Lies, Damned Lies And Statistics

Tyler Durden's picture

From Mark Grant, author of Out of the Box

Lies, Damned Lies And Statistics

“There are lies, damned lies and statistics.”


                                       -Mark Twain

It has often been said by me, over the last ten years, that if one cannot ascertain the truth then one should not put money in that enterprise. It seems like a relatively simple perscription that I have formulated. There is nothing false or complex in this equation. Probably a number approaching one hundred percent of all of the world’s financial institutions would agree with the general precept and yet; that is not how some behave on an ongoing basis which I find quite astonishing. It is surely a matter of human psychology and of accepting what we are told rather than making a realistic appraisal of the facts. It continues to amaze me that various groups continuously try to reorganize the truth to their own benefit, falsify the truth,  on the assumption that you will believe what they tell you without investigation.

“And oftentimes excusing of a fault doth make the fault the worse by the excuse.”


                                     -William Shakespeare

What I find particularly difficult is what they are doing in Europe and continue to do because they are formulating systemic lies and they are doing it knowingly, purposefully; with the single motivation being to fool people. It can no longer be said that it is not systemic as the European Union does not object, has not objected, so that even Germany and the Netherlands and Finland have become accomplices to the schemes. Because the State says it is so does not make it so and this is a history lesson that we all should have learned long ago!

As I have counted the contingent liabilities, the dervivatives, the sovereign guaranteed bank debt, the sovereign guaranteed regional debt, the sovereign guaranteed corporate debt and included it in the debt to GDP ratios of various nations you have been given a MUCH more accurate appraisal than the untruths handed out by various nations and by the EU/ECB and the IMF. I have heard the argument that both methodologies are valid and I have stated, strongly, that this is NOT the case. These uncounted liabilities are just as real, just as valid and just as potentially costly to the European nations that do not count them. A debt is a debt and to not to count it for the singular purpose of trying to mislead people is a scam, a lie and the pig is no better looking because you paint it blue. Europe hands the official data to the Financial Times, the Wall Street Journal,the BBC, CNBC, Bloomberg, Fox News et al so that they can repeat it and repeat it again in the singular hope that it will be believed and that people/institutions will continue to finance the European nations and banks on the basis of the untruths of what they officially place in the Press.

“We are masters of the unsaid words, but slaves to those we let slip out.”


                                       -Winston Churchill


The new ploy here is to place the banks’ Real Estate holdings in some financial vehicle so that it is no longer on the balance sheets of the banks. There is only one purpose of this and this is to prevent the banks from going bankrupt. There is nothing more or less to this paradigm than that. The Spanish banks are carrying their Real Estate loans at vastly inflated valuations and real valuations would cause bankruptcy so remove the loans off the books, keep them as obligations of the bank in some off-balance sheet vehicle,counted by no one, and then the banks appear to be just fine and they can raise private capital based upon their improved financial condition which is not only gimmickery but out and out Fraud by any rational person’s assessment. There are no particularly nice words for what they are doing but “con,” “hustle,”  “flimflam” and “swindle” are all quite applicable. As Spain engages in this Sting there has not been one dissent, not one voice raised  in objection to this plan. Not even the IMF has uttered one word so that I am forced to state that the IMF and all of the European institutions are guilty of the crime and are every bit as accountable as Spain.

“He who profits by the crime; commits it.”




According to Reuters, Italy is going to propose to the European Union that they should exempt borrowing used to pay their commercial obligations from their calculation of public debt. Monti, the article states, is also going to propose exempting the counting of public debt used for investments. You may be sure that Italy’s $211 billion of derivatives will now be entitled an “investment.”  Now all of this will lower Italy’s debt to GDP ratio which is the real reason for these proposals and so even worse falsified numbers can be handed out to the Press in hopes that money will be invested in Italy based upon not just inaccurate but offically countenanced manufactured data. This way not only the debt to GDP ratio can be falsified but the growth numbers, the fiscal targets and a raft of other numbers that will no longer be real but just a systemic figment of Europe’s imagination.


“All this was inspired by the principle - which is quite true in itself - that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying. These people know only too well how to use falsehood for the basest purposes.”


                                         -Mein Kampf

Now I am quite aware that it is not polite in Europe to recall the travesty of Word War II. I am perfectly aware that no one on the Continent likes to discuss what happened some seventy years ago when Germany ran the greatest propoganda machine on Earth and almost took over all of Europe by its use of lies and deceptions along with its armies. Yet, being aware, I will not ignore the historical repeat of a European Union engaged in systemic distortions of the truth and I make no apologies for bringing it to your attention. When a nation or nations purposefully pervert the truth then we all should be afraid; very afraid.

“Men fear thought as they fear nothing else on earth – more than ruin – more even than death...Thought is subversive and revolutionary, destructive and terrible, thought is merciless to privilege, established institutions and comfortable habit. Thought looks into the pit of hell and is not afraid. Thought is great and swift and free, the light of the world, and the chief glory of man.”


                                         -Bertrand Russell

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The Alarmist's picture

Truth is always the first casualty.

BigJim's picture

 Truth is always the first casualty...

... in the war between Them and Us.

markmotive's picture

Them today being Iran...

Iran, the end of dollar hegemony and US economic collapse:

FL_Conservative's picture

Figures always lie and liars always figure.

Joe The Plumber's picture

Mark twain always gave benjamin disraeli credit for the quote. It is not mark twain original. Source document is " the family mark twain". In rhe editorial comments

Gully Foyle's picture

All statements are true in some sense, false in some sense, meaningless in some sense, true and false in some sense, true and meaningless in some sense, false and meaningless in some sense, and true and false and meaningless in some sense.

Principia Discordia
Yancey Ward's picture

Truth is always the first casualty.


Not if you redefine what truth is.

tom a taxpayer's picture

Jean Claude Trichet, former President of ECB, when asked to comment on Italy's proposal to hide the public debt salami said "Quoi? Je m'inquiète?" (What, me worry?). Trichet was questioned as he left a supermarche with two months supply of popcorn and a big smile on his face.


Elwood P Suggins's picture

They should go whole hog and exempt all borrowing from public debt statistics.  If you're trying to make it look good why not go all the way?

knukles's picture

What a deal.
Move to Italy and call my income charitable contributions.

francis_sawyer's picture

Sad to say, but the information superhighway has catapaulted the art of LYING to stratospheric levels never before imagined...


Once upon a time, you spent a good portion of your time with family members (hopefully they were not lying to you)... Nowadays, the lying comes to you from all directions, 24/7, and in to the palm of your hand... Worse ~ the TRUTH is actively censored...

EDIT: Let me provide an off topic example of something I just read this morning...


“I’m not going to miss the penny,” said Mike Gregoire, 37, who was touring the Mint with his son. “I find it more of a nuisance; I rarely ask for my pennies back” as change from shopkeepers, he said.

The penny, with two maple leaves on one side and a portrait of Queen Elizabeth II on the other, has lost 95 percent of its purchasing power since it was first produced by the mint."

So the LIE here is that they carefully construct the article to brandish the penny as being a nuisance (& too expensive to maintain)... The TRUTH is that it is too expensive to maintain because commodity prices have rendered fiat paper money virtually worthless (which is in the process of destroying the rest of the economy, their lives, & their freedoms along with it)... But the average dimwit doesn't understand that...

Randall Cabot's picture

I don't believe that the above-average dimwit understands it either.

francis_sawyer's picture

 "Consider that if the average person is pretty stupid... Then half the people in the world are even stupider than that"

~George Carlin

AssFire's picture

Hmm, Spain's plan is even less transparent that placing all the bogus mortgages in bankruput entitities (Fannie and Freedy), backed by the government but off the books for debt calculating purposes. Then the slowly ask for more and more funds while private banks magically reduce their debt load...

Since the government placed Fannie and Freddie in conservatorship in 2008, the Federal Housing Finance Agency, or FHFA, has prohibited the two firms from reducing principal on the loans they own or guarantee—even though private banks routinely use write-downs in their mortgage modifications. This past Tuesday’s announcement was the first time the agency publicly acknowledged that principal reductions could bolster the books of Fannie and Freddie compared to alternative modifications.

Talk about the BIG lie that all want to believe...this one has been doing it's job for 4 years now. The biggest lies these days most know are lies; its just what the people are hoping to believe.

CrashisOptimistic's picture

People, it continues to get more and more and more clear.

Money is an artificial construct.  Gold, dollars, euros, these are all items that have value only because people imagine they do.  It's all in the minds of people.  It's not BTUs.  It's not gravity.  It's artificial meaning.  

Nothing artificial whose definition can be changed by decree is going to be allowed to take the system down.  So stop expecting it to.

Only bullets entering brains change things.  They can make these problems go away by declaration.  It is only bullets that can't be stopped that way.

Gully Foyle's picture


"Sad to say, but the information superhighway has catapaulted the art of LYING to stratospheric levels never before imagined..."

By the same token the information superhighway has given everyone the ability to refute those lies, if they so choose.

It allows for rapid access to information previously hidden.

All it takes is a little desire and a little interest.

Obviously the GENPOP are dumbfucks who deserve everything they receive. They are disinterested and mundane.

It has always been that way and always will be.

Revolution and progress are ALWAYS driven by the few with vision and will.

The GENPOP are dragged along in the wake.

francis_sawyer's picture

It's like the Klaus Kinsky characrer (on the train) in Dr. Zhivago (being transported to Siberia)


"I am the only free man on this train... The rest of you are cattle"

stocktivity's picture

Yep....It's all Bullshit!"  ...They will keep printing, lying, fudging the figures, ect for much longer than we thought this ponzi scheme could continue....and the Bernanck will still come out with a couple more QE's and throw in a sneaky backhand to bail out Europe.

CrashisOptimistic's picture

Yes he will.

But if it's bullshit, it remains bullshit even after bullshit efforts are made to defuse the crisis du jour.

Look to oil scarcity.  It is the underlying cause of all the upheaval and is the one single thing they cannot stop.  

If you await the collapse, look to oil, because they can stop by decree any other cause.

WatchingIgnorance's picture

But, but . . . Krugman says everything is fine. Just print and spend. Print and spend.

I was so worried we would run out of toilet paper. Not anymore . . .

maxcody's picture

If not for QE3 we would have 1930 Depression.  We have until November to decide.

If Romney is elected we have a chance.  If not we will have 1930 depression.
You Choose.  The economy must recover before we ease QE3 just as Sinclair

makes the case in futures magazine.

Mr Lennon Hendrix's picture

If the people and press believe this Aurther Anderson type of accounting gimmick then we deserve to have banksters from Goldman run the world into the ground.

Sean7k's picture

I would suggest there is difference between what the people believe and how they act upon the information. The existing paradigm has very destructive effects upon personal wealth unless people have moved into asset based wealth. Even then, it is subject to taxation and confiscation.

The only alternative is revolution. As romantic as that concept is, it implies that you must be willing to destroy the dreams you have for yourself and family and plot a new course- without guarantee of success. This is a daunting task.

Even knowing we may have no other recourse. 

Most people just want to work, live and raise a family. Elites use this to their advantage. 

People I meet are more aware than I would have ever thought. However, they are paralyzed by the possible consequences, the long history of their country, the convenience lost.

There is a twilight zone of wealth transfer amidst a minimum of circuses and bread for the public. The Elites have owned the zone for millenia. This too will be modified to create a new paradigm that promises change and new beginning and it will be enough- unfortunately.

donsluck's picture

People will not revolt until their children are starving.

pvzh's picture

When their children are starving, people even less likely to revolt, they fight the daily struggle for survival. Ideas and politics becomes pointless. People revolt when "there are too few raisins in the muffins" (but they think it is "end of the world"), and after the revolt their children are actualy starving... people are weird bunch...

Gully Foyle's picture

Mr Lennon Hendrix

It isn't necessarily that they believe, it is more they don't care.

And the ones who seem to care really just defend dogma and preconceived ideology.

Very few wish to face the ugly reality of existence.

PeeramidIdeologies's picture

The consequences of ignoring reality can be unpleasant....

A Nanny Moose's picture

We can evade reality, but we cannot evade the consequences of evading reality. - Ayn Rand.

Hedgetard55's picture

As we get closer to the big reset, they will get more and more desperate. Won't change a thing, but after changing mark to market accounting rules, they may think this similar action will delay the end.


Call a dog a cat all you want, it is still a dog. Debt is debt, and it will get paid or defaulted.

dizzyfingers's picture



Oh, let's default and reset. Sooner better than later.

malek's picture

Well we're inching closer to the big reset.

We're the ones being hurt most right now, likely the others will be hurt much more later...

cherry picker's picture

Truth always comes out sooner or later.  People can't hide it, cover it up. or mold it to their liking.  That is something those who wish to distort the truth will never understand.

The Fonz...before shark jump's picture

What a scam can't wait for them to call the inevitable collapse as a "slight re-adjustment"

donsluck's picture

Collapse is not immediate, it is long and slow. We are in the midst of it right now.

carbonmutant's picture

This bit of populist rhetoric should help Monti in tomorrow's vote...

toady's picture

Makes sense to me. No way to pay it off, so 'make it go away'.

Inflation, hiding, out-right lying, it all needs to be resolved eventually.

koot's picture

1) One rarely gets in trouble for what they don't say, but can easily get in trouble for what they do say.

2) When the cops become criminals, crime becomes the law.

3) Dependent and non free people are more comfortable with the lie because the truth scares them.

4) Believing in a big lie makes small lies easier to do.

Hedgetard55's picture

I like #2, I* am going to steal it.


It is similar to "when laws become the enemy of men, then men become the enemy of law".

misterc's picture

Instant classic. Seems I've found a new hero besides Kyle Bass, Marc Faber, Hugh Hendry - Mark Grant.

ZH should come up with a seperate list or filter or something to collect the really great articles on the page.

orangegeek's picture

This is normal behavior in bear market....which started in 2007 (weekly Dow shows start:


This is merely a part of a denial process, similar to the trader that doesn't clear a position when the market turns against a trade.


This "denial disease" will likely go "viral" as the markets continue downward - blatant lying from organizations that value integrity will become the norm.  Media will blame it on reporting, but they will do the same.


It's going to be a rough time for next 20 years.



Judge Arrow's picture

Some of the numbers to know: number of drinks till you're sober, ballistics tables, how many rounds are left, how many people you can depend on, and when exactly yours is up...

onebir's picture

To be honest, debt to GDP ratios aren't completely comparable across countries as things stand, because of different estimates of non-formal economic activity (imputed rents, black economy etc) which the govt has no chance of taxing...

(Which isn't to say this Italian proposal isn't downright stupid...)

SwingForce's picture

Great post, Mark. These words make numbers irrelevent. Heed Churchill.

epwpixieq-1's picture

I beg to differ on this one.

No words make any numbers irrelevant. The (partial) knowledge about the TRUE physical relationships and dependences between the natural/social event and using of the numbers, through INCORRECT formulates, to represent these relationships in a GIVEN WAY, technically invalidates these numbers. If one has TRUE knowledge about the underlying processes, one does not need mathematical expressions.  One, only needs mathematical formulates to show to the people, who do not understand, the VIEW of the World ( physical or metaphysical), one WANTS to show. In the physical sciences this way of expressing the TRUE is more or less well defined/accepted, although there is a HUGE confusion (in understanding the approximated reality, if not the true one ) ones one looks at the fundamental building block and relations ( as between the charge and the field ). And now think what this revelation spells for the so called social sciences ( if there is such a thing ). 

The Words can not validate or invalidate numbers/statistics/formulates or whatever one wants to call them, only the understanding of the underlying relationships can.

But hey no one has to listen to me, given that I have a problem with thinking that what commonly is know as a "conductor" is an insulator and and an "insulator" is actually a true conductor. The REAL question is really, an insulator and a conductor on WHAT. Ones one decides to investigate this question, the misconceptions starts to crumble and the REAL questions and answers start to appear, at least on, of what is known, as the physical world of/based on dielectric and magnetic forces .

Hedgetard55's picture

"social sciences" = oxymoron.

earleflorida's picture

Churchill plagiarized everything he said and wrote, period! 


PeeramidIdeologies's picture

Possibly OT, possibly not, but when I see uncle Buffet out lying through his teeth for no apparent reason, I tend to believe there is one...