The electronic efficiency of Chicago Merc’s Globex and the diversity of products from CBOT create fireworks in futures
Sophia Higgins
Oct. 17, 2006

Chicago Mercantile exchange is buying CBOT for $8 Billion. But what is really interesting is the net effect of the merger. The futures traders are jubilant as ever. The electronic efficiency of Chicago Merc’s Globex and the diversity of products from CBOT has created fireworks in futures trading.

The fast execution, twenty-four hour trading if futures and other derivatives is creating a level of efficiency never seen before in the futures market. The arbitraging will be intensive. The smart and savvy players will gain a lot.

The basket trading will also gain. The current trend in ETF trading clearly shows the net effects.

The electronic efficiency of Chicago Merc’s Globex and the diversity of products from CBOT create fireworks in futures
Sophia Higgins
Chicago Mercantile exchange is buying CBOT for $8 Billion. But what is really interesting is the net effect of the merger.
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US is adding a person every eleven seconds, an immigrant every 31 seconds, the population is at 300 million – real estate boom?
Paula Zubeda
After this slump is housing, the real estate market will start booming again. The demographic distribution over time says, the big move upwards is actually infront of us not behind us.
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As Fed plans to raise interest rates three more times in 2007 starting March, long bonds can falter and dollar can rally but what about stocks with extremely inverted yield curve?
John Huang
In 2007, starting March, Fed will most likely raise rates three times. The long bond yield though will be capped at 5.2% yield.
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Net Foreign Purchases came at $116.8 Billion while the market was expecting $50.0 Billion – how does it affect Dollar?
Alan Hershey
The core PPI of 0.6% and relatively strong capacity utilization of 81.9% should make Fed think several times before taking any action on lowering rates. The European Central Bank’s recent approach to pause is also remarkable.
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The industrial production slippage of 0.6% contradicts NY Empire State Index of 22.9 –how will stocks, bonds, gold and dollar behave?
Marla Guthrie
Stocks though can falter because stock market is normally ahead of the curve and is predicting what will happen six months later.
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Chicago Mercantile Exchange buys CBOT for $8 billion– it can be a very bad sign for the economy and stocks
Peter Oberois
Another model that tracks smart money flow shows interesting results. Samrt money is buying very long term puts on the stocks.
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A lower capacity utilization of 81.9% can bullish for bonds but it confirms stagflation
Fred Day
The net effect is that Fed cannot lower the rates while economy needs the rates to go down. The effect can be devastating for stocks. Bond and dollar probably will gain from the effect.
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Producer Price Index fell amazing 1.3% while core PPI shot up 0.6% - what does that mean for economy, dollar, bonds and stocks?
Sam Adelton
Again and again the central banks have failed to fight stagflation. They overshoot chasing the inflation and cause eventual depression in the economy. Stagflations when fought with fiscal means end up in deflation and depression.
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