Confusion - But Hope

Uncertainty. Volatility. Confusion. Those have become the watchwords of the postcrash economy. For weeks some prognosticators have warned that the stock collapse of Black Monday presaged a recession. Others have argued just as vehemently that the crash was primarily a Wall Street event that will have little impact on the economy. No wonder consumers have been cautious and bewildered and the financial markets have swung wildly between hope and despair.

Last week's upheavals only made the economic outlook fuzzier. One of the strongest stock rallies since the crash suddenly fizzled when the Government announced that the U.S. trade deficit had hit...