Since Kuwait's $90 billion unofficial stock market crashed several months ago, the fountains in front of its offices have ceased to play and many lights are off because of lack of activity.

There are signs of life, however, in a nearby building. Prominent members of the Kuwaiti business community gathered for a board meeting of a brokerage company that deals on the better-regulated official exchange.

"Look, prices are up. The worst is over," said one of the board members, pointing to numbers on his video terminal showing a slight pickup of share prices for banking, real estate and investment companies.

Similar expressions of cautious optimism are emerging after months of gloom, but most businessmen say that a recovery will be a long time in coming and will involve heavy losses for some companies and bankrupticies of others. The government and financial community are trying to sort out the collapse of the parallel market after a frenzy of trading in shares of companies that often existed only on paper.

The group that stands the most to lose is the "gang of eight," mostly stockbrokers but including a deputy of the National Assembly. They were the most heavily involved in the speculative spree and hold the bulk of the checks -- many dated a year or more in advance -- that fueled it.

A travel ban has been imposed on the worst offenders, and many rich Kuwaitis are keeping a low profile.

"You don't see a lot of Rolls Royces out on the streets right now," one Kuwaiti businessman said.

Ever since the government announced its program for supporting the economic system in September, many outsiders have been confident that major Kuwaiti financial institutions would survive the stock market crash. Banking sources contend that the six commercial banks and three leading investment companies commonly known as "the three Ks" never were bitten by the speculative bug.

"If you look at the biggest names involved in the Souk Mankh the name for the unofficial market , they were not getting advances from the banks. They were merely exchanging paper among themselves," insisted the chairman of one of Kuwait's largest banks.

Mixed signals in the late summer from various ministries and business groups, as well as from the National Assembly, made it unclear how the nation would seek the path to recovery. But now all appear to be speaking with one voice, with the Finance Ministry taking the lead.

"The permanent damage has been done on the intangibles, not the tangibles," explained one bank economist in Kuwait. "It's not like a war. The buildings are still here. The oil is still here. We're living in the same environment. What we have lost is confidence."

The loss of confidence appears to extend to the government, where National Assembly deputies have blamed the commerce minister and others for not acting quickly enough to forestall the crisis. But the government also has taken measures to prop up the economy by depositing funds with the commercial banks to bring down interest rates, which had been soaring at 15-16 percent, and by instructing two of the partly government-owned Kuwaiti investment companies to buy into the official stock market to establish a floor price.

Finance Minister Abdel Latif Hamad expresses confidence that these moves were instrumental in the official market staging a modest rally. The funds, say diplomatic sources, came from Kuwait's investment income, which this year will probably reach $8 billion to $9 billion -- slightly more than its oil income.

The government also has promised support for smaller investors -- those with less than 2 million Kuwaiti dinars, or about $6 million, involved in the crash -- by setting up a fund of 500 million Kuwaiti dinars.

But Finance Minister Hamad has said that it is not the business of the government to bail out individuals who have lost their fortunes, and government officials are taking a tough stand against rescuing middle-level or large investors.

At the same time, the government has been careful to steer clear of intervening in "purely commercial transactions" that government officials fear could establish a "dangerous precedent." They have enlisted top business leaders to unravel many of the most complicated problems -- the biggest of which is the postdated check.

When checks began to be presented at commercial banks before their maturity date late this summer, one of the first steps the government took was to require all to be registered with a clearing house. When the tally was in, the total figure of $91 billion shocked even bankers in Bahrain, who had been warning of the impending collapse for a long time.

But the value of the checks appeared to be just as inflated as the stock market, which in its heyday was recording share jumps of 100-300 percent at a clip. "There were some companies that were capitalized on paper more than British Petroleum," remarked one stockbroker. "It was a balloon market," said a Kuwaiti banker.

Individual check holders already have started deflating that balloon by discounting the checks among themselves. Already, business and government leaders say that the total value of the checks has declined to less than $25 billion.

"The winners will win less and the losers lose less," explained one Kuwait businessman.

The complications of bringing together about 6,200 individuals holding checks maturing anywhere from one month to a year have proved monumental. The Chamber of Commerce currently is making a bid to referee the process by asking check holders to sign up for an overall formula for settling the accounts. The chamber believes that investors otherwise will be scrambling around for the solution that best fits their situation.

"The lucky ones were the ones who got out in the middle of the game and invested in real assets," says a Kuwaiti economist.

Despite the fact that the government has stood by its position against bailing out most Kuwaitis who have lost on the market, there is a prevailing wait-and-see attitude among businesses expecting more moves will be taken by the government that could alter their positions. Government officials attribute this business slowdown to the general business climate in the Persian Gulf, with the prolonged Iranian-Iraqi war cutting off lucrative trade with both states and declining oil revenues reducing government spending.

"Nothing is moving," says the head of one of Kuwait's largest companies. Moreover, Kuwaiti bond dealers say that they do not expect a reissue of the Kuwaiti dinar bond, which was one of the signs of Kuwait's emerging role in international financial markets, at least until the second quarter of next year because of the uncertainty prevailing in the economy.

There is also great debate over just what to do with the Souk Mankh, which roughly means "camel park" because of its location on grounds that once served as a parking station for Bedouins arriving from the desert.

Some would like to do away with it altogether. "There's a lot of traffic congesting in that part of town. It might make a good car park," said one Kuwaiti banker.

Some government ministers are suggesting that the gulf companies that were traded on the unofficial market because they were registered outside of Kuwait should be invited into the official exchange if they can meet its tough criteria. But in a country where per capita income is one of the highest in the world and demand exceeds investment opportunities, many Western bankers fear that there always will be an environment for speculation.

"If you outlaw it in one place, it will just spring up in another," summed up a Western consultant.