Talk about your bad timing: The two companies that are trying to secure government approval for trading movie futures have gotten hit by the legislative freight train known as the financial reform bill. Sen. Dianne Feinstein, D-Calif., has called on the chairman of the Commodity Futures Trading Commission to hold off making a final decision about the merits of the new trading idea. It'll probably happen, given the current outcry over the Goldman Sachs case. Frankly, I wouldn’t be surprised to see movie futures take a dive. Betting on how well or poorly a movie might perform does not seem like a very good idea. Is it any different than putting a few bucks down on who will win the Lakers game? From the LAT:
"Movie studios, joined by theater owners and the Directors Guild of America, have waged a campaign in recent weeks to fight the proposed exchange, saying it would be vulnerable to manipulation and create bad publicity for films before they hit theaters. The announcement comes a day after a Senate committee, as part of a financial reform package, voted to ban proposed exchanges that would allow the movie industry and investors to place bets on movie ticket sales, delivering a big blow to two trading firms seeking to create the exchanges."
From Business Week:
"For cinematic futures to get off the ground, the CFTC would have to provide additional approvals for the details of the new trading operations. That further permission is far from assured, warns Commissioner Bart Chilton. Final clearance of what he calls a "popcorn prediction market" would be "a very different question" from allowing the bare-bones notion of the exchanges to move ahead, Chilton says via e-mail. He told Bloomberg TV before the CFTC vote that he was 'worried about manipulation.'"