Sunday, July 29, 2007

The week ahead: Traders, Brokers Hoping for Increased Panic and Volume on Subprime Worries

"We can make a killing when we know the panic has set in." say top wall street institutional traders. That's because the lifeblood of traders is volatility, whether it's up or down.

There's lots of money to be made short selling stocks as they plummet in a panic inspired free fall. And the increased volume can bring bigger commissions into the brokerage houses as well. "The average investor will exit for a while, but they'll be back when they see the DOW up 500 or 1000 points in 5 months - or whenever they get bored of 5.05% money market returns." said one savvy trader. "We usually have a nice rally around Christmas when the fund managers are trying to make year end bonuses, they'll be back by then."

"What we are all hoping for in the next few weeks, is that joe public looks in the mirror, blinks, and runs screaming from previously well thought out asset allocation decisions. We all know that people love to dump good stocks and funds indiscriminately when panic sets in, and that's what we are hoping for. It gives us an opportunity to make money on the way down - or snap up some bargains for our personal 401k plans."

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