An expert who called the crisis in 2008 states that repetition of the December breakdown is inevitable

The edge of your seat or under your seat can both be great places to watch the US trade talk show on Thursday.

It is judged by the flow of conflicting news reports that have whipped markets around, such as a report that said the Chinese would bail early and briefly wipe 300 points of Dow futures late Wednesday. Wall Street looks like it is heading towards a weaker opening, with many investors undoubtedly ready to stick to what promises to be a news-heavy few days ahead.

And then the revenue season starts next week with some big banks. Before you know it, we'll hit the holiday season and maybe some uneasy flashbacks to last year's stock meltdown in December.

A repetition of that routine may be inevitable, warns our conversation about from former Goldman Sachs alum Raoul Pal. "We are entering a period of stock liquidity," the author of the global macro investor newsletter, followed by the world's largest hedge fund, told MarketWatch in a recent interview.

He cites three reasons why a repetition of stock sales may be inevitable. The first is the blackout period for companies, which hit around the earning time as their share buybacks begin to decline. Second, he notes that this year too, there have been problems with the short-term loan market, or the repo market, which the Federal Reserve has been trying to cope with. This could mean smaller purchases from market players ̵[ads1]1; helping to create liquidity for the markets by bringing buyers and sellers together.

Pal states that the third largest issue stocks face involves baby boomers, Americans born between the mid-1940s and the mid-1960s. They have an annual requirement to sell about 5% of their individual retirement accounts, filled with shares in some cases, when they reach 70.5 years of age.

“The problem is the gap between this year and last year is huge. That's like a 50% increase in sales volume that needs to be done, Pal says. “They have to start selling by the end of the year. If you take out the Christmas week and you are a financial advisor and you want to do this early, you will start in October. "

He blames the bomber who sells part of the stock crash late last year. "The marginal change of an American baby boomer who thinks & # 39; I have too much stock & # 39; which they have – it's catastrophic for the system because they have too much risk," said Pal, co-founder of Real Vision Finance tv.



YM00, -0.16%


ES00, -0.13%

and Nasdaq

NQ00, -0.13%

future drifts lower after jumping around conflicting trade progress reports. Oil


is down, gold

GCZ19, -0.32%

is flat and the dollar

DXY, -0.33%


Europe shares

SXXP, -0.28%

are mixed. Asia markets

ADOW, + 0.08%

rebound to mostly finish higher.

The chart

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

VOO, + 0.93%

shows an outflow of $ 2.9 billion at the beginning of this week, marking the largest withdrawal over the last 10 months, notes Naeem Aslam, chief market analyst at ThinkMarkets: [19659023] He adds that it is the second largest withdrawal since the fund's inception in September 2010:

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

SPY, + 0.95%

and iShares Core S&P 500 ETF

IVV, + 0.95% .

Read: The Securities Exchange Commission rejects another Bitcoin ETF proposal

The buzz


AAPL, + 1.17%

pulled an app that allowed Hong Kong protesters to track police, a day after being heavily criticized by a Chinese government newspaper.

Opinion: Professional investors sell stocks as international risks pile up

Oxfam report finds workers overworked and poorly treated at a sweet potato farm supplying Amazon

AMZN, + 0.97%

Whole Foods, which says it is not an accurate reflection.

Senate Majority Leader Mitch McConnell, a longtime opponent of marijuana law reform, expected to spend two days meeting with industry leaders, MarketWatch sources said.

Blackout, traffic jam and rush to buy flashlights over Northern California like Pacific Gas & Power

PCG, + 0.73%

cuts the power of a million people.

Recent data on unemployment claims and consumer prices largely met expectations.

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