Cantor Fitzgerald Revives Hollywood Stock Exchange Plans To Let Studios Bet Against Movies
from the seems-like-an-odd-time-to-announce-derivatives... dept
Boing Boing has a post that caught my eye about Cantor Fitzgerald’s plan to offer bonds based on the performance of movies, basically allowing movie studios to “hedge” bets on the investments they make in certain movies. Now, in theory that could make a lot of sense, but as we’ve seen with the credit default swap market and the resulting financial meltdown, what starts as a “hedge” can often turn into something very different. Either way, it struck me as odd that any financial firm would be rolling out some new, high profile, product like this in the midst of so many questions about similar products. The Boing Boing post also includes a pointed criticism of the plan.
However, the story was also intriguing because in the back of my head I vaguely remembered that Cantor Fitzgerald had purchased the Hollywood Stock Exchange years back. HSX had been something of an early web success story — getting people to bet on the success or failure of certain movies and actors — but it had all been with play money. In wondering about this, I did a quick search here on Techdirt, and actually found a remarkably similar announcement from seven years ago, all about how Cantor Fitzgerald was getting ready to launch a real futures market for movies. Of course, even more noticeable was the date on that post: September 4th, 2001. That’s exactly one week prior to September 11th, and the attack on the World Trade Center… where Cantor Fitzgerald was headquartered. 658 employees from the company died from the attack in one of the many tragic stories to come from that day. I’m not sure if the Hollywood futures market actually will do very well, but it’s still interesting to see them revive this idea.