A new Wall Street scam: betting futures on Hollywood flicks

I've never trusted the numbers that come in from Hollywood anyway.

And I think that timing is important to a film's release date. Pity the film that gets released on the weekend we go to war, for instance. Everyone stays home to watch the tube.

Very risky, I'd say.

How would Wall Street silence left-leaning Hollywood by creating a futures market on Hollywood films?

Yeah, I can't figure that one out myself.

well Joe it's pretty obvious that a futures market on wall street would require an increase in employment of psychics and fewer psychics would available to read auras of the hollywood stars and producers thus leaving fewer leftwing bohemian types living in belaire resulting in fewer japanese gardeners. that about covers it Joe unless you have more questions.

Thanks, Dys. I kinda' figured that's how it worked.

The only country in the world where this is an important consideration.

Say the movie by Oliver Stone on Wall Street, they could bet on it being a hit then someone would secretly bet it a failure or even someone in the movie could screw it up somehow. It would flop and the studio could be ruined. Oliver Stone would be targetted thus so all his movies would have all kinds of problem. The Wall Street gang could make money and ruin Oliver stone and all those studios they hate one at a time.

Sounds like a Hollywood screenplay. But like many screenplays, it's all rather implausible. Although an evil cabal of right-wing financiers could bet on a movie being a flop, there's not a whole lot they can do to guarantee that it will be a flop (see, e.g., The Producers). Furthermore, if they do too much to make sure it's a flop, then either the movie won't be released (which would invalidate their futures contracts) or else everyone in the movie and investment communities would get wind of it and they would all "short" the movie as well, which would either cause the exchange to stop trading in the future or else it would cause the price to collapse, and then the cabal wouldn't make any money on its scheme.

Frankly, there are lots of easier ways for an evil cabal to ruin someone like Oliver Stone than to take out futures contracts against his next movie's box office performance. I'm not sure, however, if an evil cabal could do a better job of ruining Oliver Stone than Oliver Stone seems to be doing himself.

Anyway this futures market on movies was blocked as movie studio bosses and unions protested and politicians have blocked it.

As I understand it, it was blocked because there's really no need for it. In order to have a market, there has to be some sort of contingent event which will cause someone to lose money. If you want to guard against a calamity, you buy insurance. If you want to guard against price fluctuations, you buy a futures contract. For every futures contract there has to be a buyer and a seller, so there are parties on both sides of the transaction who have an interest in either the price going up or the price going down. The makers of a movie could buy a futures contract to hedge against a flop, but there are very few individuals or entities out there who have a financial interest in hedging against a successful movie. Anyone who "shorted" a movie, therefore, would likely be a pure speculator, and the federal authorities aren't too keen on encouraging that kind of speculation in the markets.

Futures contract only work with commodities. That was the argument put in by the Hollywood. They don't want the scandals associated with gambling like the Pete Rose Affair or with the late Jimmy the Greek.

God forbid there should be a scandal in Hollywood!!!!!!!!

Actually, futures contracts can work with any future contingent event. Currency futures have been traded for decades, and currency isn't a commodity (at least not in the normally accepted sense of the word). There is a growing market for weather futures, and weather certainly isn't a commodity. In those markets, however, there are people on both sides of the transaction who need futures to hedge their cash positions. That just doesn't seem to be the case with movie futures.

Anyway, the presence of futures on Hollywood movies would tarnish the image of the product which is probably the intention. Viewers would then think there is manipulation behind the scenes. There would bee all kinds of speculations. This publicity is not what the studio bosses want.

http://money.cnn.com/2010/10/25/news/economy/health_insurance_scams/index.htm

Criminals are behind the deregulation. They don't want regulations that would help identify their thefts and their identities.