FOR GOD'S SAKE STFU, EPISODE III: THE VASSAL STATE STRIKES BACK

Yup, you guessed it. This is the sequel to this post, a propos  the latest three-notch downgrade of Greek debt by Moody's.

This news initially moved Greek bond yield spreads wider, as some dumb money will react in a knee-jerk fashion to anything that sounds like bad news and some clever clogs make excellent returns on this idiocy, as well they should. If that's all there is to it, spreads should come back down very shortly as there is no incremental information in the Moody's assessment. Greece is too closely watched by now. In fact, today's debt auction returned yields only fractionally higher than the last one, well within reason if you ask me, and the Euro was up. The real fundamental reason for our bond yields going up is that we've missed our revenue targets again, despite twice adjusting them downward in the face of a steeper-than expected GDP fall..

Certainly the implications of a Moody's downgrade (our current credit rating implies that we have a 20% chance of defaulting in the next 5 years) are much more optimistic than the markets' implied probability of ca 59% (source is this CMA report, which is slightly dated, but I'm not paying for an update!). In fact, they are more optimistic than the market was in Feb 2010 - pre-bailout! If credit rating agencies had any credibility, the Moody's announcement would tighten, not widen our spreads. Cue trivia item: in Russian, "Moody's" sounds a bit like the word for "bollocks".

Mind you, on the basis of this statement by S&P, it appears to me that the credit rating agencies have the same probability-adjusted haircut in mind for our bondholders as the markets do, but tend to interpret the data in favour of bigger haircuts with smaller probability. I would expect credit rating agencies to be biased in this way, as an abundance of low-probability, high-impact default risks helps generate demand for their services. Or perhaps I'm giving them too much credit and they just don't know what they are doing.

Now I don't envy our Finance Minister. He has to lie, score cheap points for internal YOMAMA-nomic consumption and look macho while doing it. And that's assuming he's a straight guy and our Finance Ministry genuinely looks after the people's best interests. It's a bum deal (like the one I offered Yorgo here). If I were in his shoes and had to peddle the same bullshit as he does, here's what I would have said:

A: Moody's have lagged the market's implied default probability for Greece throughout the current turmoil and their two-notch downgrade only reflects their need to be taken seriously by the markets; I wish them well but am unconcerned by their latest guesswork on the chances of Greece defaulting. As things stand, I think markets have finally caught up with our fiscal situation in March 2010 and Moody's are about a year behind them.  Let me tell you what they will all be catching up with for the rest of the year...

And this is what he actually said (emphasis mine):

The rating downgrade announced by Moody’s today is completely unjustified as it does not reflect an objective and balanced assessment of the conditions Greece is presently facing. Furthermore, its timing and the multi-notch nature of the downgrade are incomprehensible and raise a number of questions. 

[…] The arguments made can in no way be justified by the additional information available since Moody’s last downgrade in June 2010 and the progress achieved since.   

[…] Ultimately, Moody’s downgrading of Greece’s debt reveals more about the misaligned incentives and the lack of accountability of credit rating agencies than the genuine state or prospects of the Greek economy. Having completely missed the build-up of risk that led to the global financial crisis in 2008, the rating agencies are now competing with each other to be the first to identify risks that will lead to the next crisis.  At a time when the global economy is fragile and market sentiment is sensitive, unbalanced and unjustified rating decisions such as Moody’s today can initiate damaging self-fulfilling prophecies and certainly strengthen the arguments for tighter regulation of the rating agencies themselves.

You see the man knows what we also know. But he reverts to the old mantra of evil specuLOLtoring and calling for regulation of the CRAs. Don't get me wrong, the CRAs have severe faults and getting their ratings the hell out of regulatory capital requirements is, for instance, a hugely important agenda. But threatening to tell our mum every time they downgrade us to WAY above where our credit rating should be makes Greece look ridiculous.

Why does he do that? Because he can get away with it. Dagong, the Chinese credit rating agency, has long held that Western CRAs are too soft on Greek debt and given us the same rating as Nigeria. Did he complain? Did he hell. He kissed the dainty toes of the Chinese. As well he should because they were buying our highly speculative bonds.

Please Mr. Papaconstantinou. We only have a few months to go now. Try not to tarnish the reputation of the Greek people any further with these tactices.



In the age of the internet, it takes literally seconds to find this old statement by the head of Greece's public debt management agency (the guy actually in charge of selling our debt), which welcomed a single-notch downgrade by Moody's in the face of market expectations of a double-notch downgrade. No agenda back then, no specuLOLtoring. Just good old Moody's refusing to follow the pack and giving us a break, despite people calling their rating 'ridiculously' high. Three months later we were of course bailed out, so Moody's had obviously missed a number of tricks. Strange, by the way, how statements are now made by the finance minister and not the head of the PDMA. It's politics, not trading.

LIES, DAMN LIES AND INTERVIEWS WITH LEADING ECONOMISTS

Σημείωση: Αν βρεθήκατε σε αυτή τη σελίδα στην προσπάθειά σας να βρείτε τις πηγές της φερόμενης ως συνέντευξης του Mark Weisbrot με τίτλο Η ΑΡΓΕΝΤΙΝΗ ΔΕΝ ΗΤΑΝ ΤΙΠΟΤΑ. ΕΣΑΣ ΘΑ ΣΑΣ ΕΞΑΦΑΝΙΣΟΥΜΕ, δείτε την αποστομωτική απάντηση του ίδιου του καθηγητή παρακάτω. Επίσης ρίξτε μια ματιά και σε αυτή τη σελίδα. Βοηθήστε κι εσείς να εξυγιανθεί η Ελληνική μπλογκόσφαιρα, όχι με λογοκρισία, αλλά με αντίλογο.




An endlessly copy+pasted passage has reappeared in Greece in the last few months, worthy of our blogosphere's great tradition of making stuff up and of LOLGreece’s smaller but proud tradition of calling Orange Blog writers out for the untalented amateurs that they are.


In summary, the piece, entitled ‘Argentina was nothing – you will BE wipeD out!’ cites an interview, supposedly with Mark Weisbrot, co-director of the Center for Economic Policy Research.


“Weisbrot” is quoted as saying that the IMF intervention in Greece will be cataclysmic in its consequences, uprooting the Greek welfare state and abandoning the Greek people to exploitation from all angles through the labour market, asset and resource sell-offs, and the drugs trade – unless, that is, we band together in violent resistance and demand the payment of reparations from Germany.


First things first. The document is a hoax. How do I know? Because Weisbrot himself says so. This is obvious even to a fairly casual Googler.


Clue no. 1 that this is a hoax originated by illiterate idiots:


“Weisbrot” writes:

“Indeed [I hear] simultaneously in many circles in Geneva where I live, that Switzerland will give as a gift to Greece, without [claim of] restitution, 100 billion, not to lead a European country, with such tragic consequences, [into] the mouth of the lion.”

No Greek post-bailout meme is complete without a miraculous 'no-strings money' theory. First we had the Russians and the Chinese, and now an even more incredible candidate. In this one, "Weisbrot" claims that he has heard rumours of a EUR100bn bailout of Greece, no strings as per usual (in fact in this case we would wouldn’t even pay the principal back), which would see Switzerland, a non-EU and non-Eurozone member, hand over 28% of its GDP to us, just to keep the Euro from collapsing. Quite how the Swiss would find this money, let alone justify the transaction to their people, is never made clear but I guess we are to assume that, since Switzerland is where every high-net-worth individual’s savings end up, the Swiss have access to endless amounts of cash. This Underpants Gnome logic would be dismissed out of hand in any rational discourse, but for some in Greece it represents pretty mainstream thinking.


My theory is that the Swiss have been dragged into this ridiculous hoax because of the Swiss Central Bank’s desperate attempts to keep its currency competitive and its lenders from recognising huge losses as the Euro and Eastern European currencies came under pressure and wrath-of-God money started flowing out of the rest of Europe and into Switzerland. The Swiss Central Bank did make purchases that are not orders of magnitude below EUR100bn, so perhaps a desperately confused mind could link their purchases to Greece’s IMF loan.


That a leading economist would ever need to cite Genevan gossip on an issue as big as this one is ridiculous. And the fact that no newspapers or other news outlets, let alone the bond markets, have picked up on this monumental aid offer is beyond belief. But even if one overlooks this, there’s the very small matter of Weisbrot’s residence. Mark Weisbrot doesn't actually live in Geneva. He just doesn't. He lives in the States, where he works, and although he spends a great deal of time in South America he most definitely doesn't do so in Switzerland.


Clue no. 2 that this is a hoax promoted by illiterate idiots:

“[of] the IMF the impression [was] that the Argentines believe[d] [us to be their] saviors.”

“They all [felt] that we [had] saved the country [which] was corrupt and [had] incompetent governments. It was incredible what correspondents broadcast, when we saw the truth with our eyes on every street in every neighborhood. You need to wake up in Greece now before it's too late, must at all costs avoid the IMF.”

Amazingly, the article seems to imply that Weisbrot himself worked for the IMF, and earlier editions say this explicitly. This is of course also not true.


I believe this muppetry arises from a confusion of Weisbrot’s testimony, and his links to Oliver Stone’s South of the Border, with the similarly-themed but much less factual Confessions of an Economic Hitman by John Perkins, which was recently broadcast in documentary form in Greece, to a very positive reception by our chattering classes. In fact, it is probably this that reignited the “Weisbrod” interview meme.


Thanks to the excellent work of Diagoras and a public apology from ireporter to its readers, I now know that the hoax started when a real Weisbrot interview was posted in February 2010 here alongside an unattributed set of a comments which Olympia attributes elsewhere to an ex-IMF Vice President. Due to the two men sharing a salutation ("professor"), and the lack of a clarification to the effect that they are two separate sources, third parties including myself have deduced that all of the quotes in this article were attributed to Weisbrot. While I cannot know what the intention was, I note that Olympia also posted this, in which they claim to be the originators of the Weisbrot interview.

Whatever the case, one third party did believe the interview to be Weisbrot's and helped it go viral. Bits of the Olympia post were mixed with bits of another article by a well known Greek journo and then published, in April 2010, by ireporter (who, to their credit, have issued a full correction here). The hoax article then went briefly underground where it mutated around May and then circulated via email, probably until June 2010. I can trace the mutation to May 2010 because a reference to mass layoffs in the definitive version suggests it must be more recent than mid April but the reference to Swiss monetary intervention makes it earlier than June.

The first blog coverage of the 'definitive' version of the hoax was in that very month, and it appears to me to be this one.  But as with all things ill-researched and sensational, this story quickly made it onto Tro-ma-ktiko, our premier ‘Orange’ blog. In fact, it was published twice by the ever-astute Tro-ma-ktiko staff: once in Nov 2010, and once in March 2011, this time with a photo of Weisbrot in mid-press-conference, which would imply to the casual reader that his statements were official and on-the-record. Both instances were in fact published after Weisbrot himself had been interviewed by Epsilon and categorically stated that the ‘interview’ reported by Orange Blogs was a hoax. Even worse, it’s since been taken up by the Greek Union of Chemical, Pharmaceutical, Cosmetic and Related Company Employees (in Greek here and in Google-translated English here) and will no doubt be with us for ever more.
 

It is possible to trace the 2011 resurgence of this meme back to some of its origins, as Tro-ma-ktiko cites e-parembasis, which in turn cites Ramnousia. This only goes back to March 2011, and the trail ends here. But the article resurfaces in Nov. 2010 in sfrang2, and [bingo] in the widely read Athens Indymedia whose anarchist readers will have greatly sympathised with the following exhortations by “Weisbrot”:

“[Believe me,] the only way [for you] to survive is to come out every day for one month, as one and united, 8 million people, adults I mean, onto the streets until all, I mean all, daily operations are suspended. Only in this way will the EU be coerced enough to give money, and interest-free at that, of which they have plenty.”

“In Argentina [in response to the] actions taken by the IMF, the [people] came [out into] the streets with axes, saws and scimitar[s] and burst into banks, media and government buildings and slaughtered, literally [decapitated] bank employees, managers, journalists, who [were] on top of corruption and fraud, and executives and members of industry, members of the Government, government [spokespersons] and certain members of the Government of the [Argentine] Ministry of Finance.”

In fact the meme resurfaced with no major alterations on Newstoday, on 29 May 2011.  
 
In fairness to the man, I should say that the real Weisbrot is indeed a very vocal critic of the IMF, as his Guardian column quickly reveals to even the most casual reader. He has signed a petition for an investigation into the causes of Greek debt, which I would strongly subscribe to, but has never called for Germany to pay reparations, to the best of my Googling ability.  He is particularly critical of the process of ‘internal devaluation’ taking place in Greece and far from arguing for our allies to save the Euro, he in fact argues that we should leave the Eurozone, as should Spain and indeed everyone else. I can agree with him on this as well, although I can’t think that we will agree on much else. He very much resents suggestions, including from the Greek side, that we need Europe’s help in order to manage our affairs. I don’t. I regret that it is true but it is. At any rate, the man’s positions on Europe are strongly at odds with what “Weisbrot” writes in our original hoax article:

“What saddens me most of all is that Europe and the EU generally do[es] not seem interested in saving the euro because if [Greece] fold[s], the Euro will be completely useless in international markets and throughout Europe, the Euro will collapse in an Argentine [type] crisis not only in Greece but [in] all countries [that are] EU members.”

The real Weisbrot has authored, way before the Greek bailout, a very interesting review of how IMF bailouts tend to work out, one which chimes perfectly with the current situation and which I recommend without hesitation. Read it and your minds will be cleansed from the stench of the Orange Blogs.


All of the above makes the fraud committed by the Orange Bloggers even more insidious because a superficial web check would confirm Weisbrot as a critic of the IMF and thus appear to confirm the authenticity of their “story.” Far from acting as researchers, or even bog-standard journos, they are pandering to the worst in the Greek people’s mentality, at a time when social peace is extremely fragile, and call specifically for murder and crippling strikes whilst hijacking the name of a solid academic (with whom I disagree on a lot but who is at least sane and rigorous in his thinking) and using him as their mouthpiece.


Freedom of speech is sacred; I would go further even than the law and justify freedom to slander and incite to violence as long as it is done in public and is open to refutation. These people must not be silenced. But those of us with a single brain cell that is not baying for blood must confront them. I will write to as many of them as I can this week, making it clear how dangerous and irresponsible their reporting is, how deeply it misrepresents our people to the rest of the world, and how deeply ashamed they ought to be of themselves as citizen journalists. I note that, in the endless iterations of this fraudulent story, others have stood up to misinformation way before I did – it is to one of them that I owe the link to the Epsilon interview. I urge you: please do as these good people have.

And now for the full-on, hernia-defying belly-chuckle, which I never saw coming: the Centre for Economic Policy Research, of which Weisbrot is co-director, acknowledges as its generous supporters none other than the Rockefeller Brothers Fund and the Rockefeller Foundation. If you fail to see the irony, you may want to read back to this post. How will the Orange Bloggers and Indymedia live with themselves now?


UPDATE: Mark Weisbrot's colleagues have come back with a very comprehensive refutation, which you can read here. It appears they are willing to pursue this matter in the appropriate manner, so stay tuned. Their official line is as follows:

Από το Κέντρο Οικονομικών και Πολιτικών Ερευνών:

Ο Mark Weisbrot δεν είπε ούτε έγραψε αυτά που του αποδίδουν σε αυτήν την υποτιθέμενη «συνέντευξη», για την οποία δεν αναφέρεται ούτε συντάκτης ούτε πηγή.

Αυτή η δήθεν συνέντευξη είναι ένα ατυχές συμβάν καθώς δημιουργεί περαιτέρω σύγχυση στην αντιπαράθεση σχετικά με ένα ιδιαίτερα σημαντικό θέμα: τα προτεινόμενα μέτρα λιτότητας και τις εναλλακτικές λύσεις όσον αφορά στην οικονομική ύφεση που αντιμετωπίζει η Ελλάδα.

Οποιοσδήποτε ενδιαφέρεται για αυτά που πραγματικά είπε και έγραψε ο Mark Weisbrot σχετικά με αυτό το θέμα θα πρέπει να διαβάσει εδώ: http://www.skai.gr/news/finance/article/156255/mark-weisbrot-yparhei-kai-allos-dromos

και εδώ: http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/eurozone-crisis-is-self-inflicted

The list of blogs that have decided to flag reposts of this hoax as debunked continues to grow. If you have done so in your blog, or are aware of a blog that has done so, please send me a link so I can add those blogs to the list:

• i-reporter have issued, as I said before, the best possible correction 
• e-parembasis [e-intervention] 
• Pyli Iasonos [Jason's Gate ]Despite the name of the editor this one has no relation to me at all.
• Alithina Psemmata [True Lies] 
• Arhaia Ithomi [Ancient Ithomi], which also cited much of our Dear Reader page on the matter. Many thanks! 
• Greek Tastes also cites much of this blog post. Many thanks!
• Aetos Halkidikis [Eagle of Chalkidike]
• Top Secret 
• Pentapostagma [Quintuple Distillation] put up a fight over this, initially responding that they couldn't know whether the story was true or not (which they forgot to mention in their post) but would need proof of the contrary. Upon receiving this they responded that they would put 'my view' across to readers for discussion if I sent a suggestion. I could probably have done that but there are no views to be discussed, as though equally valid. Only the truth of Weisbrot's refutation. 
• stopcartel were a particularly nasty case; upon first contact with Weisbrot's associates they questioned the identity of the latter and argued that regardless of its authenticity the core narrative of the forged document was close enough to his views. Both the Centre staff and myself and finally Weisbrot himself wrote to them to explain that this is bullshit and they should not attribute a dangerous, forged statement to anyone regardless of how representative of their views they think it is. Eventually the post was taken down. Weisbrot's associate notes that they should really be ashamed of themselves. I concur.
• the notorious tromaktiko originally made a goodwill gesture by posting one of Weisbrot's real interviews. I remained unsatisfied because any reader who has fallen for the original posts quoting the forged "interview" will only have his/her beliefs reinforced by this new post. I wrote to them again, on email, Facebook and Twitter, and expressed my confidence that they will find an acceptable solution to this. With none of their originally quoted sources still showing the story, they eventually backed down 'for the sake of my health' as they put it over email and have since pulled the story. [Actually a third copy is still up and I've asked for that to be corrected but for now I'm happy].
• But the medal of muppetry goes to sfrang2, the personal blog of one Stelios G. Frangopoulos who I am assured by a trustworthy reader (see below) is normally a proper gent. Frangopoulos acknowledged that the document is a hoax, but posited like stopcartel that it is irrelevant who wrote the document. It is the ideas that matter. I responded with a set of questions he could have put to his readers on the basis of this document if he had really meant to provoke a discussion. His epic response was: 
  "Mano, you have developed an obsession with this blog post, as though I am meant to be some kind of Union of Journalists ethics board. I gave you the answers I needed to, and had I known from the start that the document was a hoax I would not have posted it. But neither am I going to go researching next time [I post something like this] to confirm the validity of the text. I will post whatever I take a shine to. If the blog fails to gush forth the level of rigor that you are looking for, don't read it. I am not going to do any more."

My regards, Stelio. I will put that response down to a bad day at the Uni.


While this is only a very small start, and not a campaign I can afford to repeat, it is a victory of sorts. if enough people sign up to this way of doing things we could start making a difference. One man can do this work in less than a week. What can 100 people do?

FINAL UPDATE: I've just found out there is a word for that kind of unthinking copy+paste syndication: It's called Churnalism. A brilliant piece of terminology courtesy of filmmaker Chris Atkins, which actually manages to sound like LOLspeak as well.