Combine 1 cup sugar and water in a 2 qt saucepan. Stir ove high heat until the sugar is dissolved. The mixture will bubble and evaporate for around 5 minute - you do not have to stir at this time. The syrup will slowly begin to change color. When it does, stir quickly untili it is all deep honey color. Now quickly remove from heat and put into a cold 2 quart baking dish.
To make the pudidng mixture: Place eggs in large mixing bowl. Add sugar, nutmeg, vanilla and beat until well blended. Pour milk into a 2-3 qt saucepan, add the cinnamon sticks. Heat over medium heat until scaled. Do not boil. Strain milk after it scaled. Combine with egg mixture slowly as not to cook eggs; reserve.
Break the bread into 5-6 pieces. Place a layer of bread on top of the hardened caramel. Sprinkle with 1/3 of the nuts and raisins. Add milk and pudding mixture. Repeat the procedure until all the milk and bread are used. The bread will float, so submerge it carefully with something flat and heavy for at least 10 mins before placing it in the oven.
Place this on a baking sheet containing 1 inch of water and bake uncovered at 325 degrees for 70 min or until an inserted knife comes out clean.
Now I like to serve this slightly cooled with hot caramel running down but the recipe called for it to be refrigerated for several hours or over night. Then use a straight knife to release the pudding from the sides of the baking dish in an up and down motion. Invert on a plate and has a lip so the caramel will not run off the plate. Slice and server.