Pornography and the Bear Market

By: Robert Folsom & Wayne Gorman | Thu, Sep 2, 2004
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Popularity is a spectacle that comes and goes, and sometimes the explanation "why" can be more interesting than the trend or person who came & went.

Unless, of course, you're talking about a trend that's hot, and the trend in question is pornography. Then you're faced with the guy who says, "Let's skip the analysis and cut to the chase" -- or, in this case, to the images.

Alas, we're writers, so don't expect visuals. This topic has no shortage of visuals anyway, least of all in the medium you're reading now. But you probably knew that, so allow us to preview the "why" behind the trend: The explosion of sexually explicit fare is directly related to the bear market in stocks that began in early 2000.

Humor us and read on. You may end up ... well, "seeing" pornography in a whole new way.


The Penthouse Boutique opened this year in Milford, Connecticut. Unlike the dingy, small, broken-down buildings that house other local pornography shops, the Penthouse Boutique is large, audacious and well lit. Its opening saddled Milford with the unenviable reputation as the "suburban symbol of smut in southern Connecticut."

Some residents in the small conservative town protested and smashed the nude sculptures that stood outside the store, but that did little apparent harm to the brisk trade going on inside.

The New York Times picked up on the trend a year ago (August 4, 2003), with the Penthouse Boutique as an example:

"Offering a ladies' night and marketing itself as a fun place for happy couples to shop, the store is part of a trend that has been spreading in suburbs from Louisville to Los Angeles in an attempt to take the industry out of the shadows and make it mainstream."

A "ladies' night" and a "fun place for happy couples" indeed, but that ain't half the story when it comes to how deeply porn has penetrated the "mainstream." Consider:

So, we have porn on screen, stage, TV (cable and network), DVDs, and in magazines, advertising, fashion, music, travel, business ... did we forget anything that defines popular culture? Oh, right -- we left out the Internet.

The Web filtering company N2H2 maintains a porn site database, which in 1999 totaled 129,189 porn sites; by 2003 the number had grown to 1.3 million.

What about a physical crossroads for pop culture? For that our nominee would be Broadway & 42nd Street. Yes, we realize that you may be thinking, "That's Times Square ... there's no porn there now ... they cleaned up the place."

We'll get to the "now" part below. First let's discuss "cleaned up," especially when.

Times Square's "crossroads" status goes back more than a century, but only in the 1970s did it become a haven for massage parlors, live sex on stage, porn shops, X-rated movies and peep shows. (See A Brief History of Adult Entertainment in Times Square.)

What else was going on in the 1970s? Well, just a few subway stops south of Times Square, the neighborhood known as Wall Street had problems of its own: Namely the deepest bear market since the Great Depression. The S&P 500 began and ended the 1970s at nearly the same price level.

The early 1980s saw the start of a major bull market in stocks. And guess when local government in New York began a concerted effort to reduce pornography in Times Square: In those same early 1980s, via the Urban Development Corporation's "42nd Street Development Project."

By June 1993, there were some 36 "adult use establishments" in the Times Square area, a huge reduction from the estimated high of 140 during the late 1970s. By 1999 -- the last full year of the 1980s-1990s bull market -- visitors could stroll through the intersection of Broadway and 42nd Street without seeing a single "adult" storefront.

But in 2000, 2001, and 2002, the stock market suffered its first consecutive three-year decline in many decades. And last year’s rally notwithstanding, most stock averages remain well below their all-time highs. So in August 2003, whose three-story tall image do you suppose appeared in Times Square?

None other than the barely-dressed porn queen herself, Jenna Jameson, on a billboard that asks:

"Who Says They Cleaned Up Times Square?"

A few weeks later, Manhattan Supreme Court Justice Louis York ruled a local anti-adult entertainment zoning ordinance "unconstitutional." This could open the way to strip joints in the heart of Times Square again.

Ms. Jameson’s web site and Vivid Entertainment co-leased the Times Square billboard, and her image remains there more than a year later.

The newest inroad for the porn trend? Look no further than your local bookseller, perhaps among the prominent displays right at the entrance:

"A wave of confessionals and self-help guides written by current or former stars of pornographic films is flooding bookstores this year, accompanied by erotic novels, racy sexual-instruction guides, histories of sexual particulars and photographic treatments of the world of pornography."

This latest article from The New York Times (August 24) goes on to observe that while many bookstores have long carried titles under "erotica," "rarely have those books been as prominently positioned as some of the current crop, which have been elbowing their way onto display tables at the front of the major chain bookstores."

And while Underneath It All, the autobiography of former underage porn actress Traci Lords, made the Times' Best Seller List 2003, the ubiquitous Ms. Jameson has again pulled off the most complete cross-over into mainstream culture with her memoir, "How to Make Love Like a Porn Star: A Cautionary Tale." The book broke onto the Times' latest Hardcover Nonfiction Best Seller list at no. 9.

In a broadcast interview on the Fox News Channel (Aug. 29), Ms. Jameson said "The most frequent question I get is, 'How can I become a porn star?'"

Where will the trend go from here? Extreme behavior tends to mark the end of a trend, as popular culture goes places it's never been before. During the bear market and depression in the 1930s, for example, Henry Miller wrote the infamous "Tropic of Cancer," a book that stunned readers with its profanity and explicit content. It doesn't have the same shock value today, but back then no one had ever read anything like it.

The best-selling British writer Martin Amis gave an explicit description of how utterly perverse and violent the porn business has become, in his essay "Rough Trade." It's hard to read; Amis doesn't make it sound as though things will get better anytime soon for the "hard-grafting, ill-paid fraternity" of porn performers.

Last year's rally in the stock market didn't slowed the spread of pornography into mainstream culture, a very bad sign indeed; clearly the trend has accelerated in 2004. It indicates that porn reflects the deeper negative social mood, and that this mood isn't close to being exhausted.

All one person can do is recognize porn for what it is, and get out of the way. There are better ways to spend your time -- like making your finances safe as this same negative mood continues to manifest itself through declining stock prices.


Robert Folsom

Author: Robert Folsom

Robert Folsom
Elliott Wave International

Robert Folsom is a financial writer and editor for Elliott Wave International, a financial analysis company. He has covered politics, popular culture, economics and the financial markets for 19 years, and today writes EWI's popular Market Watch column. Robert earned his degree in political science from Columbia University in 1985.

Copyright © 2004-2011 Elliott Wave International

Wayne Gorman

Author: Wayne Gorman

Wayne Gorman
Elliott Wave International

Wayne Gorman is a graduate of Rutgers University and Columbia Business School and has served as treasurer in international banking and finance. In his current role as socionomist, he now generates research and analysis for The Socionomics Institute and Elliott Wave International.

Copyright © 2004 Elliott Wave International

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