Tuesday, October 17, 2006

Soft Landing here we come....

The Economy is ticking along at a moderate pace and inflation is on the decline. Fear of a recession has disapated and we are now looking at a sustained period of slower growth, low inflation and stable interest rates. This plays into the themes I have been writing about for some time. Positive carry trades !!!

Sure there will be mark to market issues but these are temporay. Just make sure you do not take a position that is to big (everyones definition of this will be different). You want to be able to survive the swings and still stay in the position. I particularly like "riding the curve" in Mexico. Sell rates in the 2year sector. Short Usd/Brl is still one of my favorites as is short Usd/Ars.

I am also getting bullish on the dollar although this is for a shorter time frame. I sold Euro today and will take this one day to day.



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