Thursday, 1 March 2012


I love leaks. Say what you want, I find data dumps exhilarating and I think much good can come of governments and corporations knowing no data are truly safe. Stratfor is no different.

With freedom of information also comes the freedom of individuals to get their facts seriously wrong. The way to deal with this is constant vigilance and critique, and of course more facts.

It was only a matter of time before the leak turned up some info on Greece. But what would the story be?

Under cover of Wikileaks’ embargo, Ta Nea published its version of the story under the title ‘They ‘saw’ [an] IMF [intervention] in the June 2009!’, initially without any links to the actual documents and relying only on translated and heavily redacted exerpts.The gist of it is that Stratfor 'knew' or 'suspected' an IMF bailout of Greece was imminent way back before even our domestic politicos had begun to come to terms with the idea.

Ta Nea noted that “Stratfor’s hunch raises questions”, although, in the time-honoured tradition of journalism-by-innuendo so favoured by the Greek media its journalists did not think to spell out what these questions were.

I’ll do it for them, as can anyone lucky enough to have had their metaphorical testes descend at the right age: their implication is that Stratfor, whom Ta Nea do not fail to tediously refer to as a ‘shadow CIA’ (as though the original were so transparent that a shadow version were needed), was, somehow tapping into super-duper-secret information of a *PLAN* to force Greece to resort to financing by the IMF. Other Greek journalists and their audiences duly picked up the hint. How, this journo asks, did they know no other creditors [ed: such as these] would be forthcoming?

The email that’s attracted the most attention with regards to Greece can be found here and involves Stratfor guidance to source handlers in Greece. The same advice is duplicated word for word here.

By the way this repetition is in itself pretty telling; for a whole month Stratfor’s understanding of goings-on remained fundamentally unchanged, so much so that they didn’t need to update their guidance. Not quite what a ‘shadow CIA’ would have tolerated, especially if the new some mega-conspiracy was afoot.

There’s also some reference to Greece here, but this comes from November 2011.

Here’s the section of the 2009 guidance that Ta Nea chose to focus on as the most incriminating, word-for-word (colour-blinkered readers with an appetite for word counts can check out the full link which I provide above).



  • Greece has a very complex security situation, there are more anarchist groups in Greece than islands in its archipelagos. Let’s make sure we know exactly what is going on, always report every attack and track down exactly who claimed responsibility if possible.
  • Right-wing movements in Greece are on the rise as well, particularly in anti-migrant violence (Muslims and Albanians being the main targets). 
  • Protests/unions/riots, standard stuff as across the region. In Greece it is important because Karamanlis is not at all popular. Watch for left-right discontentment… This is the key split in Greece and it is very violent.

Political Issues

  • The key issue is how long can Karamanlis survive. Watch for opposition to be rallying around PASOK.

Now I’ve got many issues with all of this guidance. For the most part it shows just how little Stratfor knew about Greece, how poor their sources were and how superficial their approach was.

First, a ‘shadow CIA’ would know the Greek anarchist groups by heart. There aren’t ‘more [of them] than islands in [Greece’s] archipelagos’. Actually there are only a handful. And if Greece’s police claims to know all of them and their members, a ‘shadow CIA’ should at least be able to speak of them in more specific terms.

With regards to Karamanlis’ ability to hold on to power, while Stratfor’s concerns were well founded, it’s anyone’s guess what they meant by ‘opposition […] rallying around PASOK’. One Tweep I’ve spoken to claims that this refers to voters opposed to Karamanlis rallying around PASOK, which is only mildly misguided given the rigid attitude of voters in much of the Greek left and the fact that polls had already convincingly projected a Socialist victory for most of the last two years of Karamanlis’ time in power. But even worse for Stratfor, I think it refers to opposition parties rallying around PASOK. If I’m right, then Stratfor really hadn’t got a clue about how the Greek political system works (some discussion here).

So what did Stratfor really know?

When sovereigns run out of money, they typically call in the IMF. It’s the pattern. And as a network headquartered and best-connected in the States, Stratfor (who, mind you, was paid to pick out complexities in the world, not predict the future) would have been more comfortable discussing the politics of IMF bailouts (read on) than those of other bailouts. They would know more about IMF bailouts anyway because the IMF has performed more of them. It’s easier to imagine the familiar than the unfamiliar. But other than that, Stratfor clearly knew nothing. By their own admission they needed information on whether and if so when the IMF would be called in. Moreover, in contrast to the usual conspiracy theory (regurgitated here by the same popular journo referred to above) that the Socialists fudged the 2009 deficit figures to produce an artificially inflated deficit, Stratfor explicitly base their expectation of a Greek economic crisis on our debt figures to date.

But how, winking Greek journos ask, was Stratfor able to deduce a probability of default in Greece at all?


The reasoning is simple. A country’s debt is sort of sustainable as long as tax revenues are expected to rise in the medium to long term at a rate higher than the interest rate on said debt. Tax revenues rise and fall with levels of economic growth. An over-leveraged country (which Greece has consistently been since the 1990s) is therefore in big trouble the moment its growth rates fall. And by 2008, growth was already understood to have stalled. Back then the expectation was not of negative growth yet, but definitely for growth below interest rates.

Moreover, Greece was already in recession when Stratfor realised (oooeeeeoooo) that we were in the midst of a meltdown. Just how obvious this was on the ground you can assess here. Speculation on the viability of Greece’s public finances had been in the air since the riots of 2008 (try here; here or here). Of course, as with all tail risk, the people most exposed were deepest in denial. But seen from afar, Greece looked much weaker than it did to our domestic audiences.

Worse, though, there is direct evidence that, whatever Stratfor may have suggested, they definitely did not ‘know’ anything.

In a different email from February 2010, practically the eve of the bailout, we find out that in fact Stratfor’s founder, the clearly well-connected George Friedman, thought an IMF intervention was impossible as the Americans would never stand for it:

Paul Volcker regards the Greek crisis as potentially a mortal blow for the EU. He would like to see an IMF tranche. He also said that Nicholas Brady is behind both this and the Volcker principles Obama adopted. When I asked Brady how he expects to get the U.S. to go along with an IMF bailout, he shrugged and said they won't, but that's  the only choice. Volcker is now doubtful the Euro can survive.  Brady is convinced it will. Kissinger thinks Volcker and Brady are missing the real crisis which is in Iran and potentially Russia.

So much for Stratfor’s CIA-like intelligence.

Now ponder this. If an evil financial super-conspiracy were being played out against Greece, somehow I think between Paul Volcker and Henry Kissinger Friedman would have heard of it. Or perhaps the big hitters would have kept it to themselves on purpose in which case Stratfor would have been none the wiser anyway.

The closest we’ve got is Nicholas Brady’s conviction that despite deep concerns the Americans would not tolerate an IMF bailout of Greece at first, but would be won round as there was ‘no other way’. 

But the November 2011 email also reveals just how limited Stratfor’s intelligence was.

I think we have to find out what role the troika plays in handing out the money. What if the money is handed out despite the protests (at least in the media) from  Merkel and Sarkozy's side? That is a possibility right?

Some shadow CIA. Clearly they did’t even have a regular source within the IMF. Im-pressive! More profound insights to come:

Kristen: Need to dive into Greek politics tomorrow to see if we can form a forecast as to whether Papa-G can survive the confidence vote. That's probably going to need to be tomorrow's diary? If the answer is no, then this unwinds somewhat.

Now this is a question any Greek could answer. He would, and he did. Our system is first-past-the-post on steroids and our MPs owe their political existence almost entirely to the party apparatus. Confidence votes are never lost. Even when G-Pap was ousted by his own party he still technically had the confidence of Parliament.

That’s my two cents. No doubt this will spawn a new conspiracy literature and our journos – so passionate about the truth otherwise – will let it grow by not bothering to correct the foolish conjectures they slyly seeded among our more gullible citizens.Others will continue to sift the emails for ever more fantastical 'proof' that Stratfor knew something nobody else did - and that's not the fact that Greece was in trouble.  So what else is new.

As for all of this happening while G-Pap claimed we were flush with cash, wowsers commentators, you've really discovered the most elusive thing of all: that Opposition leaders lie during pre-election campaigns. I called G-PAP out on this the first time he made the claim in the televised debates of 2007. I remember pretending to rifle through my host's couch and going 'it's here, isn't it? You've got the money!' Now tuck your peckers back in and stop looking for apologists everywhere. I've spoken about PASOK's true crimes before and I don't need to prove myself to every malcontent who can spell.


  1. "So much for Stratfor’s CIA-like intelligence."


    Check out the following nutty email from a senior officer for Sratfor dated Nov. 11, 2011:

    Not many people know that Russia is one of Israel's largest military partners and India is Israel's largest client. If a direct conflict between Iran and Israel erupts, Russia and Saudi Arabia will gain the advantages on oil increasing prices. On the other hand, China and Europe are expected to lose from an oil crisis as a result of a conflict.

    I mean, c'mon, is this guy for real or what? And he's a senior officer to boot! "Not many people know that Russia is one of Israel's largest military partners and India is Israel's largest client"? [facepalm] That info. is only a google search away, for souvlaki's sake! Google entry: "Israel, Russia Military Cooperation" for example.

    (Btw, you'll never believe what I got when, out of curiosity, I googled "Israel, Turkey Military Cooperation." No love lost -- or should I have said "lust" -- between these two states ;-))

    As for the "If a direct conflict between Iran and Israel erupts, Russia and Saudi Arabia will gain the advantages on oil increasing prices" bit, all I can say to that brilliant analysis is . . . "duh."

    Btw, I discovered your fine blog via Varoufakis' blog. Like V, you are an eloquent writer.

  2. @lolgreece

    "Here’s what the 2009 guidance states, word-for-word."

    No, this is not "word-for-word".

    THIS is word-for-word.

    You missed about 308-123=185 words, according to OpenOffice's wordcount tool. And what about this gem in the "Economics" section?

    "Greece is essentially in the midst of an economic meltdown. We need all and every piece of information coming out of here. We need to know exactly what is going on and whether/when Greece applies for IMF loan. We may very well witness an absolute economic collapse of a eurozone country. Please watch carefully for any sign of bond auctions or syndicated bond sales. Greece has a lot of debt, how they pop may be determined on what happens to their debt."

    Dated July 17, 2009 (approximately three months before the elections, while PASOK shouted "money, we haz it").

    In the meantime, IMF's chief admitted that he had talks with Papandreou. Surely, Stratfor noticed this.

    Regarding "Ta Nea", Wikileaks' title is "Greece monitored by Stratfor for its moves towards IMF ten months before asking IMF's help".

    Sugestion? You should post an update and correct accordingly.

    1. And I should fill a missing "g" spot above. :)


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