HSX: Week of June 30, 2009

Continuing and expanding the tradition that was apparently started last week, we have two movies opening on Wednesday this week. Neither of them is as big as Transformers 2: Revenge of Michael Bay, but then again, not much could possibly be.

First up is another sequel, "Ice Age 3: Dawn of the Dinosaurs," (ICEA3). I have a theory that, in any given trilogy, one of the three movies will be bad. Evidence for this includes the Matrix and Godfather movies. However, there is also evidence to the contrary, notably the original three Star Wars movies. So this might be a winner. The stock is at H$176, down H$5 for today, but right near the high, after a long and steady climb up. It's being released in digital 3-D, which is always helpful. It's opening over a five-day weekend, so the adjust will be [Previous Box Office + (2.7*Box Office Fri-Sun)]. The strike price is H$60, for Friday-Sunday. The call (IA3CA) is at H$6 and change. The put (IA3PU) is at $H1.35 and sinking. The call predicts weekend BO of $66 million, which translates into a stock price of H$178. But that's without the Wednesday and Thursday BO. If the options are right, then the stock is seriously undervalued. It's only at 33% on rottentomatoes.com, so maybe my theory of one of a trilogy being a bad movie applies here. But it's Fourth of July weekend, so $60 million for an animated feature is not unrealistic

Stock: Long

Call: Long

Put: Short

Johnny Depp returns as an outlaw, but not a pirate this time. He's John Dillinger, one of the Public Enemies (PUBNM). Christian Bale plays one of the FBI agents in pursuit of him, although I haven't seen much of Bale in the marketing. The stock is at H$109, with the same formula as ICEA3. The strike price is H$35 for Friday-Sunday, again just like Ice Age. The call (PUBCA) is, again just like Ice Age, H$6 and change. The put (PUBPU) is at H$2.52, a high, so the signals are a little more mixed. But again, the prediction of the options is roughly in line for the BO for just the weekend, excluding Wednesday and Thursday. What is very different about this movie from ICEA3 is that the trend is not good - the high was H$141, a long ways from where it is today. It's at 56% on rottentomatoes.com, and that might actually matter for this movie; as an "adult drama," it's somewhat more important to pay attention to the critics. The positive reviews are decent but not stellar, but the negative reviews are fairly harsh.

This movie needs to do at least $15 million on Wednesday and Thursday, plus $35 million Friday-Sunday, to make its price. That's possible, although I am not optimistic that it will beat the $41 million predicted by the call. However, I have a policy of not shorting a call unless it's clear that the movie will not make the strike price, because of the danger of being caught by a major surprise on the upside. Johnny Depp is still a major star, and he's good for this role. Crucially, it's unlike anything out there - not much in the way of special effects, which is occasionally refreshing. Let's be optimistic.

Stock: Long

Call: Long

Put: Short

Update Wednesday morning: PUBNM is tanking. It's down H$8 this morning, a very strong sign that it's not going to do very well. I am reversing my positions on the stock and the put. I'm keeping the call long, but I'm also going to short it. I have it long at the IPO price, H$2, but I'm shorting it at the current price H$5.64. I think it's a safe bet at this point that it won't make $40 million this weekend, or at least not a great deal more than that. We'll see how this works out.

Update Sunday night: Well, that hurts. I bet seriously wrong on ICEA3; it adjusted down H$30. I don't want to think about too much, but I should have paid attention to my theory that in a trilogy that is basically an excuse to make money, one of the three movies will be bad. Looks like that is the case here. It made $25 million in the first two days, then $42 million over the weekend. Pretty good, but nowhere near what the stock and options were predicting. I should also remember another rule: with a price like this, there is more potential on the downside than the up.

I did, however, bet right on PUBNM; it $14 million in the first two days, and then $36; it adjusted down H$14. At least I got that one right.

Franken wins!

Al Franken has won the Minnesota Senate election, at long last. The Minnesota Supreme Court has ruled unanimously in his favor, and Norm Coleman has conceded. What a long strange trip it's been. This is the seat formerly held by Paul Wellstone, who died just before the election in 2002.

It still feels bizarre to call Al Franken a Senator, although of course it was odd to call Ronald Reagan President.

On a completely different topic, I linked to Talking Points Memo for this story, partially because I saw it there first, and partially because I wanted to give them props for doing such a great job covering this story lo these many months. I suspect that there are other bloggers who are doing the same. Which is good news for TPM, not such great news for traditional media sites, like nytimes.com. Which is probably why TPM is hiring seven new people, in addition to their regular interns. One less reason to worry about the future of journalism in this country, but one more reason to worry about the future of newspapers.

Stars falling from the sky

One meme in Hollywood this summer is that the movie business seems to be going through a shift of sorts. Movies featuring movie stars are failing, while the most successful movies are those without stars. The LA Times examines this trend, and, unfortunately, engages in some utterly trivial, completely inside-Hollywood analysis.

The studios, which for years have banked on richly paid stars to open their movies, are now witnessing a new reality: even the most reliable actors can be trumped by what Hollywood executives like to call "high concepts" (a bachelor party gone awry), movies based on brand-name products (Hasbro's Transformers toys), and reinvented franchises (not your father's "Star Trek")

I have name for this current batch of "high concept" movies.

I call them "good movies."

And this, quite simply, is the secret of how to make money in Hollywood: make a good movie for a reasonable cost. That's it. Of course, making a good movie is not simple, just like writing a good book or painting a good picture is not simple. But there is no secret beyond that to making money in Hollywood. Whether or not "Transformers 2: Revenge of the Fallen" is a good movie is debatable, but it clearly delivers substantial entertainment value.

People who believe that casting movie stars is the secret to making money on a movie confuse correlation and causation.

Correlation is when a moviegoer says to herself "I have seen Julia Roberts in good movies before, so if Julia Roberts is in a movie, then there is a good chance that it will be good, and that I will enjoy it." If you eat an apple and enjoy it, then there is a good chance that you will enjoy the next apple. But that is not guaranteed - you may have liked that particular apple more than the next apple you eat.

Causation is when a moviegoer says to himself "I have seen Tom Cruise in good movies before, so if Tom Cruise is in a movie, that automatically means that it is good, and I can be sure that I will enjoy it." If you drop an apple, it will fall to the ground. If you drop another apple, it will also fall to the ground, because it is affected by gravity, which is the cause that makes the apple fall. As long as you are standing on the planet Earth, that will not change.

But there is no such thing as causation in the relationship between movie stars and whether or not the movies that they are in will make money, because there is no causal relationship between movie stars and whether or not the movies they are in will be good movies. Movie stars have a combination of qualities: good looks, talent, and the ability to choose good roles for themselves, and good movies for themselves to be in. Julia Roberts and Harrison Ford are both great examples of this. Both of them have demonstrated very good taste when it comes to picking roles for themselves over the years. So moviegoers have strong associations between Julia Roberts and Harrison Ford and good movies. But neither of them has a perfect track record. About the only actor I can think of who has a near-perfect record of choosing good roles is Meryl Streep.

Casting Julia Roberts does not mean that the movie will be good, or that audiences will automatically assume that it is a good movie. Casting Julia Roberts means that audiences will notice the movie, and pay some attention to it, and start out with a favorable impression of it (at least many people). That's it.

People do not go to see movies strictly to see the actors and actresses who are in them. They go to see the movie itself. The movie itself is a package, and the stars are parts of that package. Important parts, to be sure, but only parts.

People go to see movies for one reason: they want to see a good movie. They may want to see a comedy, a tragedy, an action-adventure movie, a thriller, or a horror movie. They may want to laugh, cry, or be terrified. But at the end of the day, they want to see a good movie. Putting a movie star in it increases the chances that audiences will perceive it as a good movie. But putting a movie star in a movie does not guarantee that it will be a good movie. And good movies do not necessarily have to have movie stars in them. Consider the following list:

The Graduate

Jaws

Star Wars

Raiders of the Lost Ark

E.T.

Back To The Future

The Usual Suspects

Four Weddings and a Funeral

Shakespeare In Love

Titanic

Pulp Fiction

What do those movies have in common? Each of those is a great movie. And not one of them featured an actor or actress who was an A-list star at the time of the movie's release. The closest any of those has to a star is John Travolta in Pulp Fiction, but he was considered a has-been at the time, and this was his comeback role. Some of those are utterly cliched. Jaws? Jaws is about a giant creature that terrorizes people, with the creature created with mechanical effects. The same description can be applied to King Kong, Godzilla, and a thousand other cheesy B movies. There is one thing that distinguishes Jaws from those thousand other movies: it's a damn good movie.

High concept? Consider Titanic. It's based on one of the worst ideas for a movie ever made. "I know, let's spend $200 million on a movie about one of the worst man-made disasters ever, cast two unknowns, and make it a tragic love story, with one of the main characters dying a horrible death almost immediately after they fall in love." Great! Let's go! Sounds like a winner!

By the standards of Hollywood that the LA Times recites, Titanic should not have been a successful movie. Kate Winslet was a total unknown. She wasn't even particularly svelte. Leonardo DiCaprio had been in a bunch of art house movies. But it's the most successful movie of all time.

The article quotes a number of Hollywood executives. They all try to provide solid analysis, but they somehow manage to make trendy marketing concepts sound like bad post-modernism.

"The world has changed, throwing conventional wisdom out the window," said former studio marketing executive Peter Sealey. "The star-power opening is fading in importance and the marketing and releasing of movies is going into new territory where the masses are molding the opinion of a movie. People no longer say, 'It's a Tom Cruise movie, let's go see it!' With social networking, you know everything about a movie before it comes out."

Let me quote part of that again: "the marketing and releasing of movies is going into new territory where the masses are molding the opinion of a movie."

In other words, the opinion of the customer matters. Moviegoers are now finding out whether or not a movie is good very quickly, before the marketing has a chance to work its seductive magic.

The opinion of the customer matters. Hey guys, welcome to capitalism. News flash: figuring out what the customer wants and delivering it is your job as a studio executive.

I don't think that every studio executive in Hollywood is this obsessed with marketing, but I have noticed a tendency in the LA Times, particularly in the business section, to engage in this kind of analysis. The problem with trying to analyze trends in the movie business strictly in terms of marketing is that you end up with some serious nonsense:

"Movie stars in the right films provide a certain amount of value from a marketing point of view," he said. "But there is no star power that you can throw at a movie that gives you the kind of brand awareness you get from pre-sold titles."

But "Star Trek" was not a pre-sold title. The last few Star Trek movies were forgettable. "The Hangover" is about the farthest thing from a "pre-sold" title. "Terminator: Salvation" is a pre-sold title, part of a franchise, with star power, and yet it's not doing all that well. "The Proposal" is a movie with a somewhat silly premise, without a great deal of originality. But it's a good movie, it works, and it's making money. The woman in the lead in this romantic comedy is in her 40's, and there's a joke in the movie about the fact that she doesn't have a very big bust. She's not funny or charming; she's very unpleasant through most of the movie. But she's the lead in a successful romantic comedy.

Adult dramas are allegedly not doing terribly well. But the examples cited here, "State of Play," "Duplicity," and "The Soloist" all sounded very cliched to me, which is why I didn't see any of them. Corporate and political conspiracies? Yawn. An inspirational movie about a black homeless guy? Please. Not finding myself excited about that one. I don't care who is in them - if I think they're cliched and boring, I'm not going to go see them.

The basic problem with trend analysis is that trends are, by definition, ephemeral. Movies are the ultimate trend-resistant industry because they are one industry defined by a constant demand for the new. That's why it's a "creative" industry - customers want something that has just been created. Very soon after a trend starts, if indeed it is a trend, customers will be bored by it.

I'm sure all of the executives quoted in this article are highly educated. But there is such a thing as too much of a good thing.

"There's something to be said for chemistry between actors, and you don't need to be a star to have chemistry," said Oren Aviv, Disney's production president, suggesting that is exactly what the casts of "Proposal," "Star Trek" and "Hangover" all have in common -- "combined with an idea that people connect with."

"There's something to be said for chemistry between actors." Well, yeah. Sort of like there is something to be said for baseball players who can hit the ball. "[A]n idea that people connect with." Somehow it's impossible for these people to say "You know, what people want is to see good movies." Like there is this urge to sound deep and profound, an urge that apparently interferes with the operation of common sense.

Maybe the problem is that the LA Times needs to figure out something to say about movies on a constant basis, and there just isn't that much to say. Good movies are more likely to make money than bad ones. The definition of what is a good movie changes, and is different for different people, but good movies make money. That's the formula, folks. Trying to find lots of different ways to say it just ends up sounding like you are on the wrong side of the sublime/ridiculous divide.

Someone once said that movies are a great art form, but a terrible business. What they meant was that business is about finding the rules that will determine how to make money, and then following those rules. But art is about finding the rules of what makes good art at a particular time, and then breaking them.

Businesspeople want stability and certainty. Artists want the freedom to be creative, to be daring and different.

But it's not even that simple. Good artists do follow some rules; good businesspeople do too. But great artists follow certain rules, and then break others. Great businesspeople do the same thing. The first trick is knowing what rules to follow, and what rules to break. The second trick is getting the great artists together with the great businesspeople. The last trick is figuring out what the audience wants before the audience knows that it wants it.

Daily Kos hate mail: a classic

Kos has a great feature that he's been running for a couple of months. Every Saturday, he collects the most abusive hate mail that he has received that week, and posts it, thereby holding up various conservative idiots for ridicule. I think it's a brilliant strategy. One of Kos' great virtues as an activist is that he makes it clear that he thinks progressives/liberals/Democrats should not be afraid of conservatives/Republicans, and he makes it equally clear that he has nothing but disdain for liberals who ARE afraid of conservatives. I strongly agree with him on this, and am very thankful that he makes this effort. Every now and then I think he's a tad intemperate, but that's trivial.

In these posts, he usually has a solid collection of incoherent screeds, riddled with spelling and grammatical errors, almost always including some gay bashing. The last couple of weeks have been a little thin - apparently word has gotten out that sending Kos this kind of garbage does not do the Fox News causes a lot of good. But this week he got a classic. It reminds me of a contest I heard about years ago. The idea was to create the ultimate tabloid newspaper headline. I think the winner said something about an alien having Elvis's baby on the moon (plus other elements) - they managed to work in just about every National Enquirer cliche. This email works in just about every hate mail cliche possible. Great entertainment value. Kos also includes a poll about this email, just for added fun.

Obama and gay rights: Stonewall edition

Frank Rich wrote about gay rights and Obama yesterday, the anniversary of the Stonewall riots. He confessed that he didn't hear anything about Stonewall when it happened, despite his personal interest in civil rights. I don't blame him; I don't think I heard about Stonewall at the very least until I was in college. Rich is frustrated with Obama's lack of action on gay rights, as many liberals are. He comes up with a couple of explanations, and favors this one:

But the most prevalent theory is that Obama, surrounded by Clinton White House alumni with painful memories, doesn’t want to risk gay issues upending his presidency, as they did his predecessor’s in 1993.

Undoubtedly. But I cannot figure out why Rich doesn't go just a little deeper, and look into the Congressional politics. It's really quite simple. There are a number of Democratic senators and representatives, primarily from the South, who absolutely do not want to vote on any gay issues this year. Claire McCaskill from Missouri, Kay Hagan from North Carolina, and Mark Warner from Virginia are probably in this group. I haven't checked out their positions on gay rights, but I would be very surprised if they are pushing for the repeal of either DOMA or DADT. For Obama to push for the repeal of DOMA right now would be a gift to certain Republicans, to say nothing of Rush Limbaugh and Glen Beck. For some of those senators and congresspeople, voting for an expasion of gay rights, particularly gay marriage, might cost them enough votes to lose them an election. That's a very high price.

I've said it before, and I'll say it again: Obama is being very careful on the repeal of DOMA and DADT because he doesn't want to lose. If he pushes for a repeal of either, and it fails, there will not be another opportunity for at least five years.

Andrew Sullivan is, of course, passionate about this, but I also think he's a little blinded by his own passion. A couple of weeks ago, more frustrated than usual, he wrote

Of course these things can be done. If anyone high up in the Obama administration or the Pelosi-Reid Congress gave a damn, much would have been done.

No, they can't. There is still much work to be done, and there are still many people who are adamantly opposed to gay marriage. There has been amazing progress on gay rights just this year, but let's not forget that Prop. 8 passed in California last year. And it didn't just pass in California: it passed in Los Angeles County, one of the most liberal counties in the country.

Sullivan has a list of things that he thinks supporters of gay rights should do to pressure Obama and the Democrats. I think a much more fruitful approach would be to compile a list of minor things that Obama can do to support gay rights - a checklist, if you will, and then demand action on each of those. Many of them will not require Congressional action. Obama is already working through some of those, and they require a lot of work in the bureaucracy. There are two rationales for this approach. First, it gets a lot of things done. Second, it will lay the ground work for the more dramatic action of repealing DOMA and DADT by showing that gay rights can be expanded, and the politicians supporting such expansion can survive.

Mark Sanford and the future of newspapers

I haven't been blogging much over the last couple of weeks because I was working on some other stuff. So now I am going to catch up on some things I missed.


First up is Mark Sanford. The governor of South Carolina went out of town for a few days and, beyond anyone's expectations, came back to become much more famous (and infamous) than he was previously. Then, the next day, two very famous people died, and he was off the public's radar.


I don't want to condemn the man, or even comment on the blatant hypocrisy of a man who runs as a pro-family values candidate and then cheats on his wife. I do find it interesting that the public seems to have a finely nuanced understanding of these scandals. Some people are run out of office forthwith; see Spitzer, Eliot. Some survive, although they are damaged. See Clinton, Bill, and Vitter, David. Americans seem to be able to make fine distinctions based on the facts of the case. Bill Clinton cheated on his wife, but didn't break any laws in the process, and already had a reputation as a womanizer. Most people decided that it was a matter better left to he and Hillary. Spitzer, on the other hand, was a figure of rectitude, quite self-righteous, and broke laws. He didn't just get a blowjob; he crossed state lines and hooked up with a prostitute. The public understood that Spitzer was worse than Clinton.



What I found fascinating about the Sanford story were a couple of minor details about how it was covered. I first noticed it at TPM. The earliest post about it that I can find is from Monday, June 22nd. I remember thinking that it was odd that TPM was paying any attention to it - so the governor of South Carolina is incommunicado, so what? But then it started getting interesting very quickly. So that was a good catch on the part of TPM. I would not have known about it unless TPM caught it, because I have no reason to check in on South Carolina politics unless something very interesting is going on, and TPM found something very interesting very quickly.

What is more interesting is that this had great benefits for The State, South Carolina's major daily. They caught onto the story very early, and the traffic for their Website apparently just boomed. They've got a good timeline.

In the pre-Internet days, this would have been good for The State, but they could not have made that much money off of it, at least not right away. They would have sold more newspapers, but newspaper companies don't make a lot of money off of selling the physical copies of their newspaper; the price of the paper basically covers the cost of producing it. I delivered newspapers when I was a kid, and the paper didn't get the full price of the paper. First, subscriptions are discounted. Second, I took a cut of the price as my pay. So for a twenty-five cent newspaper delivered to someone's door, the paper might get only twelve cents.

Pre-Internet, The State would benefit by generating publicity for itself. It might win an award or two. And it might win over a few more subscribers. But suppose it sells 200,000 daily copies (that's a guess, but it's probably not far off). Management knows that this is a hot story, so they print an extra 20,000 copies, or 10% more, for three days. That extra 60,000 or so copies might slightly raise the average number of papers it sells, which might slightly increase the rates it charges advertisers. But there would not be an immediate, tangible benefit for the paper itself. I doubt they can charge the advertisers more for selling extra copies, although I suppose it's possible.

Today, however, the benefit is clear, immediate, and very tangible. Pre-Internet, The State would not have been able to sell extra papers in, say, New York or Washington, let alone another country, like, say, Argentina. Now, however, they generated a huge amount of traffic around the country, and around the world, almost instantaneously.

The best part for this newspaper is that that extra traffic on their Website generates extra revenue for very little extra cost. The primary cost is bandwidth, which is cheap and getting cheaper. Newspapers have one advantage on the Web, which is that they deliver valuable information primarily in the form of text, which takes up a minimal amount of bandwidth. But their ads are in the form of pictures, text, and video. Presumably they charge dramatically more for a video ad than for a simple picture. So the more bandwidth they use for delivering ads, the more money they make. They can control how much text and pictures they deliver, so they can control the amount of bandwidth they use in terms of content versus ads.

The other costs involved here - i.e., paying the reporters and editors, as well as other overhead - are already taken into account. There are no extra costs involved in covering this particular story. All they have to do is send a reporter to an airport that is fairly close, make a bunch of phone calls, and set up a video camera at the governor's press conference.

This whole episode bodes well for newspapers than can move quickly and cover a story like this. And there will always be stories like this. The State had emails between the governor and his lover. Why? Because someone had forwarded the emails to this particular newspaper. Why? Because if you have information that could potentially be very embarrassing to a political figure, you send it to a newspaper. Why? Because they know how to handle it, and they will give it the broadest possible exposure. The State did not release these emails because they could not be authenticated. Which sounds like they did their job - they checked out the information they had, performed some basic investigative journalism, and then made a responsible editorial decision. Someone also called the paper and gave them a heads up that he had been seen on a flight to Argentina, which is presumably why they had a reporter waiting for him at the airport when he came back.

All of this works to newspapers' strengths - they have reporters ready to move at a moment's notice, they have writers and editors who understand the situation and can provide context quickly. Newspapers have always been highly invested in finding malfeasance and scandal. What's different today is that they can make money off of breaking news much faster than they could before. Which means that they have that much more incentive to break that news themselves.

HSX: June 24, 2009

I'm posting on a Tuesday because there is a big movie opening tomorrow, Wednesday, and it's going to get a fair amount of attention. That would be Transformers 2 (TFMR2). HSX is having technical problems, so I can't link to the stock (correction: HSX was having technical problems, they have been solved). This is not surprising, since they are launching v4 tomorrow. Supposedly they are going to be down for only a day or so. I think it's kind of a weird decision to launch a new version on the day one of the biggest blockbusters of the year opens. You would think that they would choose a slow kind of day to make this transition. But no! I know the strike price is H$100, but I'm not sure how they are calculating that, over three or five days. I also seem to recall that the price of the stock was around H$340. Last time I checked, a day or two ago, both of the options were around H$2. I'm just going to go way long.

Update Wednesday morning: the call is at H$5 plus change and rising, the put is at H$2 or so and falling. Why the put managed to get above the IPO price is beyond me. Screen counts? We don't need to stinking screen counts. Critics? I cannot imagine a movie less immune to critical consensus. I'm not even going to bother with either screen counts or critics. There are action adventure blockbusters with artistic merit. This is not one of them. This is the ultimate guilty pleasure.

Stock: Long

Call: Long

Put: Short

Update Monday morning: Well, the movie gods smiled on Michael Bay and the Transformers, even if the critics didn't. It cleared $201 million over five days, a rather spectacular opening. It adjusted up H$54, also rather spectacular, considering the stock was already in the stratosphere. I didn't blog about My Sister's Keeper, because of the upgrade on Wednesday and Thursday, and because I was traveling on Friday. But it did fairly well, opening with $12 million, and adjusting up H$5. I had the call short and was long the put, with a strike price of H$10. So I got burned on the options, but I was long on the stock, so that mostly worked out.

The WaPo fires Froomkin

The Washington Post fired Dan Froomkin, one of my favorite writers on washingtonpost.com. Wow, what a bad move. Glenn Greenwald has a great takedown on the sheer stupidity. That just boggles my mind. I loved reading his posts.

The first problem with this is that the Post apparently expects us to believe that this is because Froomkin wasn't generating good numbers in terms of traffic. I don't buy that for a second. Why? I have no idea what Froomkin's numbers were. But I don't buy it because I have long believed that I should be skeptical of claims from those in power. I believe this particularly because of the experience of two Washington Post reporters. Apparently Fred Hiatt, WaPo editor, didn't learn the lessons of Woodstein as well as some of the rest of us.

Another reason I am skeptical is that this looks like a blatantly political move. Again, why? Because Froomkin was a highly opinionated political writer. To justify firing someone like him, there has to be clear and substantial evidence of either egregious journalistic misconduct, personal problems, or clear evidence of his failure to generate business. I haven't seen anything of the kind. There has not been any allegation of any kind of misconduct, personal or professional, and if he wasn't bringing in the numbers, let's see those numbers. But back to the political: this looks political because he was a political player. When you fire someone who is a key player in the nation's politics, it is going to look political. That's how the game works. If you don't want it to look political, you damn well better have your cover story airtight.

The final reason I think this is stupid because Froomkin can, and probably will, move to another media property. He has a wide and loyal constituency, and this firing instantly gives him a certain degree of credibility. To say nothing of lots of publicity. If anything, it makes him more valuable. The smart thing would be for the NY Times to snap him up. If he's successful at The Times, that will expose the WaPo's cover story as nonsense. He could easily set up his own blog. He could easily go on a speaking tour. He could work for The Atlantic, or TPM. Josh Marshall would love to have him on board. If he drives traffic to any of those sites, the problem will clearly be with the WaPo, not him.

I've been reading the WaPo for well over 20 years. I have very fond memories of reading it when I lived in DC. I have particularly fond memories of the contests in the Style section. I used to read David Broder and actually learn something about politics. I've been clinging to my faith in it despite the criticism of the Washington press corps from bloggers. I used to visit washingtonpost.com at least once a day, if not more. I've been frustrated by the site, because I think it just pales in comparison to nytimes.com. But now I have one less reason to visit it. Actually, two. I have two fewer reasons to visit washingtonpost.com. The first reason is that one of my favorite writers is no longer there. The second reason is that I no longer trust it as well as I once did.

HSX: Week of June 19, 2009

Summer has been here for a while in the movies, but it's still technically not quite here. Just around the corner, tho! Just a couple of days!

This weekend is actually a bit of a lull in the summer movie season, by which I mean that there aren't any blockbusters opening. Two comedies, no action adventure. No explosions, at least none that I have seen in the trailers.

It's been a while since we've had a good romantic comedy, and one of the reigning queens of the genre, Sandra Bullock, is in the role of a demanding boss in The Proposal (PROSL). Good romantic comedies put their characters in two diametrically opposed roles. This is one reason I like romantic comedies that have one of the characters playing a criminal; that's a good obstacle to overcome. Trying to get along with a horrible boss is a problem that most people can identify with. The stock is at H$71, just slightly off its high, but the trend has been very steadily upwards. Strike price is H$25, with the call at H$4 and change, and the put below a buck. It's at 53% on rottentomatoes.com, which is a little disappointing but not surprising. Unless it bombs, I am interested. It also has basically no competition. $25 million sounds about right. $30 million may be optimistic, but I'm going to go long on the call because of the danger of shorting with lots of upside potential.

Stock: Long

Call: Long

Put: Short

Jack Black is usually good for a few laughs, if you like his sense of humor. He's playing the mentor - of sorts - to Michael Cera in Year One (YEAR1). But his schtick also seems to be wearing thin. Maybe it's me. I like him, but I thot he was horribly miscast as Kate Winslet's love interest in The Holiday (particularly when the opposite pairing was Cameron Diaz and Jude Law). This is clearly his kind of vehicle, but it also looks like it could be basically a string of one-liners. The director, Harold Ramis, has a rather good track record (Groundhog Day), but he's also not a young man anymore, so I'm not sure how well he's going to do making a movie for guys who have clear and recent memories of puberty. Stock is at H$52, and has been dropping steadily for a while. That's down from a high of H$77. So much for the hype. The trailer has some laughs, but there's always a danger that those are the only laughs in the movie. The strike price is H$25, which is just flat-out absurd. The call is H$1.09, but that's down from a high of H$3.95. Which means that, in the last week, someone thot that this was going to do $30 million this weekend, while the stock was predicting a $20 million opening weekend. Somebody is going to lose money there. The put is H$4.73, and even that might be a bargain. Rottentomatoes.com has it at 36%, and the positive reviews read like they are straining not to be too harsh. I think this movie will be lucky to do $15 million, let alone $20 million. I am shorting the call, because there is basically zero potential for any surprises on the upside.

Stock: Short

Call: Short

Put: Long

Update Monday night: $30 million wasn't optimistic for PROSL, it was on the wasn't optimistic enough. A $34 million opening weekend will win any girl's heart, and any guy's. Way to go, Ms. Bullock, and welcome to the A list, Mr. Reynolds. Or at least the B+ list!

I was a little too pessimistic for Jack Black and Michael Cera, who managed to open just slightly above the halted price, so YEAR1 moved up a bit on the adjust. It cleared $20 million. So I was a little wrong on that one, but right about everything else. 5 out of 6 ain't bad.

Technical note: HSX launches v4 on Wednesday, which should be exciting. Hopefully this time they will get it right.

Obama takes a small step on gay rights

President Obama today signed an executive order extending some federal benefits to domestic partners of federal employees. It's a small step, but Obama made a point of announcing it himself, to highlight his continued commitment to the cause of gay rights. Good call on his part, as lots of gay rights activists are not happy with him right now.

Unfortunately for those activists, Obama cannot repeal DOMA by himself. There are still something like 40 states that ban gay marriage. There are still a number of moderate Democrats who really, really do not want to vote on this issue, because it might cost them their jobs.

The genius of a move like this is that it actually does some good, but doesn't really give the right enough to take him on. It's a bureaucratic thing, and it won't be noticed by many people. A few more of these, and all of a sudden you're talking about real change.