Fast Money: What is the biggest threat to the recovery?
Roubini: The debt ratios of banks and (individuals) are very high; (Individuals) have barely started saving. So what we’ve done is socialize these private losses and now we have a massive releveraging of the public sector with large and unsustainable budget deficits.
(The deficits) are leading to accumulation of public debt - over $10 trillion over next 10 years. (That massive amount) of debt may lead to another crisis.
Fast Money Insisghts
I agree that we see bank failures going forward, says Guy Adami. And if that happens I expect it could spook the market. I also think the market has seen its high for a while.
If you agree with Roubini I’d get long gold , counsels Joe Terranova.
What do you think? We want to know!
Roubini: China Is Not Big Enough To Drive Worldwide Economic Recovery
Fast Money: Can China lead the world out of recession?
Roubini: I don’t believe China can be the main locomotive of global growth – China GDP is only $3 trillion – the US is $15 trillion. Chinese total consumption is $1 trillion – the US is $10 trillion.
So China is too small to be the main locomotive of engine of global growth, and there are excesses right now in China – like froth in the real estate and the stock market. And there is now the beginning of a correction. And if there was a sharp slowdown in China, that’s going to be again negative for the global economy.
Fast Money Insights
I agree with what Roubini is saying, reveals Tim Seymour. China alone can not do it. But also, I would not underestimate the strength of emerging markets.
I don’t think we’re looking for China to be the locomotive, adds Pete Najarian. We’re just looking for a little push.
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Trader disclosure: On Sept. 1, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (APPL), (BAC), (F), (SBUX); Seymour's Firm Is Short (FXI), (PBR), (RIMM); Terranova Owns (AMZN), (SU), (WFT); Terranova Is Short (SHLD), (TM); Terranova Owns (GS) Puts; Terranova Owns Dec. Gold Futures; Terranova Works For (VRTS); Najarian Owns (BAC) & Short (BAC) Calls; Najarian Owns (BUCY) & Short (BUCY) Calls; Najarian owns (C) Calls; Najarian Owns (HGSI) Call Spread; Najarian Owns (FCX) Call Spread; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (PALM) Calls; Najarian Owns (TEVA) Calls; Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFc) Put Spread; Najarian Owns (YHOO) Call Spread ; Najarian Owns (MOS) Calls
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