Paul Richards

IntercontinentalExchange: 'Growth Exchange Without the Multiple'

CME has a 98% share of US futures business, owns its own Clearinghouse and is diversified across product lines. It is also well- positioned in the arena of clearing the CDS products.

ICE has a 2% share of US futures business, is trying to get all of its clearing in-house, and is hardly diversified. It has partnered with the Henry Paulson gang: pajamasmedia.com/blog/...

for clearing of CDS, so no doubt that it will become the de-facto bucket-shop for the investment bankers as they try to keep the CDS market opaque.

Transparency is what is needed, especially now after the IB's created this mess that Washington calls the "Wall Street Bailout" seekingalpha.com/artic...


Transparency is the linchpin of CME's proposal.


ICE, currently sports a market-cap of $5 billion. CME, on the other hand, has a market cap of just $11.9 billion.

In my book, in relative value, either ICE is way overpriced, or CME is way underpriced - perhaps both? Otherwise, it is hard to justify these market caps in any logical manner.