Mish's Global Economic Trend Analysis: Contagion-Begging Actions; Expect Bank Runs Following Cyprus Idiocy; Have Money in a Spanish Bank? Take It Out Now!

Mish's Global Economic Trend Analysis: Contagion-Begging Actions; Expect Bank Runs Following Cyprus Idiocy; Have Money in a Spanish Bank? Take It Out Now!

In Cyprus, a decision was made to screw savers with a 6.75% to 9.9% "Tax" on deposits.

Supposedly this move was made to "avoid unsettling investors in larger countries and sparking a new round of market contagion."

In reality, the action was mandated theft, imposed by EU officials to protect senior bondholders.

How can such an action do anything but cause contagion?

This can cause more Oy-R panic as the negative sum game to minimize losses means people need to get their money out ahead of the competition. Weak I-O policing means that illicit money is penalized the same as honest, a Gresham's dynamic then causes the honest money to continue to do worse by comparison. For example if a business sector is rife with fraud the more criminal Iv agents make more money, if the government just fines everybody with increased taxes to pay for the economic problems then this makes the honest businessmen even poorer and losing market share.

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Bifurcation points are like where Iv branches and B roots grow in two directions, this indicates an Iv-B economy then.


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about 6 hours ago

"Calling the Big Banks’ Bluff" by Frank Schäffler and Norbert F. Tofall | Project Syndicate

"Calling the Big Banks’ Bluff" by Frank Schäffler and Norbert F. Tofall | Project Syndicate

Above all, the G-20’s decision to prop up systemically relevant banks must be revisited. And governments must respond to the banks’ threats by declaring their willingness to let insolvent banks be judged accordingly. A market economy must rest on the economic principle of profit and loss. An economy with neither bankruptcies nor a rule of law that applies equally to all is no market economy. The law that is valid for all other companies should apply to banks as well.

This is the Iv-B response to the crisis, to let banks collapse rather than the V-Bi one of propping them up as zombies.  

CommentsMoreover, governments should guarantee insolvent banks’ loans to non-financial companies, as well as private customers’ current, fixed-term, and savings deposits, by reforming insolvency laws. Certainly, governments should not guarantee interbank liabilities that do not affect customer deposits. An insolvency administrator would manage the bank and ensure that all payments for which a state guarantee is given are carried out properly, with refinancing of these payments continuing to take place via the central bank.

This is a V-Bi aspect of partial insurance, however there can be enough hidden chaos in the system to still bring it down. The problem is still not letting the I-O police and market do their job, they should compensate people who are deserving of insurance and not people who were dishonest in the crisis. The problem should not be moral hazard because this always occurs with insurance, but whether people acted in ways because of insurance that would justify canceling their insurance. For example banks that speculated in a risky way knowing they could become insolvent might not be insured.

CommentsAfter taking these steps, the payments system would be safe. In case of insolvency, a bank’s computers would not be turned off, its employees would not instantly be dismissed, and payment transactions would not collapse. Nor would a run on savings deposits occur, given the official guarantees that they remain unaffected by a bank’s insolvency. After all, even a simple banknote is money only because the government says so, and thus is no different from savings deposits, which means that no saver has an advantage from holding cash. So there would be no need for bank runs.

CommentsOf course, the deliberate restriction of the effects of bankruptcy to accounts other than private current, savings, and fixed-term deposits means that the insolvency of bank A could lead to the insolvency of bank B. For bank B, too, the same liquidation scenario would apply: savings deposits would be safe, payments could be made from its customers’ current deposits, and loans that it granted to non-financial companies would not be revoked.

The Dangerous Myth that Financial Regulation is Unrelated to Financial Crime

http://neweconomicperspectives.org/2012/08/the-dangerous-myth-that-financial-regulation-is-unrelated-to-financial-crime.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+neweconomicperspectives%2FyMfv+%28New+Economic+Perspectives%29&utm_content=Google+Feedfetcher

Long defines the U.S. as engaging in “overregulation,” by which she means greater regulation than City of London banks experience.  That operational definition of regulation demonstrates that she sees financial regulation as having no value, for the “logic” of a race to the bottom is that all nations will be forced to deregulate and desupervise finance.  Some of the rules may remain in place, but they will not be enforced.

There can be a race to deregulate for advantage but this just creates more of an Iv-B and V-Bi disconnect, this is not always desirable if it makes an Iv-B boom and then bust.

Long’s anti-regulatory logic should cause us (and her) to ask a series of questions.  If financial regulation has no value, then the race to the bottom is a distraction – we should immediately eliminate financial regulation regardless of what the City of London does.  Conversely, if financial regulation were valuable to society it would be vital to break the perverse dynamic of the race to the bottom. If the U.S. adopted the “clear, simple rules” that Long favors (whatever those rules are) and the UK adopts “clear, simple rules” that are much weaker in restraining banks what does Long want us to do in response to the UK’s race to the bottom?

Iv-B can have a race to the top in a boom or a race to the bottom sometimes as a bust but also this can be more controlled such as selling short. A boom is where people race to invest because prices will go up, a race to the bottom of floor is where the minimum price will be and a turn around point. Sometimes these banks can be in a race to the bottom where they need to divest themselves of problem assets or restructure, those that do this first will have a competitive advantage in a coming boom. At other times there can be a race to the ceiling for regulations where investors might flock to areas perceived as less corrupt, this happened for the US in the GFC where money went there. 

 ...

“[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”  George Akerlof (1970).

This only occurs in a disconnect when I-O regulators are weak.

M&A bankers

The Epicurean Dealmaker

 First of all, it is important to understand both what M&A bankers are good at—where they bring true value—and what they are not good at. M&A bankers are good at collecting, digesting, and sharing competitive market intelligence; identifying and engaging good or likely counterparties for actual or potential deals; negotiating purchase price, structure, and other deal terms for the benefit of their clients; and helping parties to an agreed deal withstand the vicissitudes of fate, clashing egos, and unruly markets to bring a deal to the closing finish line. They are connectors, networkers, traffickers in information, and deal-doers. Fixers.

When the i-O police are strong Iv agents usually produce positive sum games.

What M&A bankers are not—notwithstanding their propaganda and self-perception—is idea men (or women). It is not their job to think big thoughts, to construct grand strategic visions of their clients' and their clients' industries' futures, to be thought leaders. That is their clients' job, the job of their customer's CEO, Chairman, and/or Board of Directors (and sometimes the management consultants these executives hire to do their thinking for them). While M&A bankers often talk about bringing deal "ideas" to their clients for discussion and action, what they really bring is opportunities.

Strategic visions are usually V-Bi where different and often competitive ideas are brought together into a synthesis.

This is as it should be, for no M&A banker knows as much about a company or its industry as that company's senior executives (unless the latter are congenital idiots).

V management needs to know about the whole team's activities including some of the Iv actions, the Iv agent usually just needs to know their own specialty. 

The CEO and his or her Board should develop over time a well-reasoned view of the other companies in their industry, their relative strengths and weaknesses, and their potential fit as acquisitions, merger partners, or purchasers of their own company. What a good M&A banker can bring to the discussion is a well-judged view of the strategic visions, deal-making proclivities, and potential competitive responses to possible transactions the client's peers are likely to have.

They look for competitive advantages where often V management are looking to get along with other V companies like trees interlocking their canopies. Iv agents with too much power might cause trouble for V by making another company's agents competitive too, then the V teams might be brought into conflict.

In addition, the M&A banker can provide an informed view on how the financial markets and company shareholders would react to a particular deal or company strategy, and—in the case of a particular deal—some sense of the probable clearing value of a particular asset.

Iv agents usually handle the sale of V assets in the I-O market.

Leverage | Above the Market

Leverage | Above the Market

When I was *much* younger and a relative neophyte on Wall Street, the ”carry trade” was a new trader staple.  It arose out of a 1985 agreement whereby the U.S., Japan, the U.K., France and West Germany sought to lower the value of the U.S. Dollar against the currencies of the other nations. It almost seems quaint now.

Basically, the trade involves a play on currency yields. It consists of borrowing a low-yielding currency (in those days, Japanese Yen) and investing in a currency that is offering a higher yield (in those days — hard as it may be to believe now – typically U.S. dollars).  The yield difference provided the profit (after costs). Currency risk provided the largest potential problem. 

Most traders saw this as easy money with low risk and “levered up” to give the trade some real juice since the initial transaction itself only yielded relatively small profits. Leverage was needed to accentuate and accelerate returns.  Thus a feedback loop of sorts was created and kept repeating, with leverage extending to ten times and often much higher.  This trade was a consistent and enormous success for a number of years.

Iv-B speculation grew largely unmonitored because of weak I-O policing between countries, this high leverage crashed before reaching a ceiling because the Russian default reached its ceiling and collapsed. Financial instruments like these mutate in new innovation growing like weeds and collapsing when the resources are exhausted.  

In 1995, five years after the Nikkei 225/property bubble had spectacularly burst, the Kobe earthquake hit. Japanese interest rates (which had been inching down since 1991) fell below 1%, and the Yen became a funding currency for various forms of speculation all over the world.  At that point, the Yen had been weak and kept on depreciating sharply for several months relative to the USD. Still mixed and weak economic data were coming out of Japan and short-term interest rates there were 0.25 percent while they were closer to 5.5 percent stateside.  Massive carry trade volume using the Yen led to sharp increases in leveraged positions by traders who had been shorting the Yen to make the carry trade bet.

But then the Yen started to appreciate – by 9 percent in one month alone – largely due to Russian debt problems — and the spread between Japanese and U.S. yields tightened dramatically in a flight to quality and liquidity.  One piece of good news from Japan (the Japanese government offered a plan to recapitalize its problem banks) and in a matter of 72 hours the Yen had appreciated by another 12 percent. Julian Robertson’s Tiger Fund lost $2 billion dollars in 48 hours on the Yen unraveling.  LTCM lost even more; it was forced to restructure its operations and was bailed out via a deal brokered by the Fed (and its positions eventually wound down over a year or so).

After years of success, the carry trade death spiral was quick and violent (only to be resurrected in various forms thereafter).  Ongoing carry trades unravelled as quickly as the Yen rallied; margin calls were triggered, levered positions went belly up and the entire financial system went into seizure. The Fed was forced to cut the Fed Funds rate in between meetings by 75bp (in spite of still solid domestic GDP growth) in order to avoid a financial meltdown, a collapse of U.S. financial markets and a global recession.  And, as always, the principals in the trades kept asserting that the models were fine, it was the markets (and the world) that were wrong.

In the roots and branches of trees there is little liquidity or water used, this is the nature of the structure to leverage this liquidity. When such a system collapses it then does not have enough liquidity to work without leverage. It is like hydraulics in nature, without the narrow and longer pipes hydraulics cannot move things faster and for longer distances.

Leverage — like excessive speeds on the highway — kills and often kills quickly.  Whether that leverage is undertaken by hedge funds (as in the example above, even though LTCM resisted being labelled a hedge fund), Wall Street banks (think Lehman Brothers) or retail consumers (think people with multiple investment properties in 2008), troubled times are very difficult to manage by firms and people laden with excessive debt, especially when the items purchased using the leverage (and acting as collateral) are declining swiftly in value.  And the more illiquid they are, the worse the problems become.

Spain's "Terrible And Inhumane" Situation Prompts End To Evictions | ZeroHedge

Spain's "Terrible And Inhumane" Situation Prompts End To Evictions | ZeroHedge

Spanish Prime Minister Mariano Rajoy will temporarily halt evictions of the most vulnerable families as the government devises measures to help people stay in their homes after a woman killed herself in Baracaldo.

The Spanish people are experiencing “terrible things and inhumane situations,” the premier said at an election rally in Lerida, Catalonia last night. The government “will defend the most vulnerable families affected by the evictions and act with seriousness, sensitivity and great humanity,” he said.

Amaya Egana Chopitea, 53, threw herself from the window of her apartment when representatives of Spanish bank La Caixa arrived with locksmiths to evict her yesterday morning, El Mundo reported. Egana and her husband’s mortgage debt of 164,000 euros ($208,640) rose to 213,000 euros because of charges and interest payments, while their home had been auctioned for 190,000 euros, the newspaper said.

Rajoy is searching for a formula that can help families that have fallen behind on mortgage payments without increasing the strain on lenders trying to clean up about 180 billion euros of bad real estate assets, the legacy of a 10-year building boom. Banco Popular Espanol SA (POP) today offered shareholders the chance to buy new stock at a 32 percent discount as it tries to plug a 3.2 billion-euro capital deficit.

When countries become poor in a quasi depression they can collapse into Roy, then G public property can be more efficient. Foreclosing on homes to resell at a fraction of their value causes more bank bailouts, the problem is the Biv system is efficient only when resources are abundant. It is then better sometimes to nationalize some housing and banks, then privatize them again when the country returns to Biv prosperity. 

A Feral Pit Of Total War | The Daily Capitalist

A Feral Pit Of Total War | The Daily Capitalist

As ever, Gillian Tett, perhaps the FT’s finest columnist, nailed the problem in her piece from Thursday, ‘Banking may lose its allure for the best and brightest’. Her point, in essence, was that the banking industry is now reverting to the type last seen during the Great Depression. In the years running up to the Great Crash of 1929, finance’s share of (US) GDP rose from 2% to 6%. Banker pay rose from parity with non-banker pay to a 1.7 times multiple. After the Crash, finance shrank sharply (as one would expect) and banking jobs disappeared. But there was a lag then, just as there seems to have been one in the aftermath of the Financial Crisis that exploded in 2007 and which is still ongoing because our economies are in thrall to central banking and political idiots. As Ms Tett observes,

“Back in the 1930s, bankers’ relative wages did not start falling until the mid 1930s and the size of the financial sector, relative to GDP, peaked in 1932, not 1929. That was partly because the entire economy was shrinking after the Wall Street Crash. But another factor was that the Glass Steagall reforms [which separated commercial from investment banking] were not implemented until 1933. Arguably, it took even longer until bankers finally realised that the nature of finance had changed: it was no longer purely a profit-seeking, speculative game but was shaped by more of a utility mentality, thanks to government pressure and deleveraging (and, subsequently, the Second World War).”

As I-O regulations are strengthened and policed Iv agents find the competition for chasing a smaller amount of profits is too strong, some then leave. Also an Iv-B bubble is based on innovation and counter innovation, when these are exposed in the crash there is no secrecy that enables them to be rebuilt competitively. Consequently they are more stagnant waiting for other innovations to come. These start at B like with liar loans so that Iv builds counter innovations such as subprime on them. The trees then must start with new B roots to regrow in the humus of the GFC. 

Her conclusion is sobering for anyone still toiling in the banking hinterlands:

“According to recent calculations… the relative size of finance in the US economy did not even peak until 2010, not 2007; as in the 1930s, the really stark relative shrinkage might lie ahead.

Savings Deposits Soar By Most Since Lehman And First Debt Ceiling Crisis | ZeroHedge

In total, there has been an increase of $112 billion in deposits in savings accounts in the past month alone, roughly the same as the total non-M1 M2 momey stock in circulation.

Ironically, it was only yesterday that we demonstrated the relentless surge in bank deposits despite the ongoing contraction in total bank loans, and explained how it is possible that using repo and rehypothecation pathways, that banks are abusing the endless influx of deposits into banks and using this money merely as unregulated prop-trading funds, a la JPM's CIO. In other words the "money on the sidelines" now at all time record highs, is anything but, and is in fact about $2 trillion in dry powder to be used by the banks as they see fit.

The V-Bi parts of the economy save after having been burned by the Iv-B deceptive parts that took their money sprouting and collapsing like weeds. However with weak I-O policing this money can go to Iv-b speculation again instead of building healthy businesses.

But most importantly, we showed how even as those happy few who can still afford to save, are fooling themselves int believing that they are pulling money out of other assets and storing it in what they perceive to be electronic mattreses at their friendly neighborhood JPM, Wells or Citi branch, and thinking this money is safe and sound. Alas, nothing could be further from the truth.
Because by depositing money into banks, ordinary Americans (and companies) are merely providing even more dry powder for the banks to trade on a prop, discretionary basis, either as directly investable capital or as asset collateral, and by handing over their hard earned cash to the banks are assuring that the scramble to bid up any and all risk assets continues indefinitely

A Photograph, Not a Circuit Diagram

The Epicurean Dealmaker: A Photograph, Not a Circuit Diagram

A Photograph, Not a Circuit Diagram

Except in the simplest cases, one cannot expect observation alone to reveal the effect of the use of an aspect of economics. One cannot assume, just because one can observe economics being used in an economic process, that the process is thereby altered significantly.

The Iv-B parts of an economy are hidden, deceptive, and also mutate to avoid being observed. They actively misinform observers of their nature because gives them a competitive advantage compared to others who show their plans. Statistics in a V-Bi part of the economy then do not tell what is happening, if they do then the Iv-B parts will change so they are no longer accurate. This is a defect in the use of statistics for economics that cannot be fixed by its mathematical nature.

It might be that the use of economics is epiphenomenal—an empty gloss on a process that would have had essentially the same outcomes without it, as Mirowski and Nik-Khah (2004) in effect suggest was the case for the celebrated use of “game theory” from economics in the auctions of the communications spectrum in the United States.

— Donald MacKenzie, An Engine, Not a Camera: How Financial Models Shape Markets ¹

Observers often just see this gloss or outer skin like a photograph, the circuit diagram is Iv-B and kept secret. if not then a competitors could work out what a bank was going to do with some certainty and then make money from its stock or anticipating its business moves. It is the same in poker, players must bluff or lose.


Before I begin, I think it is fair to concede our Cassandras’ contention that large commercial, investment, and universal banks² are highly complex, risky, and opaque institutions.

This is iv-B.

It is also fair to say that most of the bad or downright naughty things which have occurred in the financial sector over the past several years (although not all; viz., Bernie Madoff) have bubbled up from the bowels of large, complex, opaque banks and their brethren.

This grows in dark places most free of I-O regulations because those that don't do this lose in a Gresham's dynamic.

But the notion that there is some sort of magical accounting regime which could simultaneously shine sunlight into the deepest reaches of multi-trillion-dollar global financial institutions, clearly convey the actual and potential risks these institutions face or create in their daily operations, and therefore usher everybody into a new era of financial transparency, trust, and mint juleps on the sun porch is simply ludicrous. It completely misunderstands what accounting is and what accounting is for.

It is like shining lights into dark cupboards looking for Oy-R contagion like cockroaches, they learn to anticipate this giving a false sense of security.

It is a rookie mistake.

...


Even the much maligned (by me) Securities and Exchange Commission understands the proper relationship of public accounts to equity investors. Remember that the SEC’s objective for public reporting is not to help you fully understand a business. It is to disclose all pertinent and relevant facts and risks about a business so an investor can make her own informed decision. Banks are big, opaque, risky, and complex. What do bank financial statements tell us? They tell us banks are big, opaque, risky, and complex.

They can also deceive about some aspects like special purpose vehicles to hide losses, this hiding of problems from each other can give a false sense of security in the industry and a boom which crashes when these chaotic cracks surface.

That sounds pretty accurate to me. The kind of disclosure our doughty duo proposes, including ludicrously simplistic “worst-case scenarios,” would not increase investors’ understanding of the real risks inherent in the mind-bogglingly complex business of global finance. In point of fact, these are only poorly or dimly understood by the very bankers undertaking them.

Iv-B businesses are not even well understood by all of those in them because they deceive each other, the management is often V making money from this deception like employing crooked salesmen and learn not to ask too much. This can backfire when these Iv salesmen collapse the company with fraud or theft.

Instead, it would promote a sort of unwarranted confidence that would be both dangerous and misleading.

Equity investors should be terrified of banks. After all, they are the last capital providers in line in famously and ineluctably evanescent institutions, firms whose very existence can wink out over a weekend if the depositors, counterparties, and institutional investors ahead of shareholders decide to take a powder. That is the nature of banks, then, now, and always. Banks are structurally short liquidity. When liquidity dries up, or becomes prohibitively expensive, banks fail, and they fail fast. It’s as simple as that.

China’s brokerages turn shadow banks

By Simon Rabinovitch in Beijing

Chinese securities brokerages have emerged as a crucial new link in the country’sshadow banking industry, a development that underscores how financial risks are spreading more widely in China.

People familiar with brokerages say they got started in shadow financing around the middle of last year, taking control of funds that banks wanted to remove from their balance sheets.

A growth in Iv-B banking as companies try to find ways around I-O policing and the market. This may grow exponentially to a ceiling and then crash to some degree. These off sheet assets become hidden and deceptive as Iv-B. They are not easily manageable because they are so hidden, they also grow in the cracks where they are not seen by regulators. 

New industry data confirm this development and reveal a dramatic increase in such activity in the fourth quarter. For 2012 as a whole, shadow financing via brokerages appears to have increased almost 600 per cent.

Western rating agencies have warned that a rapid rise in off-balance-sheet banking activity is a threat to China’s financial stability. But Chinese regulators have countered by saying the risks are manageable. With the country’s financial system long dominated by state-run banks, they also view shadow lending as a byproduct of their attempts to unleash more market forces in the allocation of capital in China.

Economist's View: 'How To (Maybe) End Too Big To Fail'

The Big Banks: Too Complex To Manage?, Central Banker, Winter 2012, FRB St. Louis:

... How To (Maybe) End “Too Big To Fail”

So, how will we deal with the megabanks? Emmons outlined two basic approaches: radical and incremental. The radical approach involves structural changes imposed on the banks themselves or the creation of a different legal definition of what a bank is and what it can do. Radical proposals include:

• Reduce their complexity and size – Revive the 1933 Glass-Steagall Act (partially repealed by the 1999 Gramm-Leach-Bliley Act) prohibiting combining commercial banking with investment banking or insurance underwriting. Also, reduce their size by placing limits on banks’ assets or deposits. However, Emmons said this proposal likely wouldn’t succeed because combining commercial and investment banking was not the main source of problems; in fact, many of the “too-big-to-fail” institutions that caused problems during the crisis would have been allowed to operate under Glass-Steagall.
• Create “narrow banks” – Separate payments functions from all other financial activities. Such a bank would take deposits and make payments but not make loans except those that have very little default risk. Emmons said this proposal wouldn’t be successful either because such banks are not likely to be viable. Narrow banks likely would seek to make riskier loans to improve their profitability, while non-narrow banks would seek to enter the payments business in one way or another.

In Aperiomics large banks and corporation need not be a problem, often they give stability to the system because of their size and ability to absorb chaotic shocks. Also being bailed out by the government is a kind of implicit insurance which is how V maintains randomness, people in V government such as Republicans are part of their team. The problem was the IV branches under these V companies, they used deceptive and predatory ways to profit from B workers with subprime. They also competed against each other with too much leverage in derivatives, this is like making trees that are weak in the V leaves because the branches were too long and fragile. Propping up these branches can create zombie banks if they are too large to ever be stable. Large V banks can stifle the growth of smaller banks like trees because of their ability to be bailed out, they can then do more risky business than the smaller banks can because of this risk premium. 

Glass Steagall in effect separated Roy and Biv functions of banks, predatory trading with high leverage is more Oy with Y banks benefiting from this. Often there is no real desire to benefit both parties, just to make the counterparty lose money. Commercial banks however usually benefit both parties as a loan is made and is paid back, when these are combined it can be like putting parasites in to a healthy forest where they use the formerly Biv money to grow even more predatory as well as to loot the wealth of these trees. Often there is a resistance to this process in a tree over time because of evolution, however the sudden repeal of Glass Steagall was more like a desire to loot these healthy Biv banks when they had few defenses against it. 

The problem is weak I-O policing so that fraud and theft are not prosecuted, this is more common in Y and V because they are separated from the I-O police by a layer of Iv-Oy agents that can be deceptive to protect them. Consequently these agents needs to be used as whistle blowers and offered plea bargains to get at Y-V, if not then they continue to side with Y-V until the problems become much larger.

“In fact, we have chosen not to pursue radical approaches to solving the ‘too-big-to-fail’ problem,” he said. “Instead, we’re implementing incremental—albeit significant—reforms of the existing legal, regulatory and governance frameworks in which banks operate.” Meanwhile, bankers, regulators and legislators won’t know whether the regulatory reform efforts will actually work until they are actually used. Those efforts, which have sparked a lot of profound debate throughout the financial industry, include:

• The 2010 Dodd-Frank Act – The law includes living wills for orderly dissolution, capital requirements, stress tests, risk-based assessments on deposit insurance, FDIC orderly liquidation authority, the Volcker Rule and investor protections. “These are all pushing banks to be more effective in internal discipline,” Emmons said.
• Basel III Accord – The third round of the Basel Accords is looking to improve the quality of bank capital and make other changes related to capital so that big banks demonstrate that they “have more skin in the game,” Emmons said.