The Crash: Panic Grips The Globe

A crisis spotlights Washington's failures

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What if the negotiations break down and the market gets the opposite signal: that the U.S. is unable or unwilling even to start working out some long-range solution to its gargantuan budget and trade deficits? As last week's wild price whipsawing demonstrated, no one can predict stock prices and volume for even a few hours. But if the U.S. continues to float on a sea of red ink and foreign debt -- well then, many financial experts suggest, sooner or later the markets can expect the real crash. How it could be much worse than Black Monday is as difficult to imagine as was Black Monday itself just days before. But the world had better hope it never finds out what that ultimate bust would be like.


CREDIT: TIME Chart by Cynthia Davis


Dow Jones industrials, daily closings

DESCRIPTION: Color illustration: Uncle Sam lying down on sharp peaks showing U.S. Prime Rate, U.S. Dollar, Trade Deficit and Budget Deficit, 1980-1987 and being stabbed by graph showing Dow Jones' ups and downs through the week of the 1987 crash.

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