Reprint: Wall Street’s Revenge On Hollywood

This post originally appeared in naked capitalism on April 18, 2010. At the time, debate was raging about a “futures market” for films, similar to the futures markets in other commodities. 

  

Traditionally, the way that the Wall Street-Hollywood relationship works is, Wall Street arrives in Hollywood with much pomp and circumstance, carrying boatloads of cash to invest in movies. Hollywood—delighted with this new money—steers Wall Street towards some “premiere” and “prestige” projects. Wall Street—like a wide-eyed rube—invests in these seemingly prestigious, supposedly top-tier project—and promptly loses all that fresh cash on these box office duds.

Wall Street screams and curses and moans and belly-aches, and finally gets back on the red-eye for JFK, broke and defeated. Hollywood, of course, stays behind in California, working on her tan as she waits for that sweet Arab money to come to town. Or maybe some shy German with a clever tax incentive will save the day. Or maybe some exotic Latin American cell-phone money will show up. Who knows who it will be—Hollywood doesn’t care. All Hollywood knows is, some new sucker will come to town, thinking he’s King of the World—another sucker just begging to be fleeced. 

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