george magnus.wer, the economy slowing again after a nearly two year stabilization, the likelihood that brazil can look to the commodities sector for help is pretty low. the than 24 hours ago, chinese premier was talking about the fact that he sees upside for the chinese economy and iron-ore rocketed on the back of it. , he think premier was making a big speech, an acceptance speech. he could not talk the economy down. we are looking at a china in which the financial, or the regulatory windstorm, as they call it, is having a material effect on the growth of nontraditional forms of funding. there was a report out from the china banking regulatory commission that the volume of wealth products into bank products had the biggest drop 10 in 10 years. it is beginning to have an effect and it will have knock on effects through the second half of this year. tom: the chinese credit impulse is waiting. how will this affect the u.s.? >> i'm not sure it has a huge effect. at this juncture, i think it's plausibl

still with us is george magnus. watchers have been warning about the dead burden for years -- the debt burden for years. you say china is that is funded. china's debt is funded. mr. magnus: can it get much bigger? or what level does gdp become critical? these things don't basically spell crisis. particularly not in a state owned banking system where bad loans can be extended. it they can be evergreen. the accounting regulations can be very opaque. so that bad debt doesn't necessarily have to be recognized or accounted for. so on and so forth. if you think back to the crisis that we had in the u.s. and u.k. 2008,rope in 2007 and basically, what precipitated the crisis wasn't necessarily the debt stock itself, but the banks suddenly dried up. we had leverage structures that would put in place and we had asset structures that people owned that suddenly became liquid. and when people lost confidence, the banks went liquid when everybody started selling. the china situation is not the similar. it is subprime in 2006, but