Adventures with primary documents, sustainability-analysis edition

By Felix Salmon
February 21, 2012


This chart, from the European Commission’s debt sustainability analysis of Greece, has been doing the rounds today. I posted it last night, and it got picked up by Joe Weisenthal as his chart of the day; it’s a very striking visualization of the degree to which the Greece bailout plan lies somewhere between optimistic and delusional.

I’m happy to say that Reuters was the first organization to get its hands on this analysis. At 4:21 EST, we ran our exclusive story, by Jan Strupczewski in Brussels, with the headline that Greek debt would still be 160% of GDP in the European Commission’s downside scenario. Jan took the 2,800-word analysis, and its wealth of charts and tables, and boiled it down into a 965-word story which was avidly read by news consumers around the world.

Later on, the FT’s Peter Spiegel also got his hands on the Commission’s analysis. His story ran at 6:15 EST, and was even shorter, at 566 words.

Necessarily, both stories cut out material from the original report, and as it happens neither of them mentioned the sharp uptick in future GDP growth. The first place I saw that was at Alphaville, with an anonymous post timestamped 02:44 GMT (someone was up late), which was 9:44 EST. “The baseline scenario in the report forecasts 4.3 per cent decrease in GDP this year,” said Alphaville, “followed by flat growth in 2013 and 2.3 per cent growth in 2014.” Clearly they had the analysis themselves, since those figures weren’t being reported anywhere else at the time.

But it wasn’t until 10:47 EST that the report finally appeared online, at Zero Hedge, allowing me to write my post. The Zero Hedge post has now reached 20,000 pageviews — a very big story by ZH standards.

Once the analysis was freely available online, it started propagating elsewhere, too: Alphaville (which, remember, had had access to it six hours earlier) finally posted it at 08:49 GMT, or 3:49am EST.

The analysis is very well written, clearly by a native English speaker:

There is a fundamental tension between the program objectives of reducing debt and improving competitiveness, in that the internal devaluation needed to restore Greece competitiveness will inevitably lead to a higher debt to GDP ratio in the near term. In this context, a scenario of particular concern involves internal devaluation through deeper recession (due to continued delays with structural reforms and with fiscal policy and privatization implementation). This would result in a much higher debt trajectory, leaving debt as high as 160 percent of GDP in 2020. Given the risks, the Greek program may thus remain accident-prone, with questions about sustainability hanging over it.

As such, I think it’s fair to say that the analysis itself was intrinsically superior to any of the news reports written about it. Given the choice between reading the Reuters story, or the FT story, or the primary document, virtually all market participants would plump for the primary document.

And yet neither Reuters nor the FT posted the document when they got their hands on it, preferring instead to simply write it up in their own words. Zero Hedge got the document more than six hours after Reuters did, but still gets all the glory of being the first site to post it.

There are three lessons here. The first is that reporters still don’t like posting primary documents, for various possible reasons. They might be worried about being sued for copyright violation, or they might have promised their source they wouldn’t post the document. More generally, reporters tend not to want to give away to their competitors information which they worked very hard to obtain. And as such, they’re often perfectly happy to promise not to post such documents: because they didn’t really want to in the first place.

The second is that legacy news organizations like Reuters and the FT still don’t think digitally: the unit of news is always the story, rather than, say, a primary document in PDF form. So if you obtain a primary document, the first thing you do is turn it into a story, rather than simply letting that document be the story.

Finally, it’s silly to assume that reporters are going to be particularly expert at extracting all the germane information from a report when they write it up. Especially when you’ve had a very long day, it’s late at night, you’re under time pressure, and you are looking at the document from a particular, inside-baseball perspective. Sometimes, reporters can add value when they write up primary documents, by putting them in perspective and in plain English. Other times, they miss important things. Either way, posting the document itself along with the write-up can only make the news story richer and more valuable. Even if doing so also helps the competition.


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Interesting theme Felix. In this case, as far as the FT / Alphaville goes, it was simply a case that Peter Spiegel’s source in Brussels did not want the doc posting. While it is certainly the case that many journalists think in terms of providing a story rather than primary info, I think it is also very much driven by the sources themselves, who fear being unmasked by hidden identifiers on docs etc.

There’s an air of paranoia about information flows, especially when the news maybe price sensitive. We tell sources that we can do lots of things to strip docs of identifying marks etc, but nervousness remains. Blame lumpen regulation.

Posted by Murphp | Report as abusive

OK, you’re right, it’s great to post primary documents.

But really, no matter how well it’s written, how can it stand up to that graph? It’s the Bomb. First, look at that inflection point at 2012. As soon as the Troika gets its hands on the wheel, the Greek economy is scheduled for a 120 degree turn! If the Troika can do that, why stop at Greece? Let loose the new renaissance for all Europe!

Second, compare the area between the red line and the blue line on the graph. That area, translated in to cumulative debt, represents the difference between 120% and 160% GDP. Now mentally plot a plausible GDP trajectory in green. How does the area between your green line and the blue line compare to the area between the red line and the blue line? Mine is many times greater.

Posted by Greycap | Report as abusive

Great article. I agree with your opinion.

In the meanwhile, I think that it is really pathetic for Greece. It is unbelievable that the country is near the edge of bankrupt. It it were in the ancient time, a country without money must been defeated. Nowadays we just talking about her recover plan and wait her return the money she own. In this case, Greece wasn’t been defeated just because we would gain more of her returning the money than really defeat her.

I think the following article is relevant to the topic.

Posted by kaylabi | Report as abusive

News. What is it? When I read a newspaper or a blog, I ask myself “how many verifiable, actual FACTS are in this article?” Are the facts important? What are the important facts?

Now I just don’t look at FRED (St Louis Federal Reserve graphs) because I often need some interpretation and insight into what it means. Also, with all the facts in the world, I need somebody to filter out this avalanche of information and distill it down.

At some point, the news industry will figure out to always provide the raw data. There will be plenty of demand for distillation – just maybe not as much as there is now.

It used to be that you needed reporters to give you the synopsis of some Federal report or politicians speech. Now you can see it for yourself.
Remember Trent Lott – and his comment at Strom Thurman’s birthday party? An incident not particulary emphasized by the news media intially – but when the general public (or some members of it) saw it, what the media and the public thought noteworthy turned out to be considerably different.

We’re seeing it time and time again – politicians ability to taylor messages to certain groups is decreasing because of mobile phones and the ease of recording, as well as the ability for anyone to read the entire text of a speech on the internet. As well as the fact that the internet doesn’t forget…

Posted by fresnodan | Report as abusive