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The Federal Deposit Insurance Corp said the industry overall eked out a profit of $914 million for the quarter, benefiting from a healing economy, but said the improvement was concentrated in the largest banks.

FDIC Chairman Sheila Bair said the profit was a huge improvement over the $37.8 billion loss the industry reported in the fourth quarter of 2008. “It’s not that this was a strong quarter. It’s simply that everything was so bad a year ago,” Bair said in a statement.

Smaller institutions are still struggling with deteriorating loan portfolios, especially with loans tied to commercial real estate. The FDIC set aside an additional $17.8 billion during the fourth quarter for expected bank failures.

Those questions are now at the core of a constitutional clash between President Obama’s Justice Department and civil libertarians alarmed by what they see as the government’s relentless intrusion into the private lives of citizens. There are numerous other fronts in the privacy wars—about the content of e-mails, for instance, and access to bank records and credit-card transactions. The Feds now can quietly get all that information. But cell-phone tracking is among the more unsettling forms of government surveillance, conjuring up Orwellian images of Big Brother secretly following your movements through the small device in your pocket.

How many of the owners of the country’s 277 million cell phones even know that companies like AT&T, Verizon, and Sprint can track their devices in real time? Most “don’t have a clue,” says privacy advocate James X. Dempsey. The tracking is possible because either the phones have tiny GPS units inside or each phone call is routed through towers that can be used to pinpoint a phone’s location to areas as small as a city block. This capability to trace ever more precise cell-phone locations has been spurred by a Federal Communications Commission rule designed to help police and other emergency officers during 911 calls. But the FBI and other law-enforcement outfits have been obtaining more and more records of cell-phone locations—without notifying the targets or getting judicial warrants establishing “probable cause,” according to law-enforcement officials, court records, and telecommunication executives. (The Justice Department draws a distinction between cell-tower data and GPS information, according to a spokeswoman, and will often get warrants for the latter.)

It was the highest profile crackdown ever on the Turkish military, which has ousted four governments since 1960. For decades Turkey’s senior officers, self-appointed guardians of the country’s secular tradition, called the shots.

But the balance of power in this EU-candidate country appeared to have shifted Monday as police rounded up the 51 military commanders, following the gathering of wiretap evidence and discovery of an alleged secret coup plan, dubbed “the sledgehammer.”

The nationwide sweep has dramatically deepened a power struggle between the secular establishment and the government, which has strong electoral backing and the European Union’s support. Turkey’s elite military — known as “pashas,” a title of respect harking back to Ottoman times — were once deemed untouchable.

“The most heavy sledgehammer to military custody,” read banner headline of daily Taraf, which has published leaked military documents that lead to the detentions.

The English-language newspaper Today’s Zaman said Tuesday that the operation was launched after experts determined the leaked documents were authentic. The government denies the ongoing crackdown is politically motivated or designed to silence government critics, as is claimed by opposition parties.

The suspects included former Air Force chief Gen. Ibrahim Firtina and Navy Chief Adm. Ozden Ornek, who allegedly chronicled some failed coup attempts, as well ex-deputy chief Gen. Ergin Saygun — who had accompanied Prime Minister Recep Tayyip Erdogan during his 2007 meeting with former President George W. Bush in Washington.

Also detained were the former head of the Special Forces, Gen. Engin Alan, and the former head of the 1st Army, Gen. Cetin Dogan.

All of the suspects, including nearly two dozen retired and active duty generals and admirals, were expected after questioning to appear Tuesday in an Istanbul court that is hearing all coup plot allegations.

The bleak warning of social and financial meltdown, delivered today in Tokyo at a gathering of 700 pension and sovereign wealth fund managers.

Dr Faber, who advised his audience to pull out of American stocks one week before the 1987 crash and was among a handful who predicted the more recent financial crisis, vies with the Nouriel Roubini, the economist, as a rival claimant for the nickname Dr Doom.

Speaking today, Dr Faber said that investors, who control billions of dollars of assets, should start considering the effects of more disruptive events than mere market volatility.

“The next war will be a dirty war,” he told fund managers: “What are you going to do when your mobile phone gets shut down or the internet stops working or the city water supplies get poisoned?”

His investment advice, which was the first keynote speech of CLSA’s annual investment forum in Tokyo, included a suggestion that fund managers buy houses in the countryside because it was more likely that violence, biological attack and other acts of a “dirty war” would happen in cities.

He also said that they should consider holding part of their wealth in the form of precious metals “because they can be carried”.

One London-based hedge fund manager described Mr Faber’s address as “excellent, chilling stuff: good at putting you off lunch, but not something I can tell clients asking me about quarterly returns at the end of March”.

Dr Faber did offer a few more traditional investment tips, although their theme fitted his general mode of pessimism.

In Asia, particularly, he said, stock pickers should play on future food and water shortages by buying into companies with exposure to agriculture and water treatment technologies.

One of Dr Faber’s darker scenarios involves growing military tension between China and the United States over access to limited oil resources.

Today the US has a considerable advantage over China because it has free access to oceans on both coasts, and has potential energy suppliers to the north and south in Canada and Mexico.

It also commands an 11-strong fleet of aircraft carriers that could, if necessary, secure supply routes in a conflict situation.

China and emerging Asia, meanwhile, face the uncertainty of supplies that must travel from the Middle East through winding sea lanes and the Malacca bottleneck.

American military presence in Central Asia, Dr Faber said, may add to the level of concern in Beijing.

“When I tell people to prepare themselves for a dirty war, they ask me: “America against whom?” I tell them that for sure they will find someone.”

At the heart of Dr Faber’s argument is a fundamentally gloomy view on the US economy and its capacity to service a growing mountain of debt.

His belief, fund managers were told, is that the US is going to go bankrupt.

Under President Obama, he said, the country’s annual fiscal deficit will not drop below $1 trillion and could rise beyond that figure.

Arch bears have predicted that US debt repayments could hit 35 per cent of tax revenues within ten years.

You’ll generate your own electricity with the box and it’ll be wireless. The idea is to one day replace the big power plants and transmission line grid, the way the laptop moved in on the desktop and cell phones supplanted landlines.

It has a lot of smart people believing and buzzing, even though the company has been unusually secretive – until now.

K.R. Sridhar invited “60 Minutes” correspondent Lesley Stahl for a first look at the innards of the Bloom box that he has been toiling on for nearly a decade.

Looking at one of the boxes, Sridhar told Stahl it could power an average U.S. home.

“The way we make it is in two blocks. This is a European home. The two put together is a U.S. home,” he explained.

“‘Cause we use twice as much energy, is that what you’re saying?” Stahl asked.

“Yeah, and this’ll power four Asian homes,” he replied.

“So four homes in India, your native country?” Stahl asked.

“Four to six homes in our country,” Sridhar replied.

“It sounds awfully dazzling,” Stahl remarked.

“It is real. It works,” he replied.

He says he knows it works because he originally invented a similar device for NASA. He really is a rocket scientist.

“This invention, working on Mars, would have allowed the NASA administrator to pick up a phone and say, ‘Mr. President, we know how to produce oxygen on Mars,'” Sridhar told Stahl.

“So this was going to produce oxygen so people could actually live on Mars?” she asked.

“Absolutely,” Sridhar replied.

When NASA scrapped that Mars mission, Sridhar had an idea: he reversed his Mars machine. Instead of it making oxygen, he pumped oxygen in.

He invented a new kind of fuel cell, which is like a very skinny battery that always runs. Sridhar feeds oxygen to it on one side, and fuel on the other. The two combine within the cell to create a chemical reaction that produces electricity. There’s no need for burning or combustion, and no need for power lines from an outside source.

In October 2001 he managed to get a meeting with John Doerr from the big Silicon Valley venture capital firm Kleiner Perkins.

“How much do you think, ‘I need to come up with the next big thing’?” Stahl asked Doerr.

“Oh, that’s my job,” he replied. “To find entrepreneurs who are going to change the world and then help them.”

Doerr has certainly changed our world: he’s the one who discovered and funded Netscape, Amazon and Google. When he listened to Sridhar, the idea seemed just as transformative: efficient, inexpensive, clean energy out of a box.

“But Google: $25 million. This man said, ‘How much money?'” Stahl asked.

“At the time he said over a hundred million dollars,” Doerr replied.

But according to Doerr that was okay.

“So nothing he said scared you?” Stahl asked.

“Oh, I wasn’t at all sure it could be done,” he replied.

But there was a selling point: clean energy was an emerging market, worth gazillions.

“I like to say that the new energy technologies could be the largest economic opportunity of the 21st century,” Doerr explained.

He told Stahl it was the firm’s first clean energy investment.

Many followed, and the clean tech revolution in Silicon Valley was off and running with start-ups that produce thin flexible solar panels, harness wind with giant balloons, or develop new fuels from algae.

But Bloom is among the most expensive. “I heard actually so far, not just from Kleiner Perkins, but total $400 million,” Stahl remarked.

“You’re in the ballpark,” Sridhar acknowledged.

With that kind of money comes a lot of buzz. “In Silicon Valley, every time a company raises over $100 million, and they haven’t come out with a product yet, everybody starts getting the heebie-jeebies,” Michael Kanellos, editor-in-chief of the Web site GreenTech Media, told Stahl.

Kanellos admitted he is skeptical. “I’m hopeful but I’m skeptical. ‘Cause people have tried fuel cells since the 1830s,” he explained. “And they’re great ideas, right? You just need producing energy at an instant. But they’re not easy. They’re like the divas of industrial equipment. You have to put platinum inside there. You’ve got zirconium. The little plates inside have to work not just for an hour or a day, but they have to work for 30 years, nonstop. And then the box has to be cheap to make.”

One thing stoking his skepticism: Sridhar has been hyper-secretive – there’s no sign on his building, a cryptic Web site, and no public progress reports.

Given the stealthiness, we were surprised when Sridhar showed us – for the very first time – how he makes the “secret sauce” of his fuel cell on the cheap.

He said he bakes sand and cuts it into little squares that are turned into a ceramic. Then he coats it with green and black “inks” that he developed.

Sridhar told Stahl there is a secret formula. “And you take that and you apply that. You paint that on either side of this white ceramic to get a green layer and a black layer. And…that’s it.”

Sridhar told Stahl the finished product, a skinny fuel cell, would generate power.

One disk powers one light bulb; the taller the stack of disks, the more power it generates. In between each disk there’s a metal plate, but instead of platinum, Sridhar uses a cheap metal alloy.

The stacks are the heart of the Bloom box: put 64 of them together and you get something big enough to power a Starbucks.

Sridhar offered to give Stahl a sneak peek inside the Bloom box.

“All those modules that we saw go into this big box. Fuel goes in, air goes in, out comes electricity,” he explained.

Asked if Bloom box is intended to get rid of the grid, John Doerr told Stahl, “The Bloom box is intended to replace the grid…for its customers. It’s cheaper than the grid, it’s cleaner than the grid.”

“Now, won’t the utility companies see this as a threat and try to crush Bloom?” Stahl asked.

“No, I think the utility companies will see this as a solution,” Doerr said. “All they need to do is buy Bloom boxes, put them in the substation for the neighborhood and sell that electricity and operate.”

“They’ll buy these boxes?” Stahl asked.

“They buy nuclear power plants. They buy gas turbines from General Electric,” he pointed out.

To make power, you’d still need fuel. Many past fuel cells failed because they needed expensive pure hydrogen. Not this box.

“Our system can use fossil fuels like natural gas. Our system can use renewable fuels like landfill gas, bio-gas,” Sridhar told Stahl. “We can use solar.”

“You know, it’s very difficult for us to come in here and make an evaluation. How are we supposed to know whether what you’re saying is true?” Stahl asked.

“Why don’t we talk to our first customers?” he replied.

Yes, he already has customers. Twenty large, well-known companies have quietly bought and are testing Bloom boxes in California.

Like FedEx. We were at their hub in Oakland, the day Bloom installed their boxes, each one costing $700-800,000.

One reason the companies have signed up is that in California 20 percent of the cost is subsidized by the state, and there’s a 30 percent federal tax break because it’s a “green” technology. In other words: the price is cut in half.

“We have FedEx, we have Walmart,” Sridhar explained.

He told Stahl the first customer was Google.

Four units have been powering a Google datacenter for 18 months. They use natural gas, but half as much as would be required for a traditional power plant.

Sridhar told Stahl that three weeks in at Google, suddenly one of the boxes just stopped.

Asked if he panicked, he told Stahl, “For a short while… yes.”

He fixed that; then there was another incident. “The air filters clog up and air is not coming into the system because the highway is kicking dirt. You just flip the system around, and the problem is gone,” he explained.

Another company that has bought and is testing the Bloom box so Sridhar can work out the kinks is eBay. Its boxes are on the lawn in the middle of its campus in San Jose.

John Donahoe, eBay’s CEO, says its five boxes were installed nine months ago and have already saved the company more than $100,000 in electricity costs.

“It’s been very successful thus far. They’ve done what they said they would do,” he told Stahl.

eBay’s boxes run on bio-gas made from landfill waste, so they’re carbon neutral. Donahoe took us up to the roof to show off the company’s more than 3,000 solar panels. But they generate a lot less electricity than the boxes on the lawn.

“So this, on five buildings, acres and acres and acres,” Stahl remarked.

“Yes. The footprint for Bloom is much more efficient,” Donahoe said. “When you average it over seven days a week, 24 hours a day, the Bloom box puts out five times as much power that we can actually use.”

But not everyone is convinced that even if the technology works, Bloom – that now makes one box a day – will ever be able to be as big as its backers say.

“Going from a few to mass-manufacturing’s going to be tough. And then making them so people won’t run away at the price tag. It needs to be cheaper than solar. It needs to be cheaper than wind,” GreenTech Media’s Michael Kanellos told Stahl.

“What if he can get the price way down? He claims he can,” she asked.

“And if he can, the problem is then G.E. and Siemens and other conglomerates probably can do the same thing. They have fuel cell patents; they have research teams that have looked at this,” Kanellos replied.

“What do you think the chances are that in ten-plus years you and I will each have a Bloom box in our basements?” Stahl asked.

“Twenty percent,” Kanellos replied. “But it?s going to say ‘G.E.'”

“Companies that you have bet on, they haven’t all succeeded?” Stahl asked John Doerr of Kleiner Perkins.

“I have some famous failures,” he acknowledged.

Doerr is praying that Bloom is not the next Segway, as he and Sridhar get ready for the company’s official launch this Wednesday. They’re pulling out all the stops, including high profile endorsements.

“I have seen the technology and it works,” former Secretary of State Colin Powell said.

He joined Bloom’s board of directors last year.

Asked if this is the answer to our energy problems, Powell told Stahl, “I think that’s too big a claim to make. I think it is part of the transformation of the energy system. But I think the Bloom boxes will make a significant contribution.”

To make a contribution, in Sridhar’s mind, Bloom boxes will power not just our richest companies, but remote villages in Africa and all our houses.

“In five to ten years, we would like to be in every home,” he told Stahl.

He said a unit should cost an average person less than $3,000.

“You are an idealist,” Stahl remarked.

“You know, it’s about seeing the world as what it can be and not what it is,” Sridhar replied.

“I see you seeing a Bloom box in the basement of the White House,” she said.

“Absolutely. I would love that to go on the lawn,” he replied.

“So, forget?the basement. You want the Bloom box in the Rose Garden?” Stahl asked.