governor take action?
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Sneakers55
Champion Author Houston

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Message Posted: Oct 20, 2010 5:19:35 AM

jadeusa wrote:

>Sherman Anti-Trust Act - use the law to punish the "wrong-doers".

So we need more oil companies?

I don't think so.
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Sneakers55
Champion Author Houston

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Message Posted: Oct 20, 2010 5:17:23 AM

Bubba44612 wrote:

>They need to be penalized for this.
>Screwing the public is not a good thing.
>The state needs to fine them for economic terrorism.

So we're ready to go to a Socialist command economy?

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wxman08
Champion Author Vermont

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Message Posted: Oct 20, 2010 3:45:14 AM

"Why should they be fined for running a business correctly?"

Because they are gaming the system, period.

"If their profits get higher than normal, someone else will start building additional refining capacity."

Really?? When was the last time that we built a new oil refinery in the USA again?

"If someone fined the business you worked for they would lay people off."

Not necessarily.

"The real problem is the government manipulating the cost of things through bank and mortgage regulation, determining interest rates, and printing unsecured money."

Baloney...you're just trying to dodge the issue here "comprof".

------------------------

"If Washington (EPA, Obama administration, etc.) would allow refiners to build additional capacity then there would be opportunities for other suppliers to sell at lower costs in order to increase their market share."

LOL...and if there was additional oil refining capacity, then prices would fall because of increased supply, which would cut into oil company profits...and we can't have that, can we "Saturn93"?? Sheesh...

-------------------

"That darn George Bush and his oil buddies, Oh that's right he is no longer president, that darn obama and his bunch of thugs."

LOL...sure, sure...like Obama is a "friend" to the oil industry like GWB & his cronies were in the *back pocket* of the oil industry. Please "RETIREDLOCO"...give us all a break!
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wxman08
Champion Author Vermont

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Message Posted: Oct 20, 2010 2:25:22 AM

Is anyone surprised at this?? I hope not!
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OnTheWater
Champion Author Orange County

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Message Posted: Oct 20, 2010 1:47:52 AM

Why am I not surprised?? What A'holes to do something like this! They continue to profit as we continue to go broke because of the high cost of gas. And with the high cost of gas comes higer food prices at the grocery store as well I noticed last night that milk prices shot up ten cents. So thanks a lot Tesoro & Valero.
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scrounger
Champion Author Vancouver

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Message Posted: Oct 20, 2010 1:46:15 AM

no suprise there
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takethe_point
Champion Author Omaha

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Message Posted: Oct 20, 2010 1:41:03 AM

Its bushs fault.
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jimbeaux53
Champion Author Kansas City

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Message Posted: Oct 20, 2010 1:40:33 AM

Officials who should be going after the energy companies for their illegal practices are always conflicted because they know who funds their campaigns.
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sch5v2
Veteran Author Colorado

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Message Posted: Oct 20, 2010 1:39:15 AM

Big surprise
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takethe_point
Champion Author Omaha

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Message Posted: Oct 20, 2010 1:36:28 AM

And I will bet its happening all around the USA right now too. Gota keep the profits high to screw the American public.
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Bubba44612
Champion Author Ohio

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Message Posted: Oct 20, 2010 1:31:45 AM

They need to be penalized for this. Screwing the public is not a good thing. The state needs to fine them for economic terrorism.
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hubcapLA
Champion Author Louisiana

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Message Posted: Oct 20, 2010 1:26:02 AM

If we don't like it we can refine our own oil----right!
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CDUBYA
Champion Author Ohio

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Message Posted: Oct 20, 2010 1:17:10 AM

Bastards!!!!!!
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Tenshot
All-Star Author Quad Cities

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Message Posted: Oct 20, 2010 1:06:47 AM

Surely your not suggesting dishonest business practices in the oil industry,Yes I am and dont call me Shirley
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runout9
Champion Author New Jersey

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Message Posted: Oct 20, 2010 1:01:57 AM

It's not just Tesoro & Valero, I have believed for years that
this practice has been going on all around the country.
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applejoe
Champion Author Twin Cities

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Message Posted: Oct 20, 2010 12:59:22 AM

Can anyone say price fixing?????????
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comprof
Champion Author Houston

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Message Posted: Oct 20, 2010 12:56:09 AM

Just what every business tries to do - meet but not exceed demand. Why should they be fined for running a business correctly? If their profits get higher than normal, someone else will start building additional refining capacity. Di not Dell cut its production last year with declining sales? If someone fined the business you worked for they would lay people off. I bet you would look at that differently. The real problem is the government manipulating the cost of things through bank and mortgage regulation, determining interest rates, and printing unsecured money.
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jadeusa
Champion Author Dallas

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Message Posted: Oct 20, 2010 12:51:42 AM

Sherman Anti-Trust Act - use the law to punish the "wrong-doers".
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vulcan96
Champion Author Ohio

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Message Posted: Oct 20, 2010 12:50:23 AM

a 500 million fine sounds about right, more later if they do it again...
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rwm1
Champion Author Iowa

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Message Posted: Oct 20, 2010 12:50:21 AM

So why don't they fine them, arrest them. Isn't that sort of illegal? Oh wiat this world is run by Wall Street and spineless politicians. Never mind go ahead and milk the little guy.
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bobdec
Champion Author Miami

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Message Posted: Oct 20, 2010 12:46:19 AM

I am not surprised
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jtfftj
Champion Author New Hampshire

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Message Posted: Oct 20, 2010 12:44:08 AM

Yes, I believe that California refineries keep production low to keep the price high. I lived in the Bay area for many years and the refinery maintenance schedule was a joke. There was never a time in my memory that that all of the five refineries in Northern California were on line at the same time. And fires just made things worse, not that they were deliberate or anything, but the off line repairs took lots of time to fix.
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Jeannemarie
Champion Author Las Vegas

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Message Posted: Oct 20, 2010 12:42:20 AM

You might know it.... Never fails.
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Long_gone
Champion Author Chicago

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Message Posted: Oct 20, 2010 12:41:45 AM

They wouldn't do something like that.


Would they?
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furiousfowl
Champion Author Riverside

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Message Posted: Oct 20, 2010 12:41:21 AM

were not special here, we dont want higher prices or a different blended gas. its forced on us and we always get stuck paying higher prices. im glad these bastards finally got caught being so greedy. now i hope prices drop, so sick of paying more
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granitestater
Champion Author New Hampshire

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Message Posted: Oct 20, 2010 12:29:07 AM

Has anybody had trouble finding gas when they needed it? Are any gas stations closed because they can't get gas due to a lack of supply? (Like the strikes in France.) Does anybody believe this paranoid nonsense??
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Saturn93
Champion Author Salt Lake City

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Message Posted: Oct 20, 2010 12:28:01 AM

Refiners, and other manufacturers, can and will do this when manufacturing capacity is at or near the demand levels. If Washington (EPA, Obama administration, etc.) would allow refiners to build additional capacity then there would be opportunities for other suppliers to sell at lower costs in order to increase their market share.
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CiVX
Champion Author Oakland

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Message Posted: Oct 20, 2010 12:18:45 AM

I am shocked!
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cutter1330
Champion Author Oklahoma

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Message Posted: Oct 20, 2010 12:13:52 AM

More Californication!!
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us4usa
Champion Author Missouri

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Message Posted: Oct 20, 2010 12:13:12 AM

Thats it Cali. needs special gas, THEY ARE SO SPECIAL. THEY ARE SO SPECIAL THEY CAN PAY MORE...
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Buddy2264
Champion Author Tampa

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Message Posted: Oct 20, 2010 12:11:06 AM

How nice of them, NOT. Another reason to switch to alternative or public transportation and leave oil behind. Conservation keeps your money in your pocket.
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SilliesRock
Champion Author Detroit

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Message Posted: Oct 20, 2010 12:09:39 AM

As long as Californians are going to be Eco-Nazis, LET them pay more for gas than Americans. They can ride their electric scooters into the sunset on Sunset (Boulevard).
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roadrunnerMO
Champion Author Kansas

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Message Posted: Oct 20, 2010 12:09:15 AM

Since gas is special in CA, they can keep supply low easily.
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LoneGuy
Champion Author Lansing

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Message Posted: Oct 19, 2010 11:56:11 PM

On the West Coast the refiners have to make the special gas used only in California. Maybe that has something to do with it.
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Z51Corvette
Champion Author Austin

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Message Posted: Oct 19, 2010 11:56:01 PM

Not surprising... someone should fine them for such behavior!!!
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RTBama1
All-Star Author Montgomery

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Message Posted: Oct 19, 2010 11:45:04 PM

Really?
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