Not to be defeated by the lack of market fireworks attendant upon the Moody's downgrade of Spain's sovereign debt, FT Alphaville yesterday took matters into its own hands and published the salient portions of a 'deeply anonymous' report received by themselves and various other information media. By salient we mean that the writer of the piece claims - and claims to prove - that the collapse in Spanish GDP during the crisis amounted to 17.3 percent, and not the published 3.1 points.Over the course of the day, the incredibly lively and erudite (perhaps not including those posted by this writer as 'capra.iberica') comments section not only laid bare the inadequacies of the analysis, but also made a credible stab at identifying the source of the nonsense. The general opinion was that it was shat out from the laptop of one Juan Carlos Barba, earstwhile contributor to that noise manufacturer with a deserved reputation for never letting facts interfere with a critique of the PSOE - Libertad Digital* (American readers might consider Beck or Limbaugh as analagous). We think, on the basis of the very unusual typeface used in the graphs, this theory might have some merit.
Precipitated, we imagine, by the publication by the above mentioned Spanish rag of an article - co-penned coincidentally by the same Mr. Barba - claiming that the source was in fact Alphaville (with all that might imply concerning its credibility), the English publication erased the original text and replaced it with this. The important quote is:
'...we'd even started to question the (political) motives of the anonymous source.'
Aside from the obvious humour of Alphaville's having taken the bait hook, line and sinker, the really interesting observation comes via the comments (which remain intact in the rewritten piece and are worth a read). That a wide variety of people felt it relevant to unmask the falsehoods in the argument tells us that the curious notion that one ought to proceed from the evidence to the conclusion - and not vice-versa - may be gaining some currency. It's been a long three years.
The original FT piece has been preserved here and the entire document can be had here
*A good idea of what Libertad Digital is all about is provided by the closing paragraph of the same piece 'inspired' by Alphaville...
...Spain entered technical bankruptcy last May 7th...
To date, the publication has not removed the link that now disinherits them.
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8 Comments:
The PP must be really hoping that the crisis will continue until the election.
I'm generally much less sanguine about Spain than you are, but it took me 4 seconds of reading that alphaville post to suss out there there was something fishy going on.
(I was the commenter who pointed out the tax issues in comparing cost of carry in US vs Spain)
Charles,
I would object to the Beck/Limbaugh analogy for Libertad Digital. I'd argue the editorial line is mainly about defeding the unity of Spain as a nation and free markets (both stances might be considered right-wing if you want - I care profoundly about the latter and not particularly about the former).
On social issues and morality, a defining area for the American right, I don't think there is a clear editorial line. There is a strong representation of social conservatives a la Beck/Limbaugh but also, arguably in equal measure, of libertarians. The recent controversy between Jimenez Losantos (libertarian, except on the Spanish question) and Pio Moa (ultra-conservative) on homosexuality is the clearest exponent of this division.
Anyway, apart from that it is clear you enjoyed the day yesterday. The report made Edward Hugh seem as monotonist as you.
Anon -
Not to say that theoretically you can't be less sanguine than a person who isn't at all, but I'm not. Really! The country Spain is the most similar to right know is the US - going nowhere. But nowhere isn't a sinonym for precipitously down.
Anyway, it looks like I can return to regular service here.
Why don't you call yourself 'commentor who' or something.
Bern,
My intent certainly wasn't to offend you - although I can think of a whole slew of hysterical idiots I know that feed their irrational frenzy with a daily dose of don Federico whom I wouldn't mind... but they already know my opinion (somehow excusing me because 'I'm not from here', or something).
You're correct about the differences in content between Beck/Limbaugh and LD, but the incident here of claiming that Spain's GDP fell by 17.3% into 2009 is not distinguishable materially from claims that Obama is a muslim, not an American, a communist and on and on that are the stuff of those two.
In this case, an LD writer anonymously submitted a pile of bullshit to a number of media outlets, then proceeded to write about its subsequent publication at LD as if he were at arm's length from the affair. This is unacceptable. The piece was a fabrication. The situation also.
This is also the level of nonsense, intended only to discredit the current government at any cost, that appears in that publication on a daily basis as they do their best to ensure that Spain and its quaint little paradisiacal regions never, ever stop looking inward on themselves (logic by e-mail, if you care to).
What libertarians are doing at a bastion of centralism defies me, btw.
Nice to hear from you.
B,
Someone sent me an e-mail saying that Barba had actually admitted to being the author of the piece on esRadio this morning. Suicide if you want to convince anyone but the already converted.
CB,
Not at all offended! Even though I do like Federico and have been asked to contribute a weekly piece to the economy section of LD (!).
I have not gone through all the comments in FT Alphaville in detail, but my quick impression is that the divergence is almost fully explained by the fact these people are probably missing out the impact of 60 billion euros of additional expenditure by central government and the 40-50 billion from the narrowing current account deficit. Does that sound right to you?
Also, in the week that everybody seemed to be so keen on using electricity to measure economic activity (in order to estimate the success of la huelga) the easiest rebuttal to this piece is provided precisely by looking at electricity demand, which was only 2.7% lower in the last 12 months compared to the 12 months to September 2008. And this data is provided by Red Eléctrica, a private company, not the government.
B,
The basic argument was keyed on the UR. His point was that a nominal 9 (or whatever) point increase in this didn't jive with 'only' a 3% drop in GDP. He should have used percent increase over full employment 2007. Doing this creates a situation indistinguishable from that in that other debt strangled country - the US. This not to mention the smoke and mirrors that the underground economy surrounds labour statistics with.
He then proceeded to point out discrepancies between gross value added and service sector output - concluding, I think, that the latter was jigged. Unfortunately, the first does not include non-market services - government, which makes the two lose their correlation in recessions anyway. So you're right.
Even if he could extrapolate (which he can't), your figures already account for 100 of the 140 billion difference.
My question for Spanish economic liberals would be: What kind of legislation or liberalization would be sufficient to counteract the near-genetic imperative to form cartels in this country? The Randian model does not apply here.
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