The First Two Legs of This Generation's Trade

I have no doubt that the Fed will continue to work closely with Humungous Bank & Broker, particularly Lehman (LEH), Merrill (MER), Citi (C) and Wachovia (WB) as these banks leverage down, and recapitalize. I do anticipate further downside action, probably spikes like we saw in mid-March should there be a sudden credit market crisis. But, more likely the Fed is on top of it and what the market will see when short rates spike lower is that the Fed buys the garbage loan paper of these failing banks to support them.

That will send the USD lower and commodity prices higher, which ultimately will sink the equity market. Coming soon there will be a reversal in rates as the Fed will be forced to raise them to stem the explosion in food and energy costs, and that will cause the rising trend in bond prices to reverse. At the point of reversal, the first leg of the Trade of this Generation will occur, which is to sell bonds. The stronger USD will hammer down precious metals, for a time – quote me: “A Brief Time” – at the end of which, we will complete the second leg of the Trade of this Generation, which will be to buy Precious Metals and Metals.

Having set up a Forex Fund with my associates, I will next try to set up a Metals Fund. These offerings will be open only to Qualified Eligible Participants, the rules of which are strict. For the public, we are awaiting licensing that would permit Cara Trading Advisors to work with accounts held by a variety of banks and broker-dealers on a managed account basis in various countries. As long as the financial services firm is registered to trade in securities in the country of your residence and you hold an account with the firms we deal with, the rules are not strict. In essence, we, as your advisor, could be dismissed without notice. To date, we have signed an agreement with EFG Bank, and expect to sign with Interactive Brokers and CMC Markets and others soon.

This is a busy time.

Previously I commented that not everything is going well, and that is true, but will be resolved shortly. As someone has written, earning a good reputation is hard work and then you have a helluva burden keeping it. I just have to remove a few unnecessary weights, that’s all.

In addition to having an office/residence in Nassau, I am working on having one in Freeport Bahamas as well. Freeport, in fact, is likely to become my headquarters.

Comments

[buyitcheap]

I agree with the thesis - rates will have to come up in response to the grotesque explosion in commodities which will come down. And he's right, only for a time... would I love to see Platinum back at $900/toz. hopefully when this correction occurs there will be more ways(ETFs) to play the metals movements. Long UUP, short the 10 year and TLT