“All my stories, unconnected as they may be, are based on the fundamental lore or legend that this world was inhabited at one time by another race who, in practising black magic, lost their foothold and were expelled, yet live on outside ever ready to take possession of this earth again.”

Attributed to Lovecraft by Harold Farnese, who corresponded with Lovecraft briefly, later presented by August Derleth as a direct quote; but as discussed on this page http://www.hplovecraft.com/life/myths.aspx#blackmagic, Farnese's letters to Derleth suggested he tended to paraphrase things Lovecraft had written to him, going by memory rather than referring to letters he had on hand. More details in "The Origin of Lovecraft’s 'Black Magic' Quote" by David E. Schultz, *Crypt of Cthulhu*, issue 48.
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H.P. Lovecraft 203
American author 1890–1937

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“It didn't matter that the story had begun, because kathakali discovered long ago that the secrets of the Great Stories is that they have no secrets. The Great Stories are the ones that you have heard and want to hear again. The ones you can enter anywhere and inhabit comfortably. They don't deceive you with thrills and trick endings. They don't surprise you with the unforeseen. They are as familiar as the house you live in. Or the smell of your lover's skin. You know how they end, yet you listen as though you don't. In the way that although you know that one day you will die, you live as though you won't. In the Great Stories you know who lives, who dies, who finds love, who doesn't. And yet you want to know again.
That is their mystery and their magic.”

page 229.
The God of Small Things (1997)
Variant: It didn't matter that the story had begun, because kathakali discovered long ago that the secrets of the Great Stories is that they have no secrets. The Great Stories are the ones that you have heard and want to hear again. The ones you can enter anywhere and inhabit comfortably. They don't deceive you with thrills and trick endings. They don't surprise you with the unforeseen. They are as familiar as the house you live in. Or the smell of your lover's skin. You know how they end, yet you listen as though you don't. In the way that although you know that one day you will die, you live as though you won't. In the Great Stories you know who lives, who dies, who finds love, who doesn't. And yet you want to know again.
That is their mystery and their magic.

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“They are the possessed men who do much of the running of the world, and theirs is the most frightening story that can be imagined. But those who watch the great men do not know that they are shells inhabited by ghosts.”

R. A. Lafferty (1914–2002) American writer

Source: Archipelago (1979), Chapter Three, Pt. 5, A "ghost story" as narrated in its entirety by a character in the novel in a small ward gathering.
Context: "The perfect ghost story is the story of Possession," he said, "and that is hypnotism from beyond the grave. This is possible since hypnotism is by the will, and the will is immortal. A number of notable men have been possessed, and all of their lives seem to fit a pattern: the inconsequential early years, the hiatus when they stood where Faust stood, and the decision. And then the rise to power and influence and almost universal honor after they have made the deal. But it is not themselves, it is the devils within them that gain these things. They are the possessed men who do much of the running of the world, and theirs is the most frightening story that can be imagined. But those who watch the great men do not know that they are shells inhabited by ghosts."

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