Adventures with primary documents, sustainability-analysis edition

By Felix Salmon
February 21, 2012

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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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