Finances

When insurance giant American International Group Inc. imploded last fall, the firm's problems were quickly blamed not on its core insurance business but on an obscure operation that traded exotic mortgage securities. But as the economic crisis deepens, it has become clear that AIG's problems extend across most of its business lines, including its massive life insurance and retirement services operations, which reported a staggering $18-billion quarterly loss this month.

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.

The contracts were flying out of AIG Financial Products. Hardly anyone outside Wall Street had ever heard of credit-default swaps, but by early 2005 investment banks were snapping them up to insure all kinds of deals in case of default, fueling one of the great financial booms in U.S. history. During twice-monthly conference calls that originated from the company's headquarters in Wilton, Conn.

More Californians are failing to make their mortgage payments than at any time in the last 20 years, but fewer of them are losing their homes, according to new figures. The drop in foreclosures follows moratoriums adopted by major banks and mortgage giants Fannie Mae and Freddie Mac. The increase in loan defaults, meanwhile, suggests that rising unemployment and the continuing recession are still claiming fresh victims.

Brotman Medical Center in Culver City, with the help of the Jewish Home for the Aging, emerged from bankruptcy protection Tuesday in a way that may result in a new senior living facility on the Westside. The 420-bed hospital said it returned to profitability after securing $29 million in financing, including $23 million in loans from the Jewish home.

Lloyd Charton recalls a fateful knock on the door. At his Dana Point home stood a cheerful man with an impressive knowledge of Charton's personal life. It was a neighbor, Dan J. Harkey. Harkey congratulated him on his retirement and asked about a recent vacation. He told him about his company, Point Center Financial Inc., which raised money from private investors and lent it to real estate developers.

The firestorm over American International Group is spreading beyond executive bonuses, with lawmakers and policy experts now questioning virtually all aspects of the taxpayer-financed rescue package for the insurance giant. Among other issues, critics are asking why AIG was allowed to use federal bailout money to repay $13 billion in debt obligations to Wall Street powerhouse Goldman Sachs, as well as debts to foreign banks.

The amount of U.S. money spent on the Iraq war will surpass the cost of Vietnam by the end of the year, making it the second most expensive military conflict in American history, behind World War II, according to Pentagon figures provided Friday. If Congress approves the supplemental funding request submitted this week by the Obama administration, the cost of the war will rise by $87 billion for 2009, including a previous supplement approved during the Bush administration.

Frozen capital markets are putting the chill on a fast-growing California solar company, a sign that the economic downturn is being felt even in the state's thriving renewable-energy sector. Hayward-based OptiSolar Inc. confirmed Monday that it dismissed nearly half its 600-member workforce last week, cutting 185 jobs at its Hayward facility and 105 at a plant in Sacramento.

After a decade, adult-film star Alexis Amore is looking to remove the Playboy bunny tattoo below her belly button. She also wants to get rid of a crown and the letter "a" on her wrists. "I got them when I was really young," said the petite 30-year-old. "I'm a little bit older and a little bit wiser now. And it's not very classy to have tattoos on your wrists and stomach." Amore, who goes by her stage name, is in the months-long process of getting rid of her ink at the Dr.