2:00PM Water Cooler 10/28/14

By Lambert Strether of Corrente

Quantitative easing

62 of 64 economists surveyed think Fed will end QE this week [Bloomberg].

No more free money? Junk bond dealers have a sad [Bloomberg].

“Every car loan advanced to a high-risk, subprime borrower can be bundled into bonds that are then sold on to yield-hungry investors” [FT, “Fears grow over QE’s toxic legacy”]. Wait, somehow that business model seems familiar…

This century’s Treasury View on QE, with charts [Business Insider].

“[T]he end of QE will help reveal what asset classes have been lifted by their own fundamental strength, and which have merely been floating on the sea of US dollar liquidity” [FT, “The end of US quantitative easing: two charts”].

Yellen: “But it speaks to the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover” [WaPo]. Mission accomplished!


Dogs that didn’t bark in the Republican House [Bloomberg].

Senate, South Dakota: R Rounds up 9 on D Weiland as independent Pressler sinks [Argus-Leader]. And Weiland accuses the DSCC of “sabotaging” his campaign? [Argus-Leader]. Funny, I thought only Steve Israel did that. Now it’s Michael Bennet?

Senate, Iowa: D Braley leads R Ernst within Marist poll margin of error [Bloomberg]. Cue “it all comes down to turnout.”

Newspaper endorsements make single-digit differences in elections [Vox]. So the press actually does have a lot of power.

A series of throat-clearings at Brookings [Brookings].


Hillary Clinton’s (current) seven talking points on the stump for the midterms foreshadow 2016 [CNN]:

1.) [Insert candidate’s name] is the “right leader at the right time with the right plan”

2.) “It’s as though the other side wants to cast an air of amnesia”

3.) “You can’t take anything for granted.”

4.) “Everyone deserves a second chance, a third chance…”

5.) “Women hold a majority of minimum wage jobs in our country.”

6.) “Grandmother glow”

7.) “Fear is the last resort of those who have run out of hope”

Jebbie in 2016: A giant among pigmies [Atlanticwire]. If I haven’t clawed out my eyeballs after the mid-terms, a Clinton-Bush matchup in 2016 should do the trick.

Oh gawd. He is. He’s going to. I just can’t even [Guardian].

Businesses are in business to create profit, not jobs [Christian Science Monitor]. “Job creators,” forsooth.

Stats Watch

Durable goods orders, September 2014: Although volatile, they “strongly disappoint,” down 0.2% when up 0.5% was expected. Non-defense capital goods down 1.7% [Bloomberg]. On volatility, aircraft orders are said to be the culprit [MarketWatch].

Redbook, week of October 25, 2014: Store sales strong on “adult costumes” (!). And a Friday Halloween means more parties and more sales [Bloomberg]. Some stores marked down Halloween items earlier than usual [NASDAQ].

Case-Shiller, August 2014: Total year-on-year adjusted rate of monthly change fell sharply. “Price erosion significant,” down in 12 of 20 cities surveyed, most severely in Chicago, Minneapolis, and Detroit [Bloomberg]. Deceleration continues [USA Today]. But “easy now.” Views vary between analysts: Absolute prices are still up; condo prices are down the most sharply, said to be good for first-time buyers, with regional exceptions; and maybe the increase in rental rate relative to homeownership has bottomed out [Housing Wire].

Consumer confidence, October 14: At a new “recovery” high of 94.5, with gain concentrated in expectations component, not present conditions [Bloomberg]. Strongest reading since 2007, on falling gas prices, better jobs market, increased income expectations [WSJ].

Hong Kong

Student demands for second round of talks with government [Facebook (JeffW)]. Into the weeds?

Post-mortem and explainer with media critique on abortive protester “stay or go” referendum [China Matters].

Life hacks from the occupation. The protesters ferment banana peels to create vinegar, which they use for cleaning [Quartz].

The UK gave Hong Kong the rule of law, but not democracy [McClatchy]. Worth reminding ourselves of the distinction.


Fewer traffic tickets written in St Louis since protests began [KMOV]. Remember that’s one way municipalities finance themselves in the St Louis area: Fees of all sorts, including from arrests. Hat tip, libertarians!

The Arch City Defenders lawsuit on Ferguson, Florrissant, and Bel-Ridge as municipal speed traps that target blacks [Newsweek].

Atmospheric piece on Ferguson Burger Bar [St Louis Magazine]. Despite the stressors, a lot of social capital in Ferguson and environs.

Good wrap-up of last week’s Ferguson-related events [All HipHop].

Big Brother Is Watching You Watch

USA Today Washington Bureau Chief Susan Page, speaking Saturday at a White House Correspondents’ Association (WHCA) seminar, called the Obama White House not only “more restrictive” but also “more dangerous” to the press than any other in history [WaPo]. The paper in front of every hotel room door in America….

“Patriot” act Section 213 “sneak and peek” secret warrants skyrocket, but 51 of 11,000+ (less than one-half of one percent) were used for terrorism [EFF].

Verizon secretly rewrites your HTTP requests to insert a permacookie onto your mobile device [Wired]. Well, as long as their repair guys don’t go to sleep on my couch…

America the Petrostate

BHP selling Fayetteville shale gas field acquired from Chesapeake Energy in controversial 2011 deal [Agence France Presse].

Philadelphia City Council decides not to sell assets, in this case the municipal gas works, in single buyer “auction,” ostensibly to prop up (looted?) pension funds [Inquirer]. I’m envisioning an underpants gnome-like playbook that goes like: 1) Loot pension funds; 2) sell assets to prop up pension funds; 3) loot assets. Ka-ching every step of the way for the FIRE boys, and commissions at every step. Too simple-minded?

News of the Wired

  • Bernanke’s email sock puppet in the bailouts crisis: “Edward Quince” [WSJ]. Hmmm. Most sock puppeteers are serial offenders. So I wonder if Bernanke had more that we don’t know about?
  • New York Times invests in Blendle, Dutch pay-per-article company [GigaOm]. Why not think outside the box, and charge by the paragraph?
  • Squillionaire Elon Musk calls for regulation to avoid “summoning the demon” of artificial intelligence [CNBC].
  • Reddit’s “Missed Connections” by region [Slate]. California: at the fitness center; New Jersey: on the train.
  • Scott expedition photographer George Murray Levick’s notebook found, conserved, and returned to Antarctica [CNN].
  • Mordant humor from The Peach State [Macon Telegraph]. Fun with acrostics!
  • Pope Francis: Evolution is real, God “not a magician” [Independent].
  • Wild swine population explodes. Can they be stopped? [Scientific American]. Make up your own jokes!

* * *

Readers, feel free to contact me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s plant (JN):


And I’m running just a bit short. Fall foliage would be nice!

Talk amongst yourselves!

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. anon

    “Wild swine population explodes. Can they be stopped ?…”
    DC and Wall Street seem to be their usual habitat so probably not.

  2. Oregoncharles

    “summoning the demon” – anyone who grew up reading science fiction knows about that one. Truth is, there are a lot of demons getting loose these days – genetic engineering is already following the track laid down by nuclear energy. And some scientists were re-engineering flu to give it the virulence of the 1918 pandemic – mainly, I think, to find out if they could. Yes, some scientists ARE psychopaths, or so morally clueless they might as well be.

    There’s a fundamental issue/lesson here: can we let the R&D boys have their heads, because “science”? We’re already living through the Sixth Great Extinction – and during one, the top of the food chain is a dangerous place to be. How many demons does it take to imitate the first photosynthesizing plants, and destroy the whole world ecosystem? (I’m not sure that one’s included in the usual 6).

    1. different clue

      Rats and roaches are edible. As long as rats and roaches can survive, some people can survive on the rats and roaches.

  3. trish

    re “Every car loan advanced to a high-risk, subprime borrower can be bundled into bonds that are then sold on to yield-hungry investors” [FT, …Wait, somehow that business model seems familiar…”

    Yeah, but if stuff happens we can always blame it on those poor ignorant high-risk subprime borrower dumbhead non-receivers-of-free-money who should have known better or read the fine print or worked harder or something. Again.

  4. NotTimothyGeithner

    I just read an article at Politico “Why Democrats are winning on the minimum wage?” Besides the obvious popular support for minimum wage hikes, it seems Democrats aren’t getting positive results for discussing the national debt and praising mindless bipartisanship but are receiving applause for a popular issue. This has been a great surprise. It’s a wonder the Democratic elite can dress themselves in the morning.

    They most certainly are corrupt and evil, but the GOP proves that man descended from a pet like beings and the Democrats have proven Einstein was right about the infinite nature of stupidity.

  5. trish

    re If I haven’t clawed out my eyeballs after the mid-terms, a Clinton-Bush matchup in 2016 should do the trick.

    A comfort to know that someday it could be a Clinton progeny-Bush progeny matchup. And then even farther on into someday, a Clinton grand-progeny Bush grand-progeny matchup! You won’t have any eye-ball left to claw, so no worries there!

    And perhaps by then the public will be lining the streets all aglow for glimpses of our very own little princes’/ princesses’ after their births. And the grandparents can toss bread from their modern-day (bullet-proof ) carriages.

      1. craazyboy

        [tinkle, tinkle] na’shhhhit. shallot, NC. faaack. cross b’tween onoim and frigg’in garlic. wads it gonna take to scrub dat image from yer brain? [hick]

      2. ambrit

        What? Carolina is such a nice name.
        I would have thought something like Alba Aqua to be more appropriate. After all, lots of offspring of the third generation are named after the source of the Families wealth.

    1. different clue

      You know what would be even more heartwarminger? If a Clinton and a Bush descendant were to marry eachother and raise a whole new genetic political dynasty.

      1. trish

        wow. thanks. that idea way more soothing than any fall-foliage anecdote could be.
        and we wouldn’t have anymore confusion about Democrat or Republican or what exactly the difference is anymore.

      2. James

        If a Clinton and a Bush descendant were to marry each other and raise a whole new genetic political dynasty.

        And produce the anti-Christ for an offspring? What’re ya trying to do? End the world? Wonder which side would produce the jackal to give birth to the little bugger? That one might be a toss-up I reckin’, but I think the Clintons might be a little more of the inseminating devilish bent, and the Bushes a little more jackalish. But these things are obviously not written in stone or anything.

        1. James

          At the risk of going over the line, I’d think they might be just a tad bit “gun shy” by now (admittedly sick pun intended). But beyond the off-color humor, it is of course tragic that we were all diverted down the whole Abraham, Martin, and John and Bobby detour in the first place, conspiracies all or not. Of course I firmly believe they were (just sayin’), but that’s a subject for another day and another audience. Power is as power does, and every now and then power lays down a marker or two just to let everyone involved know what’s real. And a bullet to the head in a public venue is most definitely a heavy dose of reality!

            1. James

              Exactly. And even though Michael Brown’s murder might not have been premeditated, it’s affirmation damn sure lays down a marker of an even more ominous sort. It says that we’ll turn you all against each other and kill you all – black or white, relatively rich or poor – and defy you to do anything about it.

              Possible? Look around.

    2. jrs

      This is what you get for “look forward not back” and not prosecuting W for war crimes. Now Jeb is not W, but the taint would have been there. Obama laundered (like money laundering) Bush till he claim out smelling clean. That was the purpose of Obama, well that and a lame healthcare plan.

      1. James

        Bush and Obama. The gifts that just keep on giving (and giving, and giving…). Just be glad Cheney didn’t have a brood as well.

          1. James

            Well yeah, but at least there’s only two, and that one’s an LGBT swimming upstream against an hysterical GOP current. Hard to imagine what she or he was thinking when they first hatched that scheme. The LGBT wing of the GOP? Like feeding goldfish to piranha. The cognitive dissonance alone would have red state heads exploding left and right, mutual hate for Obama and TheChosenOne notwithstanding.

              1. James

                Never say never! Only here in the land of the free and the home of the depraved. Wait long enough and pretty much everything comes around full circle again.

  6. abynormal

    it may all be cyclical but really…
    The jack-o’-lantern comes from an old Irish tale about a man named Stingy Jack. According to folklore, Stingy Jack was out getting sloshed with the Devil when Jack convinced his drinking partner to turn himself into a coin to pay for the drinks without spending money. Jack then put the Devil, shaped like a coin, into his pocket, which also contained a silver cross that kept the Devil from transforming back. Jack promised to free the Devil as long as the Devil wouldn’t bother him for a year, and if he died, the Devil could never claim his soul. Jack tricked the Devil again later, getting him to pick a piece of fruit out of a tree and then carving a cross into the bark when the Devil was in the branches. This trick bought Jack another 10 years of devil-free living.

    When Jack finally died, God decided he wasn’t fit for heaven, but the Devil had promised never to claim his soul for hell. So Jack was sent off to roam Earth with only a burning coal for light. He put the coal into a turnip as a lantern, and Stingy Jack became “Jack of the Lantern”
    or “Jack o’ Lantern.” Based on this myth, the Irish carved scary faces into turnips, beets and potatoes to scare away Stingy Jack or any other spirits of the night.

    jerk O’ lantern

  7. not_me

    Businesses are in business to create profit, not jobs [Christian Science Monitor].

    Glad we settled that. Now why aren’t large businesses roughly equally owned by the population? So that the profits are roughly equally shared? Are you ready? Answer: Because of explicit and implicit government privileges for PRIVATE credit creation, is why, since around 1694.

    But let’s not have just profit sharing; let’s give the victims of systematic government-enabled theft some crummy make-work to keep them too busy to make trouble and/or train them to be docile wage and debt slaves for their oppressors, the banks and the so-called creditworthy. /sarc

      1. not_me

        The JG crowd whether they know it or not. If there is meaningful work to do that is not being done, it’s because of the lack of means to purchase it in the right hands. Fix that and voilà the work shall be done with or without new jobs. Focusing on jobs, rather than on needed work, and for that matter justice, is a serious error.

          1. hunkerdown

            To be fair, it’s not necessarily a trick. It is a common habit in politics (and American life) to explain away ostensibly unintended consequences with the null hypothesis, by way of the megalomaniac position that the consequences of one’s actions are no more or less than one fancies them to be.

            1. Lambert Strether Post author

              Hmm. I note that “ostensibly” smuggled in, there. Is your position that no policy decisions should be made because unintended consequences will invariably occur?

          2. not_me

            You and they can’t escape this: If people have the necessary income and other resources, then they can do work that is meaningful to them, BY DEFINITION. For example, you like to garden so you need land and your own time to do so.

            Interjecting a job between people and work is unnecessary and is suspect for that reason. If you say people will be paid to do the work they wish to do, then just direct deposit their “wages” and be done with it and they will. It’s truly amazing what people will do on their own land, with their own time and in their own way, eg. garden plots in the USSR vs collective farms.

            Now if people need to belong to a group, be organized, be ordered around, whatever, then they can volunteer for some organization, including governments, that will fulfil those need.

            To some it up, a JG is a big nothing burger at best.

            1. Ben Johannson

              That right there is the fatal flaw in your argument: you think human psychology is plug-and-play. Like doctrinnaire marxists you don’t get that attitudes toward work must undergo transitional change; in your impatience you assume an idealized world can be enforced from the top down to create the promethean New Man.

              You don’t get humans.

              1. not_me

                In other words, how do you get from a JG to land and other asset reform? How do you get to just restitution by establishing the precedent that people must work for it? How do you get to justice by implicitly blaming the victims of injustice?

    1. Massinissa

      Am I the only one that wishes McPain had won the election so that people would STFU about ‘evil socialism’ ruining the country?

      In fact, I will go so far as to wish that Jeb Bush wins 2016

      1. cwaltz

        Some of us made this argument in 2008. *sigh*

        We were all told to sit down and shut up and let the “creative class” figure out the pesky details. We weren’t as smart as them.

        Goodness gracious I sure do wish I was as smart and edumacated as they were. Who could have ever imagined?

      2. neo-realist

        I think Jeb is running provided the table is set for him to steal the election in a close race like his brother did.

  8. Jeff W

    “Into the weeds”—seems like it. The student demands are a bit of a mess.

    Hong Kong Federation of Students [HKFS] Secretary-General Alex Chow says “The government always says that the students don’t represent the people in the plaza and Hong Kong citizens…” If the state of public opinion is in contention—the government says the students don’t represent public opinion and the students (along with others) say the government’s July consultation report misrepresented public opinion—then a citywide referendum—what Peter Lee calls Occupy Central founder Benny Tai’s “nuclear option”—would certainly be one way to find out.

    One other point: Chief Secretary Carrie Lam keeps on insisting that the August 31 decision of the National People’s Congress Standing Committee cannot be revised, as if it’s unalterably etched in stone. I haven’t seen that questioned anywhere, except here:

    “There is no legal issue here,” says [Surya] Deva [Associate Professor at the School of Law of City University of Hong Kong]. “The chief executive is legally allowed to ask the NPC to reconsider, and the NPC is constitutionally allowed to change, or even void, its decision.”

    If I were the protesters, I would be placing the government on the defensive and nailing Lam’s assertion on every occasion.

  9. grizziz

    Philadelphia City Council:
    Likely the pensions were never funded in the first place by the ability of politicians to abuse poorly conceived Public Accounting Standards. Property taxes were never high enough to cover costs. But in the area of grift politicians can look forward to PPP’s (private public partnerships) to line their pockets.
    Specifically, you have to love the fact that utility’s only purchaser’s credit was so poor that it had to pay a bank $11.9mm to keep a credit line open.
    “UIL has spent $11.9 million on acquisition expenses through the first six months of this year, mostly to pay bankers for a credit line to cover the purchase costs.”
    Read more at http://www.philly.com/philly/business/20141028__1_9B_sale_of_Philadelphia_Gas_Works_is_dead.html#CjRUe2berOCEpcvj.99

  10. g3

    My attempt at a joke reg the Wild swine population explosion:
    A Silicon Valley startup comes up with a plan to control their population. Media cheers on hailing the startup as a “job creator”. Spouting Thomas [Freidman] leads the parade once again, copy/pastes a column from his archives about enterpreneurship. And exhorts government to dole subsidies for the same.

    1. ambrit

      And then all the H1b visas from India go into revolt over “unclean” working conditions. Silicon Valley becomes a real ‘Black Hole.’ Glubb Pasha rides to the rescue. But, who does he rescue from whom? Interesting conundrum that.

      1. ambrit

        I thought of that as The Economist having fun with Times’ Person of the Year cover. Time used a mirror surface to suggest that everyone was the Person of the Year, while The Economist, in the spirit of Modern Times, redacted the cover in its’ entirety.

  11. Eureka Springs

    I like a challenge as much as the next person but that link to send photo submissions is beyond frustrating, it’s seemingly impossible. I would love to contribute and I have sent photos and links to your regular L_S corrente addy several times over the last weeks to no avail? Getting great pics this Fall.

Comments are closed.