Economy

The nation's biggest banks are regaining their health, but some need to replenish their coffers to withstand any new difficulties, the government said in an upbeat report Thursday. The Federal Reserve's highly anticipated "stress tests" found that 10 of the 19 largest banks needed to bolster their capital by a combined $75 billion. Most of that must be raised by two banks with a large California presence -- Bank of America Corp. and Wells Fargo & Co.

Transfixed by the daily spectacle of dismal economic news and wild Wall Street swings, few Americans have looked up to see what a wide array of economists say lies beyond the immediate crisis. And with good reason: The picture isn't pretty. The sleek racing machine that was the U.S. economy is unlikely to return any time soon despite the huge repair efforts now underway. Instead, it probably will continue to sputter and threaten to stall for years to come.

When China releases its third-quarter gross domestic product figures Thursday, it's likely to post growth that's the envy of a recession-weary globe. Some analysts project the world's third-largest economy will easily surpass the government's 8% expansion target. China's exports are rebounding. Tens of thousands of laid-off workers are being rehired. Stocks and real estate have been on a tear. Though economists credit Beijing's policies for carrying the country through the worst of the global crisis, some question the sustainability of the recovery.

Drive through California's sprawling inland suburbs and you'll spot the familiar mileposts of a real estate bust: foreclosure signs, brown lawns and abandoned subdivisions. To see the damage in downtown San Diego, walk a few blocks. Then look straight up. There you'll see hundreds of unsold luxury condominiums stacked in vacant high-rises. Some units downtown are now selling for less than half what earlier buyers had paid during the market peak.

The nation's new intelligence chief warned Thursday that the global economic crisis is the most serious security peril facing the United States, threatening to topple governments, trigger waves of refugees and undermine the ability of America's allies to help in Afghanistan and elsewhere. The economic collapse "already looms as the most serious one in decades, if not in centuries," said Dennis C.

Among heaps of antiques, collectibles and vintage clothing, frugal shoppers are rediscovering a recession-friendly place where prices are low and haggling is welcome. In growing numbers since the recession began 18 months ago, they are heading to one of about 135 flea markets and swap meets in California, including those at the Rose Bowl and in Long Beach and San Bernardino.

Two decades ago, real estate mogul Randy Black turned this blip on the Arizona border into a boomtown when he opened the first of four casinos. Nearly 1 million visitors a year followed, and hotels, restaurants and stucco homes seemed to sprout from sand. "It seemed to be one of those things that 'Geez, it's just going great. It's never going to end,' " said Victor Kotalion, who left Las Vegas in 1990 for this arid patch off Interstate 15.

Business journalists have been straining for months to describe the economy. Some have it "struggling" or "staggering." They've labeled the downturn a "crisis" and a "meltdown." Others have reached for metaphors -- "off the rails" or "in a ditch." That might have felt like strong stuff, but it pales in comparison to the alarms sounded by Paul Krugman, the New York Times columnist who topped himself Sunday. "Let's not mince words," Krugman declared.

The airwaves are getting more grown-up, and it's not just the shows. The Absolut Vodka commercials that aired in Los Angeles and 14 other cities during Sunday night's Grammy Awards marked the first time in years that liquor ads ran in prime time on network-owned stations. Also crowding the airwaves during heavy viewing hours are infomercials once reserved for the middle of the night and ads touting extramarital affairs and the intimate uses of K-Y Jelly.

After he was laid off last fall from his job driving a delivery truck, Ricardo Lara couldn't find another full-time position that would pay the bills. So he went into business for himself driving an ice cream truck. At first, he was making as much money peddling Heath bars, Bomb Pops and ice cream sandwiches as he did at his old job. But that didn't last. As the economy melted down, so did sales, despite his seven-day workweek plying the streets of South Los Angeles.