Wednesday, August 31, 2011

Loose lips sink ships

The Central Statistical Office, tenderly known as GUS (Goose), published statistical data on Tuesday at the official time of 10 am on Poland's gross domestic product for April to June. Polish real GDP growth hit 4.3% percent year-on-year, not bad considering gloomy conditions in Europe and slightly gloomier expectations.

Investors didn't react. They already knew the data.

Around 30 minutes before the official publication, the Reuters news agency published a leak giving precisely the headline GDP growth rate of 4.3 percent and basing it on a "senior government source." Whoops.

One can easily see some over-eager government member wanting to trumpet early the fact Poland still sports relatively fast economic growth. But that PR victory could prove costly for the individual in question.

GDP and like data are considered statistical state secrets until published. Article 54 of Poland's Law on Public Statistics says any violation of "statistical confidentiality is punishable by imprisonment for up to 3 years." Ladies and gentlemen, we seem to have a winner. Someone should go to jail for this.

GUS asked Wednesday Prime Minister Donald Tusk's chancellery for an explanation. The stats office delivers the data results by hand (meaning by vehicle) to the PM's office, the president's office and the heads of the lower and upper houses for 10 am, a GUS spokesperson told a business network. There could, though, be a chance it arrives early. Indeed.

One potential "senior government source," Minister Michal Boni, denied knowing the GDP print beforehand. He seemed perturbed. He should be. He is undoubtedly the source of other less important leaks. It could thus be him, though I hope not since he is most competent.

I am making a fuss because this is for real. GDP data is absolutely critical for markets. Full stop. Period. Completely.

If Reuters published it 30 minutes before the official release, it means the agency's journalists knew the number sometime before then. I don't believe any Reuters journalist did anything remotely wrong, but the very leak does raise serious questions and does raise the potential of wrong-doing. How many reporters knew the leak by hearsay or via editing or simply overheard conversations about it. Any of these people could have seen the light and sent the figure off to their favourite broker or relative. Getting beyond-consensus GDP data early constitutes insider information par excellence.

I don't blame Reuters. All news agencies hunt for that most elusive of prey, exclusive news, and I'd publish it too if I got it. So congrats. But this  transgression is serious. At the very minimum, it shows disregard for the value of information on the part of the government. At worst, someone close to Prime Minister Tusk believes that the law can be broken for a mini PR victory.

Tuesday, August 30, 2011

Highwa.., er, road to hell

Law and Justice (PiS) went on the offensive Tuesday, showing off its dreams, pardon plans, for developing Polish infrastructure. Given the hardcore, or just hard, experience of anyone who has used any form of public transport in Poland, this should be a slam-dunk, no-brainer attack on the government, which has managed to build a few roads but has done too well in other areas.

PiS clearly thinks BIG. It promises Warsaw a new airport while other cities get metros. All Poles will get roads, highways, roundabouts, railways. You name it, you got it.

Unsurprisingly, PiS is very light on financial details beside mentioning that the state budget would finance 25 percent of its plans (hell knows how much that is in real money) and the EU and municipalities will finance the rest. Somehow, given the current debt crisis in the EU, the need for domestic fiscal austerity, and a looming problem with local government financing, I doubt this scenario is credible.

Of course, PiS should also be careful on infrastructure as people might, just might, remember that the first decision of the PiS government in 2005-2007 was to remove construction companies from key road construction sites (they were supposedly corrupt), instantly freezing road-building.

However, PiS's view might have changed. After all, PiS leader Jaroslaw Kaczynski is always in a hurry, needs to travel fast to meet his voters, and only good or very good roads guarantee he can speed 140 km/h through towns, just like in this video:

Praying for Joy on the Ninth

Poland is the superest awesomest (PJN) is cheering. After several hard, trying, troubled months, it finally announced news that doesn't signal its ever nearing demise: it is a caucus again.

PJN, the ex-Law and Justice (PiS) splinter group, announced it wooed a PiS member of parliament (MP), Jan Religa. With the addition, the group will again have the 15 MPs needed to form a caucus, which gives extra parliamentary rights and allows for a more prominent position. That will be crucial as we approach the general elections on October 9th.

But no matter how much prominence, the stench of failure continues to swirl. And the clouds are dark indeed.

PJN started out as a wake up call to PiS strongman Jaroslaw Kaczynski that all was not hunky dory in the party. It announced some relatively good policies (i.e., slashing red tape) and seemed to promise to be a moderate version of PiS, a PiS without Radio Maryja.

Early polling numbers were not stellar but they did point to fair chances for the new party to hurdle the 5 percent electoral threshold.

But then rumours started pasting the headlines with talk of internal strife, now ex-PiS members who wanted to return to the fold, and the fact the leader might abscond to PM Donald Tusk's Civic Platform (PO). You know things aren't going well when the leader wants to leave, not lead.

In the event, ex-PJN leader Joanna Kluzik-Rostkowska duly jumped ship to join the PO. She thus left new PJN leader Pawel Poncyljusz, Elzbieta Jakubiak, former PiS PR spin-meister Tomasz Dudzinski and others to pick up the pieces.

If I had to bet, I'd bet they don't make it (any takers?). But if they do surpass the 5 percent threshold, some sort of miracle will have happened. In that case, I wouldn't be overly surprised to see Poland win the Euro 2012 football championships (which would be a true miracle).

Friday, August 26, 2011

Clash of the titans

Bring it on, bi-yatch!
Law and Justice (PiS) masterminds are hunkered down trying to answer the most profound of questions: 'who can we get to debate Jacek Rostowski?' The Civic Platform (PO) wants its finance minister, Rostowski, to debate PiS's economic expert. Trouble is, PiS doesn't have one.

PiS's first choice was Beata Szydlo, the heretofore PiS economic expert and a deputy leader. But people have noticed she's an ethnographer by training. In a recent radio interview, she also had trouble grasping basic economic definitions. The lack of knowledge about a subject being discussed hardly puts her outside the mainstream of Polish politicians, but PiS is apparently afraid of embarrassment.

With her gone, PiS leaders could only look in astonishment as they did not have a single other well-known economic supporter . . . until they remembered Zyta Gilowska.

Ahh, good ole Gilowska. The former PO economic tigress who was booted out of the PO and then suddenly discovered she really liked PiS leader Jaroslaw Kaczynski. In fact, they share some sort of creepy connection and always seem to be kissing each other, even if it's just his lips on her hands.

Gilowska on Thursday pledged her undying love for PiS and all things Kaczynski, seemingly setting up a true clash of financial titans: Rostowski, the PO's new financial guru and the man who knows absolutely everything, versus Gilowska, the barb-tongued castoff who knows absolutely everything.

It sounds scintillating. Rostowski's turn as finance minister has definitely not been one for the ages, but he does have a talent for political rhetoric and debate. Gilowska is well known for quips and gibes. Don't get me wrong. I don't expect quality debate. But I do expect fireworks and with luck fisticuffs.

The only problem is Prime Minister Donald Tusk is setting up to be a spoilsport. He said Friday that Gilowska, as a member of the central bank's rate-setting Monetary Policy Council, should be neutral and not allied to a political party.

This could stop what should be the second best debate of a planned cycle, with the Tusk-Kaczynski clash the clear headline event. But here's hoping that Jacek and Zyta do square off and someone somewhere announces 'Let's get ready to ruummbbbbblllleeee....'

Thursday, August 25, 2011

Privatisation pays...for some

JSW shares since debut. Source:
It makes sense to take part in privatisation in Poland. Some would even say it is a slam dunk investment. Or at least it is for some companies.

Let's take a look at the example of Sweden's utility Vattenfall, which is ironically state-owned itself. Polish privatisation, or rather the sell-off of assets in the Polish power sector, lured Vattenfall in 2000-2001 to buy significant stakes in two energy companies. It invested, restructured, built value, increased its stake.

In 2009, under pressure from the government, Vattenfall bought the state's remaining 25 percent stakes in the two companies for 1.3 billion zlotys. The purchase valued the entire venture at 5.2 billion zlotys, give or take.

So far so good. Fast forward to a few days ago. Vattenfall announces it sold the two Polish companies for 7.6 billion zlotys (45 percent above the 2009 valuation) to...Polish state-controlled companies Tauron and PGNiG.

In essence, Poland bought back what it had sold to Vattenfall giving the Swedes a 45 percent return on investment in the past two years AND called it a success! We basically paid a 2.4 billion zloty management fee to a Swedish state utility just because it knew what to do and we didn't. Talk about a deluge of profits.

Thus, privatisation indeed pays off. You can come here, invest, improve and then we will take the problem off your hands at a hefty premium.

But beware. If you take part in the privatisation of Polish companies listed on the Warsaw market, then you would not be even close to earning similar returns, not to mention if you were foolish enough to believe in the coal-miner JSW, as in the chart in the upper left corner. Fool's gold, indeed.

Wednesday, August 24, 2011

Agony and ecstasy

Being a fan of Polish football is only for masochists. Sadists, don't apply. Go root for Barca or something.

Poles are natural masochists. But so are some of the scattered foreigners like myself who have been here long enough to cheer for Poland or Polish teams. 

Misery is the watchword. Yet hope always springs eternal. And that's the problem.

A football clash Tuesday night was a case in point. Wisła Krakow was on the verge of qualifying for the Champions League tournament, which groups, er, the champions of Europe. All the Cracovians had to do was beat a team from Cyprus, as they did last week in Krakow by 1-0.

I mean, really, how hard can it be for Poland's 2010 champion to beat the champ from Cyprus? Poland has 38 million people. Cyprus? A measly 800,000. But anyone who saw the game in Krakow would know the Cypriot team was stern.

The kickoff on Tuesday was followed immediately by a nervous display from the Polish side and fire and flare from the Cypriot side APOEL FC. The hope that Wisła would rise to the occasion was vain; a real Polish fan hopes anyway but knows the team will fail in the end. APOEL duly scored in the first half.

The second half saw more of the same. APOEL's wingers ran rampant, Wisła's were cowed. APOEL got another goal, as could be expected. Just another bad loss, it seemed . . . .

The other key to Polish football misery is hope. Hope springs eternal. And hope came with a thunderous blow as a Wisła winger slotted in a goal in the second half. In aggregate terms, the goal meant Wisła would qualify for the Champions League group phase. All they had to do was not allow another goal in the remaining 20 or so minutes.

I have a friend who loves Wisła Krakow. I don't want to name any names (Vasyloo), but I am pretty sure I have a friend who cried late that Tuesday night.

Because, yes, the Wisła defence proved porous when it needed to hold and APOEL scored its goal. APOEL, the Cypriot minnows, will play with the big boys when the Champions League group phase starts. They will be beaten by the big boys, to be sure, but that's the honour for the lowly teams from Europe.

The coda for this sad tale of dashed dreams is again hope. Hope springs eternal. And hope came on Wednesday night. In another game fraught with drama, Polish goalkeeper Wojciech Szczęsny rose to the occasion and made a brilliant save of a penalty that helped save his team Arsenal's arse.

We Polish football fans can now hope that Szczęsny's ascendancy marks the rise of Poland as a footballing nation one can be proud of and not a bunch of perennial underachievers better at giving fans heart attacks than attacking opponents' goalkeepers.

Tuesday, August 23, 2011

PiS activist: Let's do a Hungary!

A weekend election convention featured rocking and roiling flags and showers of confetti, sending Law and Justice (PiS) fanatics into a frenzy. "We will win, we will win," they chanted. PiS's glorious leader Jaroslaw Kaczynski echoed this and promised victory in the October 9 general elections. In all this ecstasy, some lost their heads.

"This is only the start. We need a situation like in Hungary, where Fidesz managed to mobilise a broad right-wing electorate and introduce changes to rebuild the country," the leader of a PiS backer told the daily Rzeczpospolita.

Hungary, hmmmm. Fidesz, hmmmm. Yeah, that's just what Poland needs.

PiS used to model themselves on the U.S. Republicans, but I guess the flavour of the day is Fidesz.

I can see why. Fidesz rode a wave of disgust in previous socialist governments in Hungary to a resounding victory in 2010 elections. The party won more than two-thirds of seats of parliament, enough to allow it to change the constitution and legislate at will.

I can imagine a world in which having so much power concentrated in one party would be a good thing. Unfortunately, it's not this one. Fidesz has stumbled from one controversy to the next. It has offended most EU members. It has offended foreign investors, banks, businessmen.

If PiS were to ever win over two-thirds of seats in Poland's lower house, one could easily predict an absolute disaster. PiS doesn't just present an ideology. It presents Absolute Truth. Fanatics such as these are dangerous.

But it's good then that Jaroslaw Kaczynski's promise of election victory looks empty. Though promises are usually easy to make, one might imagine it would be harder for Kaczynski to promise victory after having lost five elections in a row.

Monday, August 22, 2011

Roll out the guns

Prime Minister Donald Tusk, anxious about polls showing over 60 percent of Poles unhappy with the government response to the crisis, decided to go on the offensive on Saturday. Literally. The Civic Platform (PO) leader challenged his main rival, opposition leader Jaroslaw Kaczynski, to the modern equivalent of a duel: a debate.

Tusk in fact proposed the rather sadistic idea (for followers of the political scene) of holding debates between his ministers and Law and Justice's (PiS) representatives on specific government actions and future plans. The marathon would start, of course, with Finance Minister Extraordinaire Jacek Rostowski, who is willing to take on any opponent, and would finish with the mano-a-mano cage match between Tusk and Kaczynski.

I can only imagine that by Debate 3 the only people watching would be those in prison (no access to the remote control). I can also easily see internet streams of the debates being used by torturers across the globe (if you don't talk, you'll be forced to watch Rostowski debate...).

Tusk's debate idea has two goals. Diverting attention from his government's actions to the fact that the Law and Justice has no real clue what to do in terms of economy if they won is the first.

Sidelining other opposition parties including the post-communist SLD as well as the PO's coalition partner PSL, and again focusing Poles' attention on the (false) dilemma that you have to choose either PiS or PO was his second goal.

Didn't I mention that Tusk's invitation was extremely exclusive and was addressed only to Law and Justice? Yup. Clearly a party has to have at least over 20 percent support nationwide to be worthy of the prime minister's attention and hence only Law and Justice qualifies.

Honestly, I don't know what genius thought of limiting the debate to only Law and Justice (on paper this idea might look smart) but it destroyed the entire plan. Instead of putting pressure on Law and Justice, it gave it an easy way out while at the same time pissing off the SLD, the PSL and anyone who believes Poland is not doomed to never-ending PO-PiS battles.

Moreover, with quotes like "let's be honest, there are only two important parties in this election...," Tusk gave the impression of being an arrogant megalomaniac. Which is to say, he actually acted truly like himself...;)

Friday, August 19, 2011

Fiscal tightening, Polish style

Finance Minister Jacek Rostowski has been on a media blitz of late, trying to calm poor Poles by preaching that Poland's financial standing is a national cause and needs to be defended at all cost, like the country's freedom or Civic Platform's lead in opinion polls. Saying last week "we knew this was coming" was just one of many smart things the minister extraordinaire has said in recent days.

The main point Rostowski and Prime Minister Donald Tusk make is that we are tightening our fiscal policy. After all, this year's budget deficit will be 10 billion zloty lower than the original plan, they say. But they have some trouble pinpointing exactly where they saved money, leading some sceptics to believe the ministry was overly conservative in its original assumptions, by design.

However, we got a hint at what kind the savings are on Tuesday. The government "saved" a further 4 billion zlotys with one swift decision to transfer that amount from a special demographic fund (one to be used to help alleviate problems with balancing the pension system in case the current negative demographic trends continue) to finance current social spending. This is the second time such "savings" were generated. In 2010, it raided the demographic fund for 7.5 billion zlotys.

Of course we are also "saving" on the pension transfer change...doesn't it feel great to be "saving" so much.

Wednesday, August 17, 2011

Poland drops 'Fort Knox' plan

Poland's central bank dropped its plan to build a local version of the famed Fort Knox gold depository and recently again put up for sale the Twierdza Zegrze (Fort Zegrze it bought a few years back with a bold plan to build a vault and a data centre in a 19th century fortress. Anyone see the problem?

It turns out that although the general idea was perfect, there were some minor issues. For example, heavy duty equipment could not enter the terrain to carry out the necessary work. Moreover, the Polish version of Fort Knox has been unused for many years and thus was in a much worse shape than hoped, making necessary renovation potentially much more extensive and expensive. The price tag to turn the Twierdza into a real Fort was put by potential developers at some 500 million zlotys, three times the planned budget.

Maintaining the fort not only costs the bank cash (0.37 million a year according to the weekly Polityka) for something that is totally useless, but it also made the bank a target for attacks by various history fanatics, who went as far as calling the anti-corruption bureau CBA.

If you are curious about who is responsible for this ego folly, let me give you a hint. The next time you see Leszek Balcerowicz talk about how to save the global economy, world and even entire galaxy, do remember that NO ONE is faultless.

Tuesday, August 16, 2011

Euro at the right moment, meaning never

Waldemar Pawlak, Poland's cagey deputy prime minister, took a page out of the venerable or villainous Margaret Thatcher's book on a holiday Monday in Poland by suggesting he believed Poland should never adopt the euro.

Pawlak, leader of the junior ruling Polish Peasant's Party (PSL), said Poland should ditch the zloty in favour of the euro at the same time as Thatcher said the UK should adopt the euro: 'at the right moment, meaning never.'  Poland is obliged to adopt the euro as a European Union member, though no mandatory time limit is set.

Pawlak also denounced the "blind enthusiasm" of many supporters of euro adoption and said the Civic Platform (PO)-PSL government's entire strategy to adopt the euro as soon as possible should be re-thought from the ground up.

"Currently, the euro-zone is more like a tattered umbrella than a shield that protects against global market turbulence. We need to fundamentally re-think the pros and cons of adopting a common currency," he said.

Pawlak is savvy. He knows which way the wind blows. Poles increasingly believe the euro would be a step back, not forward. Many know the zloty's depreciation in 2009 during the depths of the crisis preceding the one that to come gave a key boost to the economy by making exports more competitive.

All are aware of the euro-zone's current plight, the mad walk from crisis to crisis, the arrogance, the ignorance, the execution of politics like a child having a nightmare: just wishing it would go away.

The senior ruling PO knows this as well. Announcing any target for euro adoption while the mess continues would be idiotic. The recent crisis has shown that countries with competitiveness issues (whether Greece or Portugal or Poland) are better off outside the euro-zone than inside.

Pawlak is very often wrong. On this, he's right. Don't expect Poland to have the euro for at least six or seven years.

Thursday, August 11, 2011

Here I am to save the day

Jan Vincent Rostowski is a mild-mannered regular guy most days. Just another humble civil servant trying to make his way in this crazy old world of ours. But throw in a market crash, add a currency crisis, toss in some extreme volatility and in the humble man's stead comes Jacek Rostowski, finance minister extraordinaire.

Rostowski transformed into Jacek again on Thursday when he jetted back from his holiday early -- yes, did you hear that Ms. Angela Merkel, early -- to save the day.

"I could see the situation coming and booked my ticket (home) for an earlier date," Rostowski told radio station TOK FM. "[…] But I also spent much of my vacation talking on the telephone to Warsaw, Brussels and London. However, I still feel better here."

We feel better with you here, Jacek. Before, we were lost, perched on the precipice of financial disaster, one step away from a market and mental meltdown. Now we can rest easy.

But our very own finance minister extraordinaire doesn't only solve Poland's problems. He's far more potent. He could solve the EU's problems as well if they let him. For instance, Rostowski said he felt the European Central Bank's recent decision to buy beleaguered Italian and Spanish bonds on the market was absolutely needed.

"This should have been done much earlier," he added. Take that Trichet.

Rostowski's presence had an immediate impact. The Swiss franc began weakening sharply, falling by over 20 groszy just in the afternoon.* All I know is I can rest easy. My money is safe.

* It was very very loosely related to Rostowski's return, though related isn't really the right word.

Wednesday, August 10, 2011

Tusk to voters: We don't care

CHF/PLN over last 12 months. Source:
"Where are you Mr. Prime Minister?" So asked main opposition leader Jaroslaw Kaczynski on Tuesday as global markets plunged and the zloty's value sank. PM Donald Tusk replied Wednesday, holding a presser to tell Poles...the government sold 6 billion zlotys in bonds on heavy demand. You see, nothing is wrong. Nothing at all.

Just in case that wasn't enough, Tusk did try to address potential frayed nerves by telling Poles he could not actually do anything about the markets. He also said it was not his job to weaken the Swiss franc (CHF), whose meteoric rise to record strength of late has massively jacked up the cost of CHF-denominatd loans, and public funds would not be used to help borrowers.

Ha ha ha ha! Take that voters! I am sure Law and Justice (PiS) leader Kaczynski LOVED his answers. Why? Well let's take a look.

Some 700,000 Poles are, or in few days will be, paying 30 percent higher mortgage payments than they paid in January (let's not get nasty and look further back) due to the Swiss franc's jump. At the same time, real estate prices have fallen. Equity on their homes has thus been wiped out or significantly reduced.

Given that the franc has strengthened by about 1 zloty to over 4 zlotys, recently passed legislation aimed at shaving some 0.10-0.15 zlotys off the fees charged by banks is too late and way too little.

One can say that 700,000 Poles is not that many if you compare it to the population of 36 million, so let me rephrase. A full 700,000 households have to deal with a 30 percent rise in their mortgage payments. That is 5 percent of all households and, given the average of two adults per household, affects about over 1 million voters. That in turn is 8.5 percent of all votes cast in the 2007 general election.

Let's darken the picture. According to the daily Rzeczpospolita, the ongoing sell-off has eliminated some 12 billion zlotys from Poles' pension accounts, some 5.2 billion zlotys off their mutual funds, and individual investors playing directly on the market lost another 7.7 billion zlotys. That was BEFORE Wednesday's drop of over 5 percent.

Who are the most likely victims of this situation? Poor, small-town pensioners who vote for PiS regularly? Or rather young, well-educated big-city families that should lean towards Tusk's Civic Platform (PO)?

Oh, and the market also took Prime Minister Tusk's soothing words very well: the Swiss franc strengthened to well over 4 zlotys. Double ouch.

Tuesday, August 09, 2011

Would have, should have...

Lots of strange interesting things happened in Poland in the past two weeks during our summer R'n'R that we would have written about. They run the gamut from the sad to the shocking and everything in between. Here's a quick review of the twists and turns in Poland's recent history.

From rags to riches to dust
It was a shocking, tragic end to one of Poland's most intriguing and colourful politicians. Andrzej Lepper most likely committed suicide on Friday, August 5. If Lepper's life had been a movie script -- the story of a local pig farmer's rise to power via populist protests to being deputy prime minister and then through scandal back to being a nobody -- a tragic death would have been obvious from the outset.

Most of the media immediately forgot Lepper was an "enfant terrible" willing to use illegal means to make his populist point or worse. Instead, many journalists praised him for his political prowess and pitied him for his private woes.

Lepper's big problem was that he made the usual mistake of revolutionaries: he was lured into power, joined a government, was completely co-opted into a system he had fought against, and would up being useless. After all, who needs former revolutionaries?

Love and hate the Swiss franc (though mostly hate)
Poles loved the Swiss franc when they were taking mortgages that were cheaper than similar zloty-denominated ones, disregarding cautionary tales of FX market risks. Some 700,000 Poles decided to bet their mortgages on a single-sided FX bet and for a long time they were laughing.

They are now crying. The Swiss franc is rallying to record strong levels against the zloty and the euro and pretty much every currency. Poles with franc-based mortgages quickly found themselves on the other end of the bet. With real estate prices dropping their mortgage payments skyrocketed and so they are quickly learning to hate the Swiss Franc. 

Poland admits incompetence
Poland's government, after a report from Interior Minister Jerzy Miller, finally admitted the level of incompetence and negligent disregard for regulations that helped end in the Smolensk airplane crash of April 2010 that killed then President Lech Kaczynski, his wife, and 94 others. But the report, besides minor details, is nearly exactly in line with what the Russians said earlier in their own findings.

As a result, Defence Minister Bogan Klich resigned and the military unit responsible for flying government officials was disbanded. The government will now fly only civilian planes.

Oh, and surprise, surprise, it turns out Poles don't care that much about the whole mess anymore. The co-ruling Civic Platform (PO) remains safely in the lead ahead of the opposition Law and Justice (PiS), which for obvious reasons derided the report as a bunch of lies.

Our own Breiviks
They say neophytes make the biggest zealots and Foreign Minister Radek Sikorski is doing everything to prove them right. The now PO member but the former defence minister from the PiS government complained recently to Britain's foreign minister that Poland has its share of Breiviks, people who "believe that democratically elected president and government are traitors and do not represent Poles and Poland."

Now let's think, who could Sikorski have in mind? Jaroslaw, where are you....

We have to apologize. We made fun of the police for having two portraits of the Krakow Unabomber, but it seems at least one of the portraits was good for something since the police apprehended a suspect and are convinced he is the man responsible. We don't know for sure, but the bombings did stop.