How the Financial Times and Wall Street Journal trolled the Markets

How Peter Spiegel (FT) and Simon Nixon (WSJ) called “capitulation” and “referendum being cancelled” based on false assumptions, only to be deeply baffled by neither happening and instead blaming their confusion on Tsipras for “mixed messages”.

July 1, 2015

11:57 AM – Syriza’s “Capitulation” Meme

At around noon in Athens, Peter Spiegel the Financial Times’ Bureau chief breathlessly announced that Greek Prime Minister Alexis Tsipras had “conceded on almost all points” to the last offer on the table from the EU.  

This widely retweeted tweet and article sent markets higher and many pro-EU bloggers and correspondents (ie those from FT, Wall Street Journal and so on) triumphantly announcing that Tsipras had “capitulated” and his “bluff” had failed.  A typical tweet was from Simon Nixon, the Wall Street Journal’s Chief European Commentator.  

The Reality of Negotation vs Myth of Capitulation

Since the mainstream financial press (essentially FT, WSJ) had positioned the Syriza call for a referendum as breaking of all negotiations and essentially a bluff, any resumption of negotiations were seen as a capitulation and as arch-EU propagandist Hugh Dixon trumpeted, evidence that Tsipras was “crumbling”. 

The REALITY as I pointed out in a blog yesterday was that given time running out of negotiation on June 26th,  Syriza called a referendum to take place on July 5th, 2015  on a deal on the table as of June 26, 2015 while continuing to try and negotiate.  Indeed a surprisingly balanced Reuters article earlier today – How Greece Went Bust –  stated precisely that.   

The myth of the referendum being a permanent break-off in talks was propagated by the likes of EC President Jean-Claude Juncker (who in addition was caught straight up lying that the June 26th proposals did not cut pensions.)

So rather than accept reality, Tsipras’s counter proposal similar in the spirit of negotiations all last week, was described as “capitulation”. 

In ADDITION, the amendements that Tsiparis asked for while small in number were fundamental to both him and it turns out the EU which rejected these as indeed a chastened Spiegel started pointing out less than a hour later.   

1:58 PM – “Referendum May Be Cancelled” Meme

This meme was spawned by Simon Nixon of the Wall Street Journal who tweeted   

This added nicely to the Capitulation Meme as an corollary to Tsipras’s “bluff” being called and him crawling back to try and make a deal and saying the referendum was off.  This meme went viral for a few hours as well.

Reality: Referedum Was Always On

What Varoufakis raised earlier yesterday (as I mentioned yesterday) was the possibility of cancelling the referendum if a deal acceptable to Syriza was negotiated either before or after the June 30th expiry of the bailout package.    This comment was seen as a “capitulation” whereas it was obviously a simple restatement of Syriza’s position. 

Indeed I tweeted at 2:05 PM that cancelling the referendum would lose him credibility.  It would make no sense. 

5:27 PM Reality: Tsipras Speaks

Based on a simple read of what Tsipras and Varoufakis have CONSISTENTLY stated, I predicted at 1:39 PM the gist of what Tsipras’s would say  

And Tsipras four hours later said exactly that.  The referendum was on.  He was recommending Greece vote No to the proposals of 26 June. He will continue to negotiate in good faith. 

The Kicker: FT Baffled by “Mixed Signals”

In spite of the fact  that Peter Spiegel had clearly baffled himself along with the EU through erroneous assumption that Tsipras had announce a “major climb down”, Tsipras is now accused of sending mixed messages!  

  
Interestingly the EU clearly states that the changes Tsipras was asking for were “not minor” contradicting Spiegel’s initial tweet which made it seem that Tsipras had “capitulated” and asking for some minor changes to save face.  

Indeed as is clear they were NOT a “major climbdown” contradicting the article itself (see  highlights in top para versus second para). 

Conclusion

The assumption that Peter Spiegel and his powerful brethren in the financial media, who can move markets with a single tweet have are that Tsipras is doing all this as “brinkmanship” or some sort of elaborate ploy to stay in power.

They cannot bring themselves to admit the possibility that agree or not, Tsipras (and Varoufakis) mean what they say and while they are always willing to negotiate, there are red lines they will not cross – especially when economics and historical data is on their side – and they are willing to ask the people of Greece for a mandate.

That politicians can be principled is so laughable in the age of deep corruption both in the halls of power in the EU and within corporate media itself, that this possibility cannot exist in the minds of the powerful.  Obviously there is some dark Game Theory being played by Varoufakis at work.  There must be some hidden motives.

And looking for these motives trips up these commentators into knots of contradictions like the above leading to false predictions and bafflement when results turn out differently.

Epilogue 

With five days to go, I fully expect the disinformation campaign against Syriza to switch into high gear now that the EU have rejected any further negotiations with the Greek Government.

Expect every appeal by Syriza for help be described  as “desperation”, “capitulation”, “crumbling”.   Expect misquotes, out-of-context statements and vilification and the full panoply of information warfare unleashed on Syriza and their supporters. 

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