“Having assembled his folk melodies, Stravinsky proceeded to pulverize them into motivic bits, pile them up in layers, and reassemble them in cubistic collages and montages.”

Alex Ross on Stravinsky, in his book The Rest is Noise: Listening to the Twentieth Century. Quoted by Steven Poole in his excellent review.

Er, in case you’re wondering (as I was) what ‘motivic’ means, Wikipedia says that it’s “using a distinct musical figure that is subsequently altered, repeated, or sequenced throughout a piece or section of a piece of music”, and that it “has its roots in the keyboard sonatas of Domenico Scarlatti and the sonata form of Haydn and Mozart’s age.”

If you’re puzzled by what happened to HBOS shares last week, then this sobering Telegraph column by Jeff Randall may help.

Put simply: I know that you want to buy 100 shares in Jayar Junk. The shares are trading at £10 each. We strike a deal at that price, and I promise to deliver them in one week’s time. At this point, I still don’t own any Jayar Junk. No matter, my buddies at the Rumour Mill are about to go to work.

Through a series of postings on dodgy websites, anonymous emails and loose talk in dealers’ watering holes, we spread the story that Jayar Junk is running out of readies. Very soon the shares start falling, to £9, £8, £7. In angst-ridden markets, there is no bottom. When they hit £5, we buy 100.

Bingo! You are contracted to take them from me for a total of £1,000. My cost is just £500. I double my money and you are ripped off. It’s no more complicated than that. Like a spiritualist medium, the Rumour Mill relies on its victims believing an illusion: stock market ectoplasm.

It’s not illegal “to short” a stock, ie, sell shares that you do not have. Several reputable hedge funds made millions by “shorting” both Northern Rock and Bear Stearns. The law is broken, however, when the Rumour Mill creates malicious falsehoods with the aim of driving down prices.

For ordinary folk, whose pensions are jeopardised every time the Rumour Mill starts turning, these are troubling times. They tuck away a few quid each month in the belief that they are investing for retirement. They accept that there is risk, but don’t (yet) regard this form of saving as a day at the races.

But in his book, The Truth About Markets, Oxford economist Professor John Kay writes: “Most transactions in securities markets are not about sharing or spreading risks; they are like transactions in a betting shop. The people who engage in them believe they are deploying their superior knowledge, but this can never be true of more than a small minority of players.” The trick for regulators is to make sure that this small minority has gained its advantage openly and honestly, without recourse to chicanery. Experience tells us, however, that this is extremely difficult, if not impossible…

From today’s Telegraph…

The Bank of England has demanded the Financial Services Authority investigate inaccurate rumours sweeping the market that a British lender is in crisis after being forced to issue a vehement denial that it has been called into emergency meetings.

Sources said the Bank was livid with what it believes are short sellers attempting to turn a profit by spreading false stories about distressed lenders that could undermine the stability of Britain’s financial system in these fragile markets.
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A Bank spokesman said: “No meeting has taken place or been scheduled with any financial institution in the UK.”

It added that it made no loans through its standing facility yesterday.

HBOS appeared to be the main target of this morning’s speculation. Its shares tumbled up to 11pc on rumours that it had applied for emergency central bank funding despite a clear denial.

An HBOS spokesman said: “There is not a shred of substance whatsoever in these unfounded and malicious rumours. This is a classic case of a lie being half way round the world before truth has its boots on. It is deeply concerning these rumours are circulating the markets.

“HBOS is one of the strongest financial institutions in the world with a balance sheet of £660bn the group has also had the largest deposit base in the UK. We are one of the most respected names in the wholesale and capital markets. HBOS is a very strong financial institution.”

Competition Fuels Broadband Use in Europe – New York Times

BRUSSELS — Fierce competition from new providers has pushed the level of broadband subscriptions in eight European countries above the levels in the United States and Japan, according to figures to be released Wednesday.

Growth could accelerate further if the European Commission succeeds in a drive to jolt those countries still dominated by former state monopolies, according to the top telecommunications regulator in Brussels.

The commission says the European Union added 19 million broadband lines in 2007, the equivalent of more than 50,000 households per day…

Hooray! Michael’s got a nice DSLR and won’t have to rely on his cameraphone all the time!

Er, he points out that it’s the mirror, not the lens, that is dirty.

Rats! A great talent snatched away…

Anthony Minghella has died aged 54.

Minghella’s films included The English Patient – which earned him an Oscar for best director in 1997 – as well as Truly, Madly, Deeply and Cold Mountain.

He had an operation for a growth in his neck last week and the operation seemed to have gone well. But he had a fatal haemorrhage at 0500 GMT on Monday…

The English Patient was one of the best films I’ve ever seen.

Tony Dye, the only fund manager to talk sense during the first Internet bubble, has died. He withdrew his clients’ money from techbubble shares and put it into real companies and cash. For which service he was duly, er, retired. David Livesey pointed me at a generous obit in the Telegraph.

In March 2000, with the FTSE index at 6,400 and with Dye’s clients estimated to have lost some £8.5 billion in potential bull market gains, P&D finally lost patience. It was announced that Dye had taken “early retirement”. By this time the firm’s funds under management had fallen from £60 billion to less than £35 billion.

But Dye was – albeit belatedly – proved right. Within a month of his departure, and before P&D had had the chance to change its strategy, the stock market turned. Internet and telecom shares plunged, and the firm found itself rocketing from the bottom to the top of the pension fund performance tables.

The irony was that the hundreds of fund managers who had followed the herd and been proved disastrously wrong kept their jobs, while Dye paid the price for his independence of mind. Yet he remained philosophical, taking wry comfort from Keynes’s observation that “worldy wisdom teaches that it is better to fail conventionally than it is to succeed unconventionally”.

Charles Arthur has come up with an inspired analogy for the sub-prime credit syndrome

But here’s the thing: all the reselling and leveraging of debt, in some cases producing up to $60 of “debt” from $1 of assets (and those assets not always too certain – how much is a house worth? Only what you can get someone to pay for it), was a way of feeding back into the system things that were already contaminated.

Which reminds me of the story that I covered in great detail in the late 1990s and early 2000s: BSE. Cows, fed ground-up cows. Any trace of disease (especially a brain-rotting one, which may have been endemic) gets transmitted throughout the (thundering) herd.

BSE turned out to be very, very hard indeed to eradicate – I’m not sure it’s gone away even now. (I’ll check the stats in a bit.) I think that the financial BSE in the system now is going to prove just as hard to get rid of; only when you flush all the crap that the banks have been feeding each other out of the system can you be sure it’s OK. And how long exactly will that take?