2:00PM Water Cooler 1/23/15

By Lambert Strether of Corrente.


Stocks soar, bonds tumble [WSJ, “European Markets Rally Day After ECB Move”].

Euro tanks [FT, “ECB action sends euro on sharpest fall for 3 years”].

“The critical aim must be to weaken the euro” [FT, “Draghi’s pledge gives credible hope”].

ECB’s QE program builds in the condition that Greece will only benefit from asset purchases if the new government that the nation votes for on Jan. 25 continues the agreed path of reform [Bloomberg].

Syriza candidate Yanis Varoufakis: “Doing something is not always better than doing nothing, especially when there are alternatives better than either” [Economist].


HBO documentary about Bill Clinton stalled after director Martin Scorsese refused to give The Big Dog more control [Talking Points Memo].

Obama’s tax proposal fills Warren’s sails and challenges Hillary [Gaius Publius, Down with Tyranny].

Obama’s SOTU: What do Democrats mean by “middle class,” anyhow? [Corrente].

Washington Post-ABC poll: Clinton beats Romney by 17 points. Romney also performs worse than 2012 in every single demographic [WaPo].

90 of the Mittster’s top 2012 fundraisers on the fence, hesitating between him and Jebbie [HuffPo].

Lisa Wagner, top Romney 2012 Illinois fundraiser, throws in with Jebbie [Chicago Business].

“Invisible primary” algorithm selects Michael Dukakis as the closest historical analogue to The Mittster [New York Times]. Ouch!

Jebbie on 60 event fundraising blitz [Wall Street Journal]. Everybody says there has to be a reason for Romney to run. But I don’t see a reason for Bush to run, either. What’s the platform? “I’m not W?” “No more Iraq invasions”? “He’s the dry drunk, not me”?

The Mittster shuns the Koch Brothers beauty contest because he’s not going to win anyhow [Mother Jones].

Cordial, “gentlemanly” Utah meeting between Bush and Romney was a non-story [Boston Globe].

Greens and Libertarians join forces to challenge Commission on Presidential Debates limit of participants to the two legacy parties [Green Party Watch].

How Republicans can appeal to the “aspirational class,” “the people for whom the possibility of achieving the American dream is fading” [WaPo].


Andrei Kostin, head of leading Kremlin-owned bank VTB: “If there is no banking relationship, it means the countries are on the verge of war, or definitely in the cold war” [Buzzfeed]. Mission accomplished!

Three camps at loggerheads over Europe’s depression: The German establishment, which wants “structural reforms”; the IMF, which wants structural reforms, but also monetary and fiscal policies; and the camp “promoted” by Larry Summers, which wants structural reforms but also wants aggregate demand addressed [New York Times].

“Prince Andrew breaks cover in Davos to publicly deny ‘sex slave’ allegations” [Independent]. The sort of headline your PR person never likes to see….


So will Sheldon Silver sing like a canary? [New York Times].

The events this week have shaken that sense of security and raised the possibility that Mr. Silver, the quintessential capital insider, could reveal his own colleagues’ misdeeds to federal prosecutors in exchange for leniency.

“My conclusion is this: what we’re looking at is not a run-of-the-mill case of graft or envelopes stuffed with money, but a far more serious matter: State Capture” [Albany Project]. Important!

Of particular interest is the 421-a program, “under which substantial real estate tax abatements are provided for certain new residential real estate developments.” The intent of the legislation is to increase affordable housing, especially in the Five Boroughs; affordable housing such as, say, One57, nicknamed the billionaire’s tower currently under construction in Midtown Manhattan. A condo there recently went into contract for a cool $47 million, but hey, no reason not to give the fine folks who bought it a 94% break on their real estate taxes.

One57 is Extell Development, but the “poor door” is at another Extell project. Apparently Extell gets its tax break on One57 by paying into some sort of very special but vaguely defined fund….

Assembly Democrats back Silver saying as Speaker [New York State Politics]. Shaking my head.

The most dangerous man in American politics [Buzzfeed]. Preet Bharara, one-time aide to Chuck Schumer.

Wells Fargo and Jippy Mo get cost-of-doing-business fine for fraud [CNN]. Film at 11:

Federal and state authorities have ordered Wells Fargo and JPMorgan Chase to pay a combined $35.7 million for taking part in a mortgage kickback scheme. The Consumer Financial Protection Bureau and the Maryland Attorney General said Thursday that loan officers at both banks took cash payments from a now-defunct title company in exchange for business referrals.

Has a familiar ring, somehow…

Black Injustice Tipping Point

Ferguson fueled by razing of Kinlocha, historic black town [Al Jazeera English].

Cop who choked Eric Garner to death was the subject of at least three civil rights lawsuits [Mother Jones].

Newly released dashcam recording shows New Jersey police officer fatally shooting a black man whose hands were raised in the air [Mother Jones]. Second verse, same as the first…

America the Petrostate

Three million gallons of fracking brine leak into the North Dakota headwaters of the Missouri River [Reuters]. Thanks, Summit Midstream Partners LP!

Stats Watch

Existing home sales, December 2014: Up 2.4 percent, as expected, led by single family home [Bloomberg].

Leading indicators, December 2014: Rises a solid 0.5% but a “shallow gain” reflecting ZIRP, which will probably shift higher, and a credit index that keeps signalling strength in lending activity unconfirmed by other factors [Bloomberg]. “This report is ambitious by its definition and, in December’s case at least, unconvincing.” “Ambitious”?!

PMI Manufacturing index flash, January 2015: Soft [Bloomberg].


King v. Burwell: “The people who could lose their health insurance as a result of a Supreme Court decision this year are predominantly white, Southern, employed and middle-aged” [New York Times]. IOW, a huge chunk of the Republican base [snicker].

John Kasich on Medicaid expansion in Ohio: “There’s no money in Washington, it’s my money. I brought my money back to Ohio” [WaPo]. Smart framing!


The Grey Lady’s toe-curlingly sycophantic obituary [New York Times]. “Abdullah spoke as plainly as the Bedouin tribesmen with whom he had been sent to live in his youth.”

King Abdullah was a nasty piece of work [Guardian].

Brit flags at half-mast for Abdullah [International Business Times]. Arms deal not finalized, then?

Fighters seize Libyan central bank and its $100 billion in foreign reserves [New York Times]. Qadaffi looking pretty good here, from a pure stabilty perspective, just like Saddam. If you found it plausible, if a bit post-modern, that Obama’s policy in the Mediterranean basis and the Black Sea was to sow as much chaos, blood, and pain as possible, and then profit from the churn, incidents like this one would dovetail neatly with your worldview.

Big Brother Is Watching You Watch

Barrett Brown sentenced to five years [The Intercept].

News of the Wired

  • The New England Patriots prevention of fumbles is nearly impossible [Sharp Analysis]. Smarter people than I am say this data-driven approach is “devastating.”
  • The most crystal clear image of deep space ever taken [Quartz]. Really amazing!
  • Geologists discover why Tibet’s mountains are “stretching” in an East-West direction [Phys.org].
  • Guanxi: “I hope one day I won’t need to pay bribes for anything though I still have to pay to maintain relationships” [Businessweek]. Alrighty then.
  • According to the General Social Survey, the number of Americans who say they have “no religion” has more than doubled since 1990 [Alternet]. Blowback from the Christianist right, if you ask me, and very much deserved.
  • “Postal Service Unveils New Line Of Stamps Honoring Americans Who Still Use Postal Service” [The Onion].
  • “The Subtle Art of Not Giving a F*ck” [Mark Manson]. Seems to be going viral…
  • “How to shoot a video that doesn’t completely s*ck, with no $” [Punk Patriot]. Do it!

* * *

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:


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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. grayslady

    A labor of love on SOTU and the “middle class”, Lambert. Nicely done.

    Grayslady’s opinion: Whenever I see “tax credit”, I think Repub scam for people who already make a good living, and who are sufficiently educated about taxes. That leaves out probably 70% of the population. If, as recent articles pointed out, 50% of children attending public schools are living in poverty, who are their parents? People living in poverty, that’s who the parents are, and the last thing they are worried about is a tax credit. The first thing they’re worried about is making more money so they can make ends meet. Wasn’t the $10.10 minimum wage in last year’s SOTU? That died a quick death when activist groups started lobbying for $15 per hour minimums, making the $10.10 as ludicrous as it sounded when first announced.

  2. Timmy

    Why is the Sheldon Silver story the least bit surprising? Does not the legacy of Robert Moses tell us that we haven’t scratched the surface of graft in NY? As Caro stated so eloquently (paraphasing): if you were in city or state government in NY in the 1950’s, if you were cop or a Housing Commissioner, you were on the take. These patterns are embedded like DNA in the practices of NY government. The only surprise with this is that Silver actually screwed up enough not to be protected from a lowly prosecutor.

    1. bob

      “The only surprise with this is that Silver actually screwed up enough not to be protected from a lowly prosecutor.”

      Bruno, the robin to Silvers batman, is still walking free after 5 years of trials.

      Also, Silver is still at the controls. Sitting exactly where he was last week- high above anyone else.

      1. bob


        This guy was caught ON VIDEO beating a woman for having the nerve to bleed all over his hotel room after he beat her up. It was so bad he had to drag her, by her hair, out of the room and down the hall.

        It took over a year to get him out of the senate. He didn’t serve any time in jail.

      2. James Levy

        If I were a NY politico it would be Silver’s age that would scare me. He doesn’t want to die in jail, I’m sure, and therefore will, if he reads the evidence against him as beyond his ability to “fix”, he will do whatever it takes to knock that jail term down to a symbolic 18 months. He has little incentive to bite the bullet, serve his time, and come out to enjoy the fruits of what he’s stashed beyond Uncle Sam’s reach (Caymans, Israel, your guess is as good as the prosecutors). He may try to tie this up in court until he dies (probably his preferred strategy right now). It all depends on how clearly and completely the prosecutor has got him.

  3. timbers

    “Fighters seize Libyan central bank and its $100 billion in foreign reserves [New York Times]. Qadaffi looking pretty good here, from a pure stabilty perspective, just like Saddam.”

    Every nation/situation we bomb turns into more chaos and few of the D.C. villagers ever connect the dots.

    1. OpenThePodBayDoorsHAL

      The dirtiest little secret of all about fracking and natural gas in general is its global warming profile. Methane (natural gas) is a much more powerful greenhouse gas than CO2. If it’s entirely contained and then fully combusted, sure, it produces much less CO2 than things like coal and oil. There’s the rub: in the extraction and distribution process a substantial quantity leaks into the atmosphere. The industry insists this is less than 1%. Scientists agree that anything above 3% would mean natural gas was worse than coal for global warming. The actual readings, across sites where it’s extracted and cities where its used, came in between 3-7%, with readings as high as 17%. Oops, natural gas is not so green after all…

  4. Tom Denman

    Sheldon Silver has had the nerve to stand up to the New York’s oligarchs at least some of the time (e.g. defending rent regulation and stopping Bloomberg pet projects like the olympics stadium in Manhattan). On the whole, Mr. Silver has pursued policies that are far more faithful to the New Deal tradition than those of Andrew Cuomo, Bill and Hillary Clinton or President Obama.

    I’ll dispense with invoking the presumption of innocence and simply note that NC readers know better than to uncritically accept everything that the government tells us.

  5. MartyH

    On the “Give a F#&k pseudo-virus” … if they’re giving so many … who’s taking? Is there a natural market (Walrasian or Misezian) in these things? Sounds like a non-State currency to me. :-(

    1. hunkerdown

      Indeed, it is a private fiat currency, best used for exchange with the people one cares about most — why, if you do see state-issued ones, you can be tolerably sure they’re debased to the point of worthlessness.

  6. Ulysses

    “On the whole, Mr. Silver has pursued policies that are far more faithful to the New Deal tradition than those of Andrew Cuomo, Bill and Hillary Clinton or President Obama.”

    That is an absolutely correct sentence, yet everyone mentioned in it, besides Shelly Silver, have worked hard to completely dismantle what’s left of the New Deal tradition so it isn’t saying a whole lot. To be fair, he has indeed been on the right side of many political battles in Albany over the years. Robert F. Wagner he ain’t, but he’s no Al D’Amato either.

    One of the saddest parts of this whole story is that if Diogenes himself were to search for an honest politician in Albany he would be hard pressed to find one. The upstate Republicans are no paragons of virtue, either. They don’t rub shoulders with as many billionaires as politicians do in the big city, but they also seize whatever opportunities present themselves for self-enrichment.

    1. MikeNY

      Props on the Diogenes allusion, well done!

      Yes, from all reports, Albany is the last place you’d look for an honest man. I’m not sure what the first place is, but I think it would be somewhere far from the corridors of power.

    2. bob

      Paragons of virtue? How does an upstate rebulican retire? Sell out to Silver, where the real money is.


      Working happily in Cuomo’s cabinet, as well as several paid muni-like authority boards.

      NY doesn’t have a “republican” party. They refuse to field any candidates. They usually put more effort into blocking candidates. The truest form of republicanism, in New York! Take that, texas.

  7. steviefinn

    Thanks for the ” I’m not W ” belly laugh & the Andromeda link, which gives a hint to the full implication of the statement: that there are more stars than there are grains of sand on every beach on this planet.

  8. Howard Beale IV

    Davos: Billionaire Greene Bets on U.S. While Bemoaning Jobs: Bloomberg

    A squillionaire puts the serfs in their places:

    “America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,”

    Hey, ISIS, here’s the people you should be fighting…

  9. flora

    re: Obama’s SOTU. Great post. I think Obama & Co. are suddenly focusing on the middle class in an attempt to steal Warren’s thunder without intending any meaningful follow-through. When Obama says it, it sounds like “Middle Class ™”.

  10. Howard Beale IV

    Billionaire’s Dream: Uber’s New American Economy: Fabius Maximus:

    He cites a Buzzfeed article how Uber flaunts the law:

    Uber has suspended a number of its drivers because they took steps to comply with California vehicle registration laws, escalating a showdown over ride-hailing regulations in the nation’s most populous state.
    Late last month, according to records and interviews, the company cut off at least a dozen drivers who had registered their new cars as commercial vehicles and told them in order to be able to work for Uber again, they must change to a personal use auto registration.
    But the California Department of Motor Vehicles takes the opposite position, and earlier this month issued a public memo emphasizing that any drivers who carry passengers for money must register their vehicles as commercial.

    To paraphrase the late Leona Helmsley: “Only the little people have to follow the law.”

  11. Fred Costanza

    I’m certainly no fan of Sheldon Silver, but I’ve got to point out that when George Pataki first took office, even other Republicans were complaining that “everything” in state government was for sale. David Patterson’s recent comment that it’s normal for lawyers who do no work on a case nevertheless to receive a referral fee is true: the referral fee comes from the fee of the lawyer who actually does the work, not from the ultimate client. As I recall, Joe Bruno made the comment that if you don’t want your legislators having part-time employment as lawyers (or referrers) then make being a legislator a full-time job with no outside sources of employment permitted. The real problem isn’t Pataki, or Cuomo, or Bruno, or Silver . . . it’s inherent in the structure of the state itself. We allow these little dynasties to form at all levels of government, which can be prevented by term limits and prohibiting “revolving door” employment between government agencies and the industries they regulate.

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