Haines has totally lost Stephen, as the Englishman goes into his conspiracy theory about the German Jews taking over Britain.
Stephen, meanwhile, is having that moment familiar to all precocious young artists wherein he realizes he is wasting his gifts among idiots. After his vision of the purge of the heretics, background music by Palestrina, he gives himself a little sarcastic applause. He’s so smart! But surrounded by racists and spongers.
So when he hears about a man who has drowned in the harbor, he easily finds sympathy.
The reference to the drowned man also links back to the Odyssey, and to Odysseus’ supposed fate, lost with the rest of his crew for 10 years since the end of the Trojan war. And given that our modern Odysseus is a Jew, Haines’ comments further paint him as an impatient suitor.