2:00PM Water Cooler 1/22/15

By Lambert Strether of Corrente.


ECB president Mario Draghi commits European Central Bank to buy 60 billion euros per month of securities until September 2016 as part of an asset-purchase program worth about 1.1 trillion euros ($1.3 trillion) [Bloomberg]. Readers, correct me, but $1.3 trillion doesn’t sound like a lot.

Draghi announces a commitment that QW will “anyway” continue until inflation is back on a path consistent with the ECB’s target of an annual rate “below but close” to 2 per cent. [FT, “Live blog: The ECB unveils full-scale QE”]. Reactions!

European stocks rise [Bloomberg]. So EQ is already working! It’s going to make the rich richer, just like it did in the States! Garçon, more Adderall!

Leading German eurosceptics preparing to take the ECB to the country’s constitutional court over EQ [FT, “European Central Bank unleashes quantitative easing”].

Martin Wolf: “The [German establishment ‘s] emphasis on the wickedness of debt, regardless of what it costs, is pathological. No other adjective will do” [FT, “Bolder steps from Europe’s central bankers”].

Joe Weisenthal explains the loanable funds theory ***cough*** behind QE [Businessweek].

Merkel: QE doesn’t absolve the European government from making “structural reforms” [Reuters].

Disaffected Europeans vote this year in Greece (Syriza), Spain (Podemos), Britain (I’d say the Greens, though nobody mentions them), and Ireland (Sinn Fein) [Bloomberg].


SOTU a “pantomime” [Economist].

On turning the page: “Just about everyone I know is economically scared to death” [Truthout]. When you’ve lost William Rivers Pitt…

“Tuesday night, in his next-to-last State of the Union address, President Obama flashed the suckers a bag of tricks that has no chance of passing the Republican-controlled Congress, but will allow his apologists to claim that the genuine, more progressive Obama is revealing himself in his final two years in office” [Black Agenda Report].

Fact check [AP].

The U.S. may not have “risen from recession” quite as rousingly as President Barack Obama suggested in his State of the Union speech Tuesday night. Seven years after that severe downturn began, household income hasn’t recovered and healthy job growth is complicated by the poor quality, and pay, of many of those jobs.

Great headlines of our time: “Day After President’s Speech, Some Doubts Linger Over Nation’s Recovery” [New York Times]. Really? For true? Clue stick: You don’t get to “declare victory and get out” when you’re dealing with the economy.

“[B]y any traditional measure, the economy really is powering back from the steep recession he inherited. What’s puzzling is why it took so long for Obama to own” [Matt Bai, Yahoo News].

Audience for SOTU: 40% of Ds, 23% of Rs [Wall Street Journal]. No data given on independents, emergent parties.

Jebbie and The Mittster poised to meet privately [New York Times].


Bernie Sanders to hold six events over three days in and around Iowa City, Des Moines, Cedar Rapids and Ames, Iowa [Des Moines Register].

Not that I’m all that much of a Hillary fanboi, but it would be fun to watch her whip Joe Biden into line [Good Morning America].

Huckabee for state nullification of Federal laws, along with John C. Calhoun [The Atlantic]. Not to mention Orval Faubus after Brown v. Board of Education.

5:2 female to male ratio in Jebbie’s kitchen cabinet [Wall Street Journal]. Why, Kathleen Shanahan was Dick Cheny’s chief of staff….

Explainer on Clinton campaigns, the press, and leaks, then and now [Politico].

The Hill

The Republican-controlled Senate defeated a measure Wednesday stating that climate change is real and that human activity significantly contributes to it [McClatchy]. Wowsers. And the Democrats couldn’t defeat these guys. Makes you wonder.

Republican leadership delayed “late-term” abortion bill, because some GOP women and other lawmakers objected that the rape and incest exemptions only covered women who had already reported the crimes to authorities [AP]. “The rebellious Republicans argued that that requirement put unfair pressure on women who have already suffered.”

Warren: Supreme Court ready to eliminate the “disparate impact” standard, gutting fair housing and re-opening the door to subprime abuse [WaPo].


Golden Sacks: Don’t be too sure the Fed will raise rates [Bloomberg].

Former Bundesbank president Axel Weber, now chairman of Swiss bank UBS: QE not enough; “changes to labor market rules and pension schemes” needed as well [Reuters].


New York Assembly Speaker-for-Life Sheldon Silver arrested on corruption charges [New York Times]. But will he sing?

Stats Watch

Jobless claims, week of January 17, 2015: “inching higher and are not pointing to increasing strength for the January employment report” [Bloomberg].

Bloomberg Consumer Comfort Index, week of January 18, 2015: “Americans’ expectations for the economy improved in January to reach the highest level in four years” [Bloomberg]. Gas and jobs.

Class Warfare

10 charts that track net worth since 1989 [Wall Street Journal]. “Households led by people age 35-44 saw the biggest drop [in net worth], down 54%, with rising mortgage debt largely to blame.” Wait, wait. I thought we’d turned the page?

Strikes doubled in China last year, amid tough crackdown. Except even more this year [Reuters].

Startups building algorithmic lending models based on big data [New York Times].

The danger is that with so much data and so much complexity, an automated system is in control. The software could end up discriminating against certain racial or ethnic groups without being programmed to do so.

As I keep saying: Code is law.


healthcare.gov is quietly sending your personal data, including personally identifying data, to private companies that specialize in advertising and analyzing Internet data for performance and marketing [AP].

The AP replicated the results. In one 10-minute visit to HealthCare.gov recently, dozens of websites were accessed behind the scenes. They included Google’s data-analytics service, Twitter, Facebook and a host of online advertising providers.

Whenever I read about the healthcare.gov, I feel like I’ve been slimed. (GIve credit: The right has been in the forefront on medical privacy.)

News of the Wired

  • How the Patriots could have deflated their footballs without touching them [Boston Globe].
  • The Sun’s topless Page Three girls return [Reuters]. Rupert Murdoch was trolling us? Say it’s not so!
  • University of Rochester scientists etch a nanostrucuture onto metal that is so extremely hydrophobic that the water bounces on it as if it were repelled by a magic force field [Gizmodo]. Unlike chemical coatings, the etch doesn’t wear off.
  • A city with one million people could have $13 million worth of metals in sewage sludge [Smithsonian]. And that’s before we get to the pharmaceuticals!
  • Bring on the meth drones! [Union-Tribune]
  • 4chan’s administrator retires after eleven-and-a-half years [4chan]. At 26.5 years of age.
  • Turkish President Erdogan’s honor guard now clothed in colorful costumes (pictures) [Agence France Presse].
  • “Pair Charged Over Theft of 3-Star General’s Jewelry at 5-Star Hotel” [Cambodia Daily]. But, um…
  • “[E]volution could have produced zombies instead of conscious creatures – and it didn’t!” [Guardian]. And then comes the part on pan-psychism. Interesting long read on consciousness.

* * *

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:


And here is a humorous vegetable:


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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. Ben Johannson

      Of course it works! By the wealth effect. No, by increased bank loans. Or maybe by currency devaluation. Interest rates? Investor confidence!

      Anyone else get an ad hoc sense of all this?

  1. Anon

    Re: William Rivers Pitt

    Scathing review. I can’t really recall if he’s unloaded the big guns during his first term, but he’s been a bit more critical of Obama’s presidency lately (more so Obamacare than the man himself, but still). As for the SOTU, my Facebook feed was full of people cheering Obama on and hyping up his witty comeback at the end. I wonder if they realize that none of his stuff has a snowball’s chance in hell of passing. As just about every commenter here will say “What about that super-majority?” Speaking of SOTU, Vox wrote a pretty neat piece the day before that takes a satirical poke at the system (or perhaps it’s a meta poke): Honest State of the Union

    1. cwaltz

      That honest state of the union is pretty good although I’d argue that not everyone in Washington is there for the right reasons. I’m pretty sure folks like Di Fi, Joni Ernst and more than a few others are their for the hand outs and networking.

    2. Jackrabbit


      Vox’s ‘Honest State of the Union’ is dishonest. It plays up the divisiveness between the two main Parties. But, as has been pointed out here time and time again, the Parties are united in working on behalf of their contributors: the wealthy, the powerful, and corporate interests.

      Party politics is a game for the dumbf*cks that haven’t figured out that they are the one’s being gamed.

      H O P

      1. cwaltz

        I DO agree with their viewpoint that DC and it’s apparatus play politics like a football game.

        I think you missed the part where they pointed out that most of the people playing the game are friends and really the process is about showmanship. It really is about optics moreso than actually moving the country forward. Republicans won’t concede that smaller government doesn’t mean efficient government(or in their case even smaller government considering they want to police choices like reproduction) because then they’d lose. Democrats won’t admit that corruption is a problem in government because then they’d lose. Meanwhile we ALL lose because neither side will admit when the “other” has valid points.

    3. McDee

      “,,,a snowball’s chance in hell of passing.” Right. There will be Dems in Congress calling for all kinds of populist measures and the cheering section will blame the evil Repubs. In California the Dem legislature kept passing a single payer healthcare law, knowing full well the Repub governor (Arnold) would veto it. There’s a Dem governor now and the Dems still control the legislature. Single payer? Nope.

  2. craazyman

    They would Have Never Thought of This in a University Unless They Were Stoned

    It occurred to me at some point recently that the Roman Latifundia were precursors to modern corporate farms. Worse in degree but similar in kind. I suspect there’s probably some scholarly path here, relating to the abstraction of spirit into increments of money–where it can be pooled and collected with a certain gravitational force born not necessarily of productivity as much as a kind of gravity created by the physical imperative of aligning oneself with whatever cooperational structures exist in the immediate present. This would be the monetary equivalent of Dark Matter. It amused me to think of a line of thought connecting the
    Roman Latifundia to Too-Big-To-Fail Banks and Wal-Mart, running like a rope from the swamp of the most subterranean and unconscious pool of the life force. this is like an atomic reaction, where the non-financial imminence of person-to-person cooperation is transmuted into the abstraction of money, where it takes on certain characteristics by which it can be measured in units, pooled, collected, lost and stolen. Modeled in math, not as form of reality imitation but reality creation. There’s something inherent in this process, some elemental energetic structure, tied primarily to the structure of psyche, by which the abstraction of money achieves a gravitational quality and collects into ever larger and narrowly possessed pools. and then, when the shlt hits the fan, it disappears. The parallels with cosmological and physical world metaphors are too tempting to ignore. They are of course parallels and metaphors, sources of illumination but not sources of proof. That’s OK. At least they’re good for something. but anyway, the Roman Latifundia. It’s been a long time since then and now you see it right in front of you. It’s weird.

    1. ambrit

      The fact that Latin America still suffers the fallout from centuries of feudal social engineering based on the Latifundia tells us why the tumultuous history of our neighbours to the South is a prophecy about our future development, or devolution. I distinctly recall hearing the use of the word ‘latifundero’ to describe a large landowner or factory owner in conversations with people from ‘South of the Border’ and the Philippines. It’s not weird craazy. You’re just seeing through the forms. Like being in Platos’ Cave and realizing that you are the shadow.

      1. Lambert Strether Post author

        I’ve often wondered if the Reconstruction South was the world’s first fascist regime, or at least a pre-cursor of them, in the same way that the technology (railroad, telegraph), scope (continental), and tactics (trench warfare, no single decisive battle) pre-figured World War I. We’ve got the subject race, the lynchings, the night riders, at least; I can’t say if there was sovereign control of “the exception.”

        If this is true, and I’m speculating freely, it would connect back to the latifundia, with the KKK and Latin American death squads in the same functional slot….

        1. ambrit

          That would put the pre War negroes on par with the indios and poor whites equivalent to the mestizos. Which does feel right given the similarity of outcomes.
          There does not need to be a ‘sovereign control’ for the system, as a system, to work. As you say, “code is law,” so too, design is function. What first opened my eyes to this concept was Feynmans’ appendix to the Challenger Disaster Report. Sometimes it takes a genius to point out the obvious.

    2. sufferin' succotash

      How did those latifundia get started in the first place? Basically because the wealthy and powerful gamed the political system to appropriate public land for their private uses. This despite laws strictly limiting the amount of public land an individual could possess. Of course there was a missing ingredient and that was cheap labor, but fortunately Rome’s extensive overseas conquests produced a flood of enslaved people who could work those big estates for next to nothing. We generally don’t use such brutal methods of acquiring cheap labor nowadays, preferring kinder and gentler ways such as destroying local economies and employment through the magic of globalization.

      1. vegasmike

        I think there are some parallels between the American South after Reconstruction and the Latin American latifundia societies. The ruling class in both systems wanted to maintain a reliable source of cheap labor, had weird racial baggage and had a culture that placed a high value on personal honor.

        1. Jagger

          ———–culture that placed a high value on personal honor.——-

          A culture that does not place a high value on education, places a high value on physical intimidation. Personal honor is too good a name for the practice. Of course, there are other forms of intimidation as well not based on the physical.

    1. ambrit

      Really, that’s the little known Luchador “El Sandio” waiting for his pre fight medical examination.

    1. craazyman

      that’s a news story I actually read.

      what he says is true. Blount running for 166 yards? that’s not from football air pressure

      manufactured news to sell advertising on sports talk radio! This is CT in real life. Deep Football State — Deep Beer State, Deep Ford Truck State, Deep CableSubscription State. (NO offense Banger, I think there’s someting to deep state theory but in my mind it’s more an unconscious psychic sttructure that has a reality in n-dimensional pyche space and manifests in the imagination space as reptilians. YOu may think i’m ribbing you but I’m not. I’m quite sincere. so don’t get mad.).

      I watched the streaming internnet game. It was an amazing blowout. Even if the balls had been fully inflated it would have still been a blowout. The Pats smoked em like salmon. i mean really. It happens

      1. Jagger

        But the Pats didn’t know the game was going to be a blowout before the game. They were cheating for the edge if the game had been close. And I believe the Pats under Belichek now have a pattern of cheating. It should be interesting to see the penalties. A few years back, the hammer was put to the New Orleans Saints and look where they are now.

        1. bruno marr

          …every forward pass not dropped (soft ball) assists the running game. I didn’t watch the game (not a fan of pro football), but I imagine that the “blowout” nature of the game encouraged the running game in the second half (keeps the game clock running).

      2. ambrit

        Yeah, but what about the point spread? I’ve made a few bucks by “taking the points.” This could be serious business for the gambling crowd.

  3. Bill Frank

    ECB QE? Outright thievery. William Rivers Pitt issued a strong endorsement for Obama in 2012. Too little, too late.

    1. Lambert Strether Post author

      Pitt was the sort of Obama supporter who couldn’t get his head round the idea that there could be a critique of ObamaCare from the left. Still, he’s a member of the Class of 2015, I guess…

    1. ambrit

      I’ve watched the PMs with amazement myself. Silver does tend to be a bouncing ball. Copper now, that’s a metal with real connections to the actual state of the economy. It is still trading at the bottom of its’ 52 week average. The PM markets are notorious for being manipulated. JPMorgan is a major player in silver. Given their past performance in other financial arenas, dirty dealings in the PMs are almost expected.

  4. Oregoncharles

    “Disaffected Europeans vote this year in Greece (Syriza), Spain (Podemos), Britain (I’d say the Greens[!], though nobody mentions them), and Ireland (Sinn Fein) [Bloomberg].”
    Thanks for the plug, Lambert. We can hope it will be the Greens. More likely, BOTH them and UKIP. You have to wonder: when does the Eurozone get the message? Or does it have to go down altogether? Given the degree of blunder in the basic design, probably the latter.
    Interesting times.

    1. steviefinn

      The Green party is doing relatively well especially among the young. They are taking votes from the lighter shade of Neoliberal than the Tories Labour party, who are only I think, interested in winning marginal seats which UK elections tend to be decided by. The best the Greens can hope for is to become part of a coalition, as they would need a massive vote to overturn the first past the post election system which is handily geared to favour the bigger parties.
      There will be a BBC TV debate in which the Greens are not included, although they now have more members than Ukip, who also, unlike the Greens, get lots of media coverage/ Probably because those who control the media would be quite happy to see Farage & his bunch of not very lovable right wing eccentrics running the front shop for them while banning women from wearing trousers ( pants ) etc.
      Cameron has made some noises about including the Greens – he is either dishing out his usual bullshit or thinks that if the Greens did well, it would only take votes from Labour – as no self respecting Tory would ever vote for hippies.
      The TV debate will be 4 virtually the same parties trying to convince voters that the others are worse than them. I expect that my sole satisfaction from this farce will be that when the votes are counted, the Liberal Democraps will be totally annihilated for being the lying Tory lapdogs that they were – although strangely, they have been making progressive noises of late..

  5. Chauncey Gardiner

    Re: … $1.3 trillion doesn’t sound like a lot.”

    “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” —Archimedes

    Principle of leverage applies as well to the trillions of euros, yen, and dollars under QE created by central banks and placed in the hands of a few over the past six years.

  6. Chauncey Gardiner

    Sorry, I just saw your comment, Lambert. After having read your work and comments for some time now, I am sure you are not confused, Lambert. :-)

    I have found Ed Yardeni’s charts linked below to be helpful in studying both the policies of the individual central banks and considering them holistically. Your observation regarding the reported 60 billion euros per month amount of QE planned by the ECB through September 2016 is well taken, particularly when considered alongside the contraction of the ECB’s balance sheet since 2012. But I feel it is also important to consider the abbreviated time period contemplated for QE program implementation by the ECB. From what we have seen from the Fed and BoJ, there may well be subsequent QE programs assuming the ECB can sell the policy their Teutonic masters.

    Although the actions of all the major CBs are of interest, both separately and holistically, it is the Peoples Bank of China that I find particularly fascinating.


    Besides harboring deep reservations and questions regarding the efficacy of these QE programs, I am still trying to sort through all this myself, and particularly the question of whether these CBs have painted themselves into a policy corner.

  7. Sam Kanu

    The editorial crew at BlackAgendaReport.com have really got the bit between their teeth now – that was quite a verbal blast…

  8. Furzy Mouse

    Regarding consciousness, I believe that the scientific community, especially the neurologists, has been entrapped by a radically materialist outlook. Only the material is acknowledged to exist, as only the material may be examined and measured. This is a hard core position for sure, yet it is undermined daily by discoveries in physics, such as quantum entanglement , wavicles, and dark matter, which seem to defy the usual laws of materiality. Now, probably none of these are related to the instance of consciousness that we beings share, but they do open the door to possibilities that go beyond nailing down a bit of the brain as the instigator of awareness.

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