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The Federal Deposit Insurance Corp. said late today that it took control of First Priority Bank of Bradenton, Fla., marking the eighth bank failure this year — and the fourth just since July 11, when the feds seized IndyMac Bank of Pasadena.

First Priority had assets of $259 million and deposits of $227 million. And in a sign that the high-profile failure of IndyMac still hasn’t persuaded all bank depositors to keep their accounts within FDIC insurance limits, the agency estimated that First Priority had about $13 million in uninsured deposits.

SunTrust Banks Inc. of Atlanta agreed to buy First Priority’s insured deposits and to take over the bank’s six branches. But the uninsured depositors, as in IndyMac’s case, will be paid 50% of those balances upfront and then will have to wait to see what the FDIC gets as it liquidates First Priority’s assets.

The move, dismissed by critics as a gesture to force legislators to reach a compromise on how to resolve the state’s $15bn budget deficit, left more than 10,000 part-time and temporary employees without work today.

The order also reduced the pay of up to 200,000 state employees to the federal minimum wage of $6.55 an hour, below California’s minimum wage.

“I have a responsibility to make sure that our state has enough money to pay its bills,” the Republican governor said as he signed the order at a press conference in the state capital, Sacramento.

“It is a terrible situation to be in. I don’t think any governor wants to be in this situation … But this is really the only way out at this point.”

Critics, including the state controller John Chiang, a Democrat, disagree. Chiang, the state official who issues paychecks, has said he will pay employees normally, arguing that Schwarzenegger does not have the legal authority to summarily reduce employees’ pay.

Referring to the employees as “the innocent victims of a political struggle,” Chiang declared, “The state of California, the elected leadership, cannot put the important public servants of California in harm’s way. We put people first, we make sure we protect their interests, and that’s why I have to tell the governor, with all due respect, I am not going to comply with this order.”

Unions also declared their intention to challenge the order in court.

California, the nation’s largest state and the world’s seventh-largest economy, regularly fails to agree a budget by the annual July 1 deadline.

Prime Minister Yousaf Raza Gilani of Pakistan visited Washington this week.

The conclusion was based on intercepted communications between Pakistani intelligence officers and militants who carried out the attack, the officials said, providing the clearest evidence to date that Pakistani intelligence officers are actively undermining American efforts to combat militants in the region.

GM shares tumbled 6 percent in reaction to the automaker’s announcement of the deeper-than-expected loss, the third-largest quarterly loss in its history.

HERSH: There was a dozen ideas proffered about how to trigger a war. The one that interested me the most was why don’t we build — we in our shipyard — build four or five boats that look like Iranian PT boats. Put Navy seals on them with a lot of arms. And next time one of our boats goes to the Straits of Hormuz, start a shoot-up.

The forthcoming paperback edition of Scahill’s book on Blackwater, which appeared in hardcover in February 2007, will include 100 pages of new material, including a discussion of last September’s shooting spree in Baghdad by Blackwater operatives — which killed 17 Iraqi civilians but for which nobody has ever been charged.

“This is a company that has been accused of murdering Iraqi civilians,” Scahill pointed out, “of shooting the bodyguard to the Iraqi vice-president, of causing blowback attacks on United States troops, of hurting the morale of the United States military — that has cost United States taxpayers over a billion dollars for its operations in Iraq.”

However, Scahill’s greatest concern at present appears to be Blackwater’s venture into the private intelligence business.

“Blackwater started a private intelligence company,” he explained, “a private CIA essentially, called Total Intelligence Solutions. And the man running Total Intelligence Solutions is J. Cofer Black. He’s a thirty-year veteran of the Central Intelligence Agency. He also was the guy who ran the CIA’s extraordinary rendition program, the government-sanctioned kidnap-and-torture program.”

“His thirty-year CIA career, his network of contacts, his knowledge that was gained through his work in the most sensitive areas of the United States government is now on the open market for hire,” Scahill said sadly.

Anne Trafton, News Office
July 31, 2008

In a revolutionary leap that could transform solar power from a marginal, boutique alternative into a mainstream energy source, MIT researchers have overcome a major barrier to large-scale solar power: storing energy for use when the sun doesn’t shine.

Until now, solar power has been a daytime-only energy source, because storing extra solar energy for later use is prohibitively expensive and grossly inefficient. With today’s announcement, MIT researchers have hit upon a simple, inexpensive, highly efficient process for storing solar energy.

Requiring nothing but abundant, non-toxic natural materials, this discovery could unlock the most potent, carbon-free energy source of all: the sun. “This is the nirvana of what we’ve been talking about for years,” said MIT’s Daniel Nocera, the Henry Dreyfus Professor of Energy at MIT and senior author of a paper describing the work in the July 31 issue of Science. “Solar power has always been a limited, far-off solution. Now we can seriously think about solar power as unlimited and soon.”

Inspired by the photosynthesis performed by plants, Nocera and Matthew Kanan, a postdoctoral fellow in Nocera’s lab, have developed an unprecedented process that will allow the sun’s energy to be used to split water into hydrogen and oxygen gases. Later, the oxygen and hydrogen may be recombined inside a fuel cell, creating carbon-free electricity to power your house or your electric car, day or night.

The key component in Nocera and Kanan’s new process is a new catalyst that produces oxygen gas from water; another catalyst produces valuable hydrogen gas. The new catalyst consists of cobalt metal, phosphate and an electrode, placed in water. When electricity — whether from a photovoltaic cell, a wind turbine or any other source — runs through the electrode, the cobalt and phosphate form a thin film on the electrode, and oxygen gas is produced.

Combined with another catalyst, such as platinum, that can produce hydrogen gas from water, the system can duplicate the water splitting reaction that occurs during photosynthesis.

The new catalyst works at room temperature, in neutral pH water, and it’s easy to set up, Nocera said. “That’s why I know this is going to work. It’s so easy to implement,” he said.
‘Giant leap’ for clean energy

Sunlight has the greatest potential of any power source to solve the world’s energy problems, said Nocera. In one hour, enough sunlight strikes the Earth to provide the entire planet’s energy needs for one year.

James Barber, a leader in the study of photosynthesis who was not involved in this research, called the discovery by Nocera and Kanan a “giant leap” toward generating clean, carbon-free energy on a massive scale.

“This is a major discovery with enormous implications for the future prosperity of humankind,” said Barber, the Ernst Chain Professor of Biochemistry at Imperial College London. “The importance of their discovery cannot be overstated since it opens up the door for developing new technologies for energy production thus reducing our dependence for fossil fuels and addressing the global climate change problem.”

‘Just the beginning’

Currently available electrolyzers, which split water with electricity and are often used industrially, are not suited for artificial photosynthesis because they are very expensive and require a highly basic (non-benign) environment that has little to do with the conditions under which photosynthesis operates.

More engineering work needs to be done to integrate the new scientific discovery into existing photovoltaic systems, but Nocera said he is confident that such systems will become a reality.

“This is just the beginning,” said Nocera, principal investigator for the Solar Revolution Project funded by the Chesonis Family Foundation and co-Director of the Eni-MIT Solar Frontiers Center. “The scientific community is really going to run with this.”

Nocera hopes that within 10 years, homeowners will be able to power their homes in daylight through photovoltaic cells, while using excess solar energy to produce hydrogen and oxygen to power their own household fuel cell. Electricity-by-wire from a central source could be a thing of the past.

The project is part of the MIT Energy Initiative, a program designed to help transform the global energy system to meet the needs of the future and to help build a bridge to that future by improving today’s energy systems. MITEI Director Ernest Moniz, Cecil and Ida Green Professor of Physics and Engineering Systems, noted that “this discovery in the Nocera lab demonstrates that moving up the transformation of our energy supply system to one based on renewables will depend heavily on frontier basic science.”

Also, officials may share copies of the laptop’s contents with other agencies and private entities for language translation, data decryption or other reasons, according to the policies, dated July 16 and issued by two DHS agencies, U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement.

“The policies . . . are truly alarming,” said Sen. Russell Feingold (D-Wis.), who is probing the government’s border search practices. He said he intends to introduce legislation soon that would require reasonable suspicion for border searches, as well as prohibit profiling on race, religion or national origin.

DHS officials said that the newly disclosed policies — which apply to anyone entering the country, including U.S. citizens — are reasonable and necessary to prevent terrorism. Officials said such procedures have long been in place but were disclosed last month because of public interest in the matter.

Civil liberties and business travel groups have pressed the government to disclose its procedures as an increasing number of international travelers have reported that their laptops, cellphones and other digital devices have been taken — for months, in at least one case — and their contents examined.

The policies state that officers may “detain” laptops “for a reasonable period of time” to “review and analyze information.” This may take place “absent individualized suspicion.”

The policies cover “any device capable of storing information in digital or analog form,” including hard drives, flash drives, cell phones, iPods, pagers, beepers, and video and audio tapes. They also cover “all papers and other written documentation,” including books, pamphlets and “written materials commonly referred to as ‘pocket trash’ or ‘pocket litter.’ ”

Reasonable measures must be taken to protect business information and attorney-client privileged material, the policies say, but there is no specific mention of the handling of personal data such as medical and financial records.

When a review is completed and no probable cause exists to keep the information, any copies of the data must be destroyed. Copies sent to non-federal entities must be returned to DHS. But the documents specify that there is no limitation on authorities keeping written notes or reports about the materials.

“They’re saying they can rifle through all the information in a traveler’s laptop without having a smidgen of evidence that the traveler is breaking the law,” said Greg Nojeim, senior counsel at the Center for Democracy and Technology. Notably, he said, the policies “don’t establish any criteria for whose computer can be searched.”

“We’re putting that technology in place to enable us to do that,” said Police Commissioner Ray Kelly, adding that the service will be available soon.

“It’s a fact of life,” Kelly said. “Everybody has a camera in their telephones. When people can record an event taking place that helps us during an investigation, it’s helpful.”

Soon citizen sleuths can transmit evidence of criminal activity directly to the police and 911, including evidence of police misconduct, such as the recent video of a police officer shoving a bicyclist to the ground in Times Square.

The video of the incident has received over one million views on YouTube and has generated online discussion about police brutality and abuse of power.

Banks’ primary credit borrowings averaged $17.45 billion per day in the latest week, the second straight week this had hit a record and up from $16.38 billion the previous week, Fed data showed on Thursday.

“It shows there’s a shortage of liquidity in the system,” said Christopher Low, chief economist at FTN Financial in New York.

Secondary credit the Fed extended, which is usually taken out by banks in need of emergency cash, rose to $89 million in the latest week, from $34 million the week before. Although these numbers are still very small compared with primary credit, “What that tells you is that there’s an increasing number of banks that the Fed is classifying as ‘unsound’ or inadequately capitalized,” Low said.