WSJ says futures exchanges expect consolidation

The WSJ had a nice article on the future of the futures exchanges. Now that most of them are public in the US (NYMEX on its way following General Atlantic deal), each of the players have a currency to make acquisitions. Of course the run up in stock prices means any buyer will have pay a hefty multiple in order to get the seller to bite. I liken it to the real estate bubble. Everything is fine when buyers see appreciation, but sooner or later, someone's going to be left holding the back and when they want to sell, there won't be buyers at high prices.

Well the WSJ article had some interesting points. For one, the consensus is that consolidation in the futures space would occur domestically. Second, a compelling case could be made for a stock exchange to buy one of the futures exchanges (think NASDAQ or NYSE). But third, the mother of all deals, is indeed, an "elephant hunt" for any banker trying to make it happen. The deal would be to combine the CBOT and CME. Could it happen? Rumors have been going for years that it could. But as the article states, "a merged CME-CBOT would not be good for the marketplace regardless of any deal between European exchanges, fearing that such a business would have a monopoly on trading such economically important assets as government-bond futures."