May 4, 1992

The Kuwaiti Government is in the middle of a seemingly unrestrained multibillion-dollar spending spree, raising fears among Kuwaiti economists and opposition figures that this once fabulously wealthy nation could end up in debt in just a few years. While much of the money is going to meet the huge expenses of the Persian Gulf war and rebuilding in the aftermath of the country's occupation by Iraq, billions of dollars are committed to programs that critics are calling unwise. For instance, the Government plans to bail out private Kuwaiti banks by assuming all their bad loans to Kuwaitis, many of whom are said to be well-connected billionaires and members of the ruling royal family who could easily repay.

California, already mired in a recession that was exposing jagged cracks in its Golden State facade, now faces an even bleaker economic future. The violence, looting and arson that swept wide areas of the nation's second-largest city last week, killing at least 49 people and causing hundreds of millions of dollars of damage, destroyed thousands of small businesses. That disaster will cause the direct loss of more jobs and tax revenues from a state already enduring a hemorrhage of both, economists say.

For anyone remotely interested in dance, the Vaganova Ballet Academy is full of wonderful ghosts, some of them still alive. The academy, which dates back 257 years and has always been associated with the Kirov Ballet, counts among its graduates such legendary names as Anna Pavlova, Vaslav Nijinsky, George Balanchine, Galina Ulanova, Michel Fokine, Rudolf Nureyev, Natalia Makarova and Mikhail Baryshnikov. Today, the Vaganova (pronounced vuh-GAHN-uh-vuh), arguably the most famous ballet conservatory in the world, is carrying on. But like nearly every other institution in Russia, artistic and otherwise, it has been afflicted by the country's troubled transition from Communism to democracy and capitalism.

Bells tolled around the nation for the dead in Los Angeles, and Americans paused to hear pleas from the pulpit for racial harmony. Page B8. Mayor Dinkins met with New York students to hear them out and thank them for "not jumping on the train" to violence, as an aide put it. Page B1. While most of the dead in Los Angeles were black and Hispanic men, no race or sex was spared. A portrait of some of the dead, page B8.

When it comes to profiting from other people's problems, there's no place like Wall Street. And, in recent months, there has been no analyst like George Putnam when it comes to telling investors how to do it. Mr. Putnam's monthly investment publication, the Turnaround Letter, recommends the stocks and bonds of distressed companies that the markets may have undervalued, including enterprises in bankruptcy or with other troubles.