* China stocks lead correction in global equities
* Buffet warns Washington over "monetary medicine"
* Futures down: S&P 8.3 pts, Dow 67 pts, Nasdaq 15 pts
NEW YORK, Aug 19 (Reuters) - U.S. stock index futures dropped about 1 percent on Wednesday as a fall in Chinese shares prompted renewed selling in global equity markets on fears stock prices have a run too far ahead of the economic reality.
* China shares slid 4.3 percent, led by recently listed stocks, as nervous investors bailed out on worries the 20 percent slide in just two weeks would deepen, shrugging off official efforts to talk up the market.
* The wave of selling in global equity markets was similar to Monday's a sell-off when markets took their cue from trading in Asia, with investors concerned the economic recovery would be slow.
* Adding to the gloom, billionaire investor Warren Buffet, who runs insurance and investment company Berkshire Hathaway Inc, warned that although the United States was on the road to recovery, public debt was becoming unsustainable after government measures to stimulate the economy, which he termed "monetary medicine".
* "China certainly is the big story again today, its been an ongoing trend," said Arthur Hogan, chief market analyst at Jefferies & Co in New York. "It's a similar story to what we've seen - we come in and Asian markets are down, and it flows through the European markets and hits our shores."
* "In general it's a reset of valuations in China to match current realities in terms of the global economy," he said. "Unfortunately while that's happening the rest of the world's going to follow suit."
* Some analysts are predicting that U.S. equity market will undergo a similar correction to that in China after the broad S&P 500 rallied nearly 50 percent from March lows.
* In Tokyo, the Nikkei stock average lost 0.8 percent and hit a three-week closing low, while European stocks as measured by the FTSE Eurofirst 300 fell 1.2 percent
* S&P 500 futures fell 8.3 points, and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 67 points, and Nasdaq 100 futures fell 17.50 points.
* In another sign that the recovery may be slow, Hewlett-Packard Co, which reported slightly better-than-expected quarterly results after the bell on Tuesday, expressed caution about business demand, sending its shares down 2 percent in extended trade.
* In one bright spot, shares of Deere & Co rose 2.5 percent to $46.20 before the bell after the manufacturer of agricultural equipment reported third-quarter earnings far above Wall Street's consensus.
* The day's other earnings include quarterly results from Limited Brands Inc and Network Appliance Inc.
* U.S. shares gained ground on Tuesday, rebounding after sharp losses in the previous session, as stronger-than-expected results from big retailers eclipsed an unexpected drop in housing starts and permits in July.