Re: Trade Idea Generation. the process of writing and thinking..LETS DO IT
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3) long 2yr, short 10yr. right now, as stated above, a rate cut is likely to push up yields for the 10yr (more inflationary expectations) while obviously pushing down yields for the 2yr. this isn't priced in sufficiently at this point.
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You're already missed some HUGE movement in the 2 yr. Though, I do like anything that deals with the steepening of the yield curve.
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4) short USD vs. JPY, Yuan, and asian emerging markets. this is a fairly straightforward trade. despite global imbalances starting to correct themselves, the falling off of demand for US treasuries by these countries combined with their ever growing CA surpluses and US interest rate direction spell tough times for the dollar vs. these countries (while the dollar might even be overpriced vs. the EURO at this piont)
5) on a similar note, the pound now looks expensive vs. the Yen and Yuan.
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Agree with both. See John Kane's Leverage thread.
I'd like to comment on #2 but I'm not familiar with those products.
I feel like this is an awesome time to be investing and really envy John for putting some $ to use and you (assuming you go through with some of these ;p). I don't have the capital yet to do anything other than feed my Roth and make a few option and/or bond plays.
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