The Numbers Racket

"I am pleased to tell you that I will not be telling you anything..."

"I am pleased to tell you that I will not be telling you anything..."

When I got up this morning I was full of journalistic enthusiasm, anticipating writing up possibly the biggest Baltic story of the year and very probably giving a new angle to what had previously been the biggest story of the year. But instead I clocked out at the end of the day with one not-entirely satisfactory story based on the fact that nothing substantial had actually happened.

The news hors d’oeuvre was supposed to be a press conference given by the new management of Parex Banka about how their efforts to save the bank are going.

Then we were going to have the main course – an announcement at the cabinet office about the IMF bailout Latvia hopes to receive.

Yet both ended up as undercooked damp squibs, and pretty much for the same reason: a refusal to give any real numbers to back up the assurances that everything is going just swimmingly.

The Parex people wouldn’t say how much money its account holders are withdrawing, nor whether it wants to take over the shares still owned by independent investors. This was paticularly galling as East Capital, which owns more than 4% of Parex issued a damning press release yesterday which you can read here.

"Think of a number between 1 and 500 million..."

"Think of a number between 1 and 500 million..."

On the other hand, Parex did give the journalists who showed up a nice pad and pen as a christmas present, which I hereby declare for tax purposes.

After Parex, the press pack hot-footed it over to the cabinet office for The Big One. Except The Big One turned out to be little more than a rehashed presentation of the government’s billion-lat austerity plan which the parliament passed with much back-slapping last week.

There was nothing about how much was actually being asked for. Insetad it was “It will be worked out in the days to come,” and “We can’t give you any figures at this point.”

It was all very disappointing and more than a little patronising to the populace. After all, it’s ordinary Latvians who will end up paying for Parex and repaying the IMF loan.

Confidentiality is all well and good, but there’s a nasty smell of fait accompli in the air. It would be at least polite to say how deep in the doo-doo Latvia is: up to our ankles, knees or necks. That way people will know whether to knit socks, pants or a hat.

What the authorities (and they clearly still regard themselves as such despite their pivotal role in getting into this mess in the first place) have failed to realise is that speculation will always fill a numerical vacuum.

If you don’t give people figures, they will guess or make up their own, and you shouldn’t complain or threaten to lock them up if they do so for a lack of proper information.

You can’t have an indefinite number of cakes and eat them.


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