One of the fathers of modern finance and a winner of this year's Nobel prize for economics said the bloated deficits of the United States and European nations may lead to a worldwide recession.
"There may come a point where the financial markets say none of their debt is credible anymore and they can't finance themselves," he said. "If there is another recession, it is going to be worldwide."
Fama, who is a professor at the University of Chicago, also played down the United States's stronger labor market data from last month.
"I am not reassured at all. The jobs recovery has been awful. The only reason the unemployment rate is seven percent, which is high by historical standards in the U.S., is that people gave up looking for jobs," he said. "I just don't think we have come out of (the recession) very well."