The Death of Imagination

Literally, yes, but it has a variety of slang meanings such as "bad blood", "bad luck", "bad faith", "bad mood", and so on. Here's how it appears in context: Teníamos tanta cosas en común que se decía de mala leche que éramos hijos de un mismo padre[.] "We had so many things in common that it was said with ill intent that we were sons of the same father." This gives me the impression that this scurrilous talk is tantamount to calling him and his friends bastards. A few pages later he uses the opposite, dec[ir] de buena leche, to indicate that an apparently catty remark about a painter is actually not meant as an insult at all.