Editorial: “Everybody Is Lying About Everything.” The Diagnosis Is Complete.

Bruno Bertez
June 23, 2026

The central thesis of this analysis is that, in postmodernity, the imaginary has definitively supplanted reality — all the more easily because it generates immediate gratification and enrichment.

Our representations have become detached from the realities they are supposed to reflect. They have taken on a life of their own.Everything is false. Everything is deceptive — including the accounting of the system itself.

The total self-deception of the system “takes hold,” as one says a mayonnaise takes. It succeeds because it offers free lunches: nothing is truly paid for.

Milton Friedman explained that the world had become a vast third-party payer system in which the link between cause and effect had been severed.I fully agree. This rupture is one of the defining features of postmodernity.Everything now floats, unanchored. Causes and consequences have been disconnected. The natural bonds between effort and reward, action and outcome, have been deliberately broken. As a result, people have come to believe that everything simply falls from the sky — that benefits, wealth, security, and success arrive without any corresponding cost or responsibility.

Negative externalities and costs are expelled from the system, declared null and void. In reality, they are merely externalised and deferred.“Everybody is lying about everything.”

This statement by Jeff Gundlach, made during a recent conversation with Felix Zulauf on June 15, 2026, resonates as a precise clinical observation. Gundlach was referring to private equity, private credit, offshore reinsurance, and other opaque financial constructions.

This is not the casual cynicism of a trader. Gundlach, like Dalio, Hussman or Grantham, is a serious observer. He is identifying a defining symptom of our era: in postmodernity, the imaginary has permanently overtaken the real.

Numbers, valuations, and balance sheets no longer describe the world — they fabricate, simulate, and conceal it. They construct a self-reinforcing imaginary from which it is increasingly difficult to escape, given the overwhelming pressure to conform.From 2005–2006 to 2026: the systemic lie has been refined.

In 2005–2006, the deception centred on subprime mortgages, AAA-rated CDOs issued with complacency, and an entire chain that transformed toxic risk into apparently safe yields. It was financial alchemy: turning lead into gold and sewage into clear water.

The 2008 crisis shattered that fiction. Today, Gundlach detects the same taste in the air, but on a vastly larger scale.

• Private equity and private credit valuations rely on optimistic internal “mark-to-model” (Level 3) assumptions, rarely tested by the market.
• Promised returns, exit multiples, and growth projections can be adjusted at will to maintain attractive paper performance.
• Offshore reinsurance and complex cross-structures between private equity, private credit, and insurers add further layers of opacity.

As in 2006, all participants have a vested interest in keeping the music playing: fund managers (through fees and commissions), institutional investors (desperate for yield in a low- or negative-rate environment), and regulators (fearful of triggering a collapse).

The lie is no longer merely individual; it has become structural and performative.

Postmodernity is precisely this: the moment when the imaginary becomes the only reality. When the world of signs, words, figures, and shadows gradually replaces bodies and concrete realities.We are no longer in a real economy where accounts reflect facts.

We have entered the postmodern era described by Baudrillard — the era of simulacra, in which signs (numbers, narratives, valuations) have detached from any referent and created their own hyper-reality.

Accounting has become hedonistic and fictional. IFRS and GAAP standards grant such interpretive latitude (fair value, internal models, estimates) that net income is now a constructed narrative.Stock valuations no longer reflect probable future cash flows but a collective story: “AI will change everything,” “this time is different,” “a soft landing is guaranteed.” Beliefs are being capitalised.Macroeconomic statistics are smoothed, revised, and adjusted until they are barely recognisable.

Even fundamentals have become performative: a company that reports a strong number through accounting adjustments sees its share price rise, which in turn retroactively validates the original fiction.Everything has become image, storytelling, and consensus. Reality no longer needs to exist as long as the collective imaginary believes in it.

Visible signs of this disconnection include:

• Extreme concentration in a handful of stocks (the “Magnificent Whatever”) while the broader market shows underlying weakness. The very term “Magnificent” reveals how belief itself magnifies value.
• A surge in illiquid assets whose true value in a stress scenario is unknown, thereby sustaining artificial valuations.
• A dominant narrative (“soft landing,” “transformative AI”) that ignores growing divergences between surface appearances and underlying market depth.
• A generation of investors raised to believe that central banks can solve everything, that their leaders are magicians, and that reality is negotiable.

In this environment, truth has become almost subversive. Speaking it risks exclusion.To say that “everybody is lying about everything” is not paranoid exaggeration. It is a lucid description of the postmodern regime.

Gundlach is not necessarily predicting an immediate crash (market tops are processes, not events). He is simply registering the same unease he felt before 2008 in the face of a system where accounting and narrative fiction have replaced substance.

As long as the collective imaginary holds, the house of cards remains standing. But in finance, reality eventually reasserts itself — often brutally. Fear eventually strips away the layers of lies and illusions. One day, the lies stop paying.When the tide goes out, we will see who was swimming naked — and how many balance sheets were purely imaginary. The myth of infinite continuity will shatter.We are living at the apex of an era in which image and narrative have triumphed over fact. Gundlach has simply articulated it with the brutal clarity of a man who has witnessed several cycles die from their own deceptions.