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Home / Business / Expert who called the 2008 Crisis Repeats of December Meltdown is inevitable

Expert who called the 2008 Crisis Repeats of December Meltdown is inevitable



The US-China trade talk shows getting under way Thursday.

Dow futures late Wednesday,. Wall Street looks like it's heading for a weaker open, with many investors no doubt ready to hang on to it.

And then earnings season kicks off next week with some big banks.

A repeat of that rout may be unavoidable, warns our call of the day from former Goldman Sachs alumnus Raoul Pal. "We're Coming into a Period of Illiquidity for Equities," the author of the Global Macro Investor Newsletter, followed by the World's Biggest Hedge Funds, told MarketWatch in a recent interview.

He cites three reasons why a repeat of that stock sell off may be inevitable. The first is the blackout period for companies, which hits back and forth. Secondly, he notes that this year has also seen problems with the short-term borrowing market, or repo market, that the Federal Reserve has been trying to tackle.

Pal says the third greatest issue faces the baby boomers, Americans born between the mid 1

940s and mid 1960s. They face an annual requirement to sell about 5% of their individual retirement accounts.

"The problem is the gap between this year and last year is huge. It's like 50% increase in the amount of selling that has been done, "said Pal. "They have to start selling by year-end. [Http://wwwyoutubecom/watch?v=rPG&tP=T&tP=T&tP=T&tP=&tP=1&topic_id=179&type=0&type=1&topic=1[http://wwwyoutubecom/watch?v=rMY&t=0&tree=en&target="http://wwwyoutubecom/watch?v=ZY&turntId=&tP="http://wwwyoutubecom/watch?v=ZY&turntId=ENG&q="http://wwwyoutubecom/watch?v=ZY&turntId=en&topic=en&target="http://wwwyoutubecom/watch?v=ZY&t"ThemarginalchangeofanAmericanbabyboomerthinking'I'vegottoomuchequities'whichtheyhave-that'scatastrophicforthesystembecausetheyhavewaywaytoomuchrisk"saysPalco-founderofRealvisionfinancialtelevision

The market

Dow

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     YM00, + 0.01%

S & P

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     ES00, + 0.03%

and Nasdaq

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     NQ00, + 0.06%

futures are drifting lower after bouncing around on conflicting reports of trade progress. Oil

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     US: CLV19

                            
                                  
      
      
      
      
      
      
      
                                         is down, gold

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     GCZ19, -0.74%

is flat, and the dollar

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     DXY, -0.28%

is tumbling.

Europe stocks

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     SXXP, -0.17%

are mixed. Asia markets

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     ADOW, + 0.03%

rebounded to mostly finish higher.

The chart

Our chart of the day shows investors headed for the sidelines in a big way ahead of US-China trade talks. Vanguard's S & P 500 exchange-traded fund

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     VOO, + 0.43%

shows at outflow of $ 2.9 billion at the start of this week, marks the biggest withdrawal in the past 10 months, notes Naeem Aslam, chief market analyst at ThinkMarkets:




He adds that that's the second-biggest withdrawal on record since the fund's inception in September 2010:




The Vanguard fund is the third most popular search fund behind the SPDR S & P 500 ETF Trust

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     SPY, + 0.41%

and the iShares Core S & P 500 ETF

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     IVV, + 0.45% .

                            
                                  
      
      
      
      
      
      
      
                                        

Read: Securities and Exchange Commission rejects another bitcoin ETF proposal

The buzz

Apple

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     AAPL, + 0.89%

Hong Kong protesters to track police, a day after being harshly criticized by a China state newspaper.

Opinion: Oxfam report finds workers overworked and poorly treated at a sweet potato farm that supplies Amazon's

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     AMZN, + 0.42%

Whole Foods, which says that's not accurate reflection.

Senate Majority Leader Mitch McConnell, a longtime opponent of reforming marijuana laws, expected to spend two days meeting with industry executives, sources tell MarketWatch.

Blackouts, Northern California as Pacific Gas & Power

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     PCG, -28.64%

cuts power for a million people.

Data with the latest on jobless claims and consumer prices mostly met expectations.

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