Sunday, April 25, 2010

Goldman Executives: We Made Money Betting Against Mortgage Market

Goldman Executives: We Made Money Betting Against Mortgage Market

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WASHINGTON — In an internal e-mail released Saturday, Goldman Sachs chief executive Lloyd Blankfein wrote in November 2007 that the firm "didn't dodge the mortgage mess," but "made more than we lost" by betting against the U.S. housing market.

Blankfein's e-mail, which a Senate investigations panel released with three other subpoenaed company documents, appears to contradict Goldman's denials that it profited from the subprime mortgage meltdown by secretly betting that housing prices would fall. At the same time, Goldman was selling tens of billions of dollars in risky mortgage securities.

Goldman has said that its contrary bets were largely on behalf of its clients.

The release of the documents sets the stage for a confrontation on Tuesday, when Blankfein and six other present and former Goldman executives are scheduled to testify to the Senate Permanent Subcommittee on Investigations, which will begin revealing the results of a yearlong investigation.

In a second e-mail, in July 2007, Goldman's chief financial officer, David Viniar, updated company President Gary Cohn on the performance of residential mortgage securities.

"Tells you what might be happening to people who don't have the big short," Viniar wrote, referring to Goldman's negative — or "short" — bets on housing.

Goldman Sachs, the world's most elite investment bank, was the only major Wall Street firm to escape much of the subprime crash that set off the global economic crisis.

Goldman reported $1.7 billion in mortgage-related losses, but the company has never divulged how much it earned from exotic contrary bets using insurance-like contracts known as credit-default swaps.

McClatchy reported last November that Goldman marketed $57 billion in risky mortgage securities, including $39 billion backed by risky home loans in 2006 and 2007 without telling investors it was secretly shorting the housing market.

Sen. Carl Levin, a Michigan Democrat who chairs the committee, said in a statement releasing the e-mails that Goldman Sachs and other investment banks were "self-interested promoters of risky and complicated financial schemes that helped trigger" the economic crisis ravishing the nation the past two years.

"They bundled toxic mortgages into complex financial instruments, got the credit rating agencies to label them as AAA securities, and sold them to investors, magnifying and spreading risk throughout the financial system, and all too often betting against the instruments they sold and profiting at the expense of their clients," Levin said. "These e-mails show that, in fact, Goldman made a lot of money by betting against the mortgage market."

Goldman responded Saturday with a release of corporate profit and loss information that it said, "demonstrates conclusively that we did not make a significant amount of money in the mortgage market," according to a statement from spokesman Lucas van Praag. He said the documents show that Goldman had net losses of more than $1.2 billion in residential mortgage-related products in the period.

"As a firm, we obviously could not have been significantly net short since we lost money in a declining housing market," he said.

He also chastised Levin's committee, saying it had "cherry-picked just four e-mails from the almost 20 million pages of documents and e-mails provided to it by Goldman Sachs. It is concerning that the Subcommittee seems to have reached its conclusion even before holding a hearing."

Among Tuesday's witnesses will be Goldman mortgage trader Michael Swenson and his colleague Josh Birnbaum, whom some people say reaped $4 billion in profits for Goldman in 2007.

The e-mails released Saturday included an Oct. 11, 2007 exchange between Swenson and another Goldman employee, Donald Mullen. Swenson appraised Mullen that Moody's Investors Service was issuing a series of downgrades of offshore bundles of mortgage securities, which meant that Goldman's negative bets would be winners.

"Sounds like we will make some serious money," Mullen responded.

"Yes, we are well positioned," Swenson said.

Blankfein's remarks on Nov. 18, 2007, came as the company sought to avoid damage from a New York Times story, due to be published the next day, describing how Goldman had dodged the mortgage crash.

Van Praag advised half a dozen senior company officials in an e-mail of the pending story, commenting that it would "of course, have 'balance' (ie stuff we don't like)."

Blankfein replied: "Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts." He added that "it's not over, so who knows how it will turn out ultimately."

However, by November 2007 Goldman had largely shed its residential mortgage-related risks.

The disclosure comes a little more than a week after the Securities and Exchange Commission sued Goldman for civil fraud, accusing the firm and one of its vice presidents of allowing a long-time hedge fund client to help select the securities for a deal without telling the investors that the client planned to bet against the securities.

The client, Paulson and Co., made $1 billion and the investors lost that much. The Goldman vice president, Fabrice Tourre, is also expected to testify on Tuesday. Goldman has denied the charges.

Obama administration spending billions on new global strike weapons

Obama administration spending billions on new global strike weapons

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The Obama administration is spending billions of dollars to develop new weapons systems, including powerful conventional warhead missiles capable of striking any target in the world within less than an hour.

The US Air Force carried out two separate test launches April 22—one at Vandenberg Air Force Base in California, and the other at Cape Canaveral, Florida—designed to further the development of these weapons systems.

The first system, known as Conventional Prompt Global Strike, or CPGS, would be capable of striking anywhere across the globe within under an hour of a launch order, using intercontinental ballistic missiles fired from the US to deliver conventional warheads against targets in other countries.

Capable of striking a target with an impact speed of up to 4,000 feet per second and a payload of up to 8,000 pounds, these warheads would be able to obliterate everything within a 3,000-foot radius.

The Obama administration has requested $240 million in appropriations by Congress to pay for developing CPGS in 2011, an increase of 45 percent over this year’s budget. The total cost of the program is expected to mount to over $2 billion by 2015, by which time the Pentagon hopes to have deployed the first elements of the weapons system.

The Defense Advanced Research Projects Agency (DARPA) carried out a test launch Thursday of a space plane known as the Falcon, or Hypersonic Technology Vehicle (HTV-2), a suborbital vehicle that is the prototype for the CPGS delivery system.

It was launched from Vandenberg Air Force Base on a decommissioned ballistic missile, from which the plane separated just outside of the atmosphere, hurtling back to the Earth at a speed of more than 13,000 miles per hour, more than 20 times the speed of sound. The plane was supposed to crash into the Pacific Ocean near a US military test site on the Kwajalein Atoll.

The other unmanned space vehicle launched Thursday from Cape Canaveral was the X-37B. The Pentagon remained tight-lipped about the highly classified program, refusing to say even when the 29-foot plane—which resembles a smaller version of the space shuttle—would return to earth, much less specify what it was carrying or give any detailed explanation of its mission.

While it is estimated that the cost of developing the X-37B will run into the billions, the precise amount also remains classified, included as part of the Pentagon’s “black” budget.

Gary Payton, the deputy undersecretary for Air Force space programs, would say only that the test flight was designed to further “development programs that will provide capabilities for our warfighters in the future.”

It is widely believed that the vehicle is being developed as part of a US effort to militarize space, providing a weapons platform and launch pad for smaller spy satellites. There is also speculation that it is being developed as part of the Prompt Global Strike system.

Advocates of Prompt Global Strike have promoted the weapons system as a means to respond instantaneously to intelligence on the location of alleged terrorists or supposed threats of an imminent launch of weapons of mass destruction. They have also argued that the deployment of the new weapons would reduce the dependence of the US military on its nuclear arsenal.

Critics, including Russian officials, have pointed out, however, that the launching of intercontinental ballistic missiles, even if they were carrying conventional warheads, could easily trigger a nuclear war.

“World states will hardly accept a situation in which nuclear weapons disappear, but weapons that are no less destabilizing emerge in the hands of certain members of the international community,” Russian Foreign Minister Sergei Lavrov told reporters earlier this month in Moscow.

In a state of the nation address following the announcement of the proposed weapons system under the Bush administration, then-Russian President Vladimir Putin warned, “The launch of such a missile could provoke a full-scale counterattack using strategic nuclear forces.”

Largely as a result of such warnings, Congress previously failed to provide funding for the program. The proposal “really hadn’t gone anywhere in the Bush administration,” Defense Secretary Robert Gates said in an interview on the ABC news program “This Week.” Gates, who was held over in his post by incoming President Barack Obama, noted that the weapons system had been “embraced by the new administration.”

The New York Times reported Friday that in an interview Obama had defended the weapons system as a “move towards less emphasis on nuclear weapons” and argued that it would insure “that our conventional weapons capability is an effective deterrent in all but the most extreme circumstances.”

In a separate interview with the Times, Air Force Gen. Kevin Chilton, the head of the Strategic Command, argued that the weapons system was needed to give the White House more military options.

“Today we can present some conventional options to the President to strike a target anywhere on the globe that range from 96 hours, to several hours maybe, 4, 5, 6 hours,” Chilton told the Times.

“That would simply not be fast enough, he noted, if intelligence arrived about a movement by Al Qaeda terrorists or the imminent launching of a missile,” the newspaper said. “‘If the president wants to act on a particular target faster than that, the only thing we have that goes faster is a nuclear response,’ he said.”

Advocates of the program within the military and the administration have claimed that the danger of Russia or China interpreting the launch of a Prompt Global Strike missile as the beginning of a nuclear attack could be alleviated by positioning launch vehicles above ground, giving them a different flight path and even opening launch sites up for inspection. Military analysts point out, however, that such a system would provide an ideal subterfuge in the event that Washington decided to launch a “preventive” nuclear war.

Moscow’s concern over the proposed weapons system found expression in the recently signed New Start nuclear weapons treaty agreed by the US and Russia, which requires that the introduction of any US intercontinental ballistic missile carrying a conventional weapon capable of reaching Russian soil be compensated by the decommissioning of an existing nuclear-armed missile.

Obama’s rhetoric about the new weapons system contributing to nuclear disarmament notwithstanding, there is ample evidence that Washington remains committed to maintaining and upgrading its nuclear arsenal.

Speaking Thursday at the NATO foreign ministers meeting in Estonia, Secretary of State Hillary Clinton rejected proposals from European governments for the removal of so-called tactical or battlefield nuclear weapons that the US has deployed on the continent.

“We should recognize that as long as nuclear weapons exist, NATO will remain a nuclear alliance,” Clinton told the gathering in Tallinn. “As a nuclear alliance, sharing nuclear risks and responsibilities widely is fundamental.”

Meanwhile, at a recent hearing of the House Armed Services Committee, General Chilton, the head of the US Strategic Command, assured members of Congress that the military is proceeding with work on a “follow-on to the current Ohio-class Trident submarine fleet,” which carries D-5 nuclear-armed intercontinental ballistic missiles.

Sounding the same theme, James Miller, the principal deputy undersecretary of defense for policy, said, “The department is currently looking at the mix of long-range strike capabilities that the military will need for the coming decade or two,” adding that both nuclear and conventional weapons would figure in this “mix.”

The development of these new weapons systems will only provide Washington and the Pentagon with another instrument for carrying out so-called “preventive wars” and acts of aggression, giving the US president a non-nuclear capacity to kill thousands of people virtually instantaneously with the push of a button.

Computerized Front Running and Financial Fraud

Computerized Front Running and Financial Fraud

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While the SEC is busy investigating Goldman Sachs, it might want to look into another Goldman-dominated fraud: computerized front running using high-frequency trading programs.

Market commentators are fond of talking about “free market capitalism,” but according to Wall Street commentator Max Keiser, it is no more. It has morphed into what his TV co-host Stacy Herbert calls “rigged market capitalism”: all markets today are subject to manipulation for private gain.

Keiser isn’t just speculating about this. He claims to have invented one of the most widely used programs for doing the rigging. Not that that’s what he meant to invent. His patented program was designed to take the manipulation out of markets. It would do this by matching buyers with sellers automatically, eliminating “front running” – brokers buying or selling ahead of large orders coming in from their clients. The computer program was intended to remove the conflict of interest that exists when brokers who match buyers with sellers are also selling from their own accounts. But the program fell into the wrong hands and became the prototype for automated trading programs that actually facilitate front running.

Also called High Frequency Trading (HFT) or “black box trading,” automated program trading uses high-speed computers governed by complex algorithms (instructions to the computer) to analyze data and transact orders in massive quantities at very high speeds. Like the poker player peeking in a mirror to see his opponent’s cards, HFT allows the program trader to peek at major incoming orders and jump in front of them to skim profits off the top. Note that these large institutional orders are our money -- our pension funds, mutual funds, and 401Ks.

When “market making” (matching buyers with sellers) was done strictly by human brokers on the floor of the stock exchange, manipulations and front running were considered an acceptable (if morally dubious) price to pay for continuously “liquid” markets. But front running by computer, using complex trading programs, is an entirely different species of fraud. A minor flaw in the system has morphed into a monster. Keiser maintains that computerized front running with HFT has become the principal business of Wall Street and the primary force driving most of the volume on exchanges, contributing not only to a large portion of trading profits but to the manipulation of markets for economic and political ends.

The “Virtual Specialist”: the Prototype for High Frequency Trading

Until recently, most market making was done by brokers called “specialists,” those people you see on the floor of the New York Stock Exchange haggling over the price of stocks. The job of the specialist originated over a century ago, when the need was recognized for a system for continuous trading. That meant trading even when there was no “real” buyer or seller waiting to take the other side of the trade.

The specialist is a broker who deals in a specific stock and remains at one location on the floor holding an inventory of it. He posts the “bid” and “ask” prices, manages “limit” orders, executes trades, and is responsible for managing the uninterrupted flow of orders. If there is a large shift in demand on the “buy” side or the “sell” side, the specialist steps in and sells or buys out of his own inventory to meet the demand, until the gap has narrowed.

This gives him an opportunity to trade for himself, using his inside knowledge to book a profit. That practice is frowned on by the Securities Exchange Commission (SEC), but it has never been seriously regulated, because it has been considered necessary to keep markets “liquid.”

Keiser’s “Virtual Specialist Technology” (VST) was developed for the Hollywood Stock Exchange (HSX), a web-based, multiplayer simulation in which players use virtual money to buy and sell “shares” of actors, directors, upcoming films, and film-related options. The program determines the true market price automatically, by comparing “bids” with “asks” and weighting the proportion of each. Keiser and HSX co-founder Michael Burns applied for a patent for a “computer-implemented securities trading system with a virtual specialist function” in 1996, and U.S. patent no. 5960176 was awarded in 1999.

But things went awry after the crash, when Keiser’s company HSX Holdings sold the VST patent to investment firm Cantor Fitzgerald, over his objection. Cantor Fitzgerald then put the part of the program that would have eliminated front-running on ice, just as drug companies buy up competing patents in order to take them off the market. Instead of preventing front-running, the program was altered so that it actually enhanced that fraudulent practice. Keiser (who is now based in Europe) notes that this sort of patent abuse is illegal under European Intellectual Property law.

Meanwhile, the design of the VST program remained on display at the patent office, giving other inventors ideas. To get a patent, applicants must list “prior art” and then prove that their patent is an improvement in some way. The listing for Keiser’s patent shows that it has been referenced by 132 others involving automated program trading or HFT.

HFT has quickly come to dominate the exchanges. High frequency trading firms now account for 73% of all U.S. equity trades, although they represent only 2% of the approximately 20,000 firms in operation.

In 1998, the SEC allowed online electronic communication networks, or alternative trading systems, to become full-fledged stock exchanges. Alternative trading systems (ATS) are computer-automated order-matching systems that offer exchange-like trading opportunities at lower costs but are often subject to lower disclosure requirements and different trading rules. Computer systems automatically match buy and sell orders that were themselves submitted through computers. Market making that was once done with a “specialist’s book” -- something that could be examined and audited -- is now done by an unseen, unaudited “black box.”

For over a century, the stock market was a real market, with live traders hotly bidding against each other on the floor of the exchange. In only a decade, floor trading has been eliminated in all but the largest exchanges, such as the New York Stock Exchange (NYSE); and even in those markets, it now co-exists with electronic trading.

Alternative trading systems allow just about any sizable trader to place orders directly in the market, rather than routing them through investment dealers on the NYSE. They also allow any sizable trader with a sophisticated HFT program to front run trades.

Flash Trades: How the Game Is Rigged

An integral component of computerized front running is a dubious practice called “flash trades.” Flash orders are permitted by a regulatory loophole that allows exchanges to show orders to some traders ahead of others for a fee. At one time, the NYSE allowed specialists to benefit from an advance look at incoming orders; but it has now replaced that practice with a “level playing field” policy that gives all investors equal access to all price quotes. Some ATSs, however, which are hotly competing with the established exchanges for business, have adopted the use of flash trades to pull trading business away from the exchanges. An incoming order is revealed (or flashed) to a trader for a fraction of a second before being sent to the national market system. If the trader can match the best bid or offer in the system, he can then pick up that order before the rest of the market sees it.

The flash peek reveals the trade coming in but not the limit price – the maximum price at which the buyer or seller is willing to trade. This is what the HFT program figures out, and it is what gives the high-frequency trader the same sort of inside information available to the traditional market maker: he now gets to peek at the other player’s cards. That means high-frequency traders can do more than just skim hefty profits from other investors. They can actually manipulate markets.

How this is done was explained by Karl Denninger in an insightful post on Seeking Alpha in July 2009:

“Let’s say that there is a buyer willing to buy 100,000 shares of BRCM with a limit price of $26.40. That is, the buyer will accept any price up to $26.40. But the market at this particular moment in time is at $26.10, or thirty cents lower.

“So the computers, having detected via their ‘flash orders’ (which ought to be illegal) that there is a desire for Broadcom shares, start to issue tiny (typically 100 share lots) ‘immediate or cancel’ orders - IOCs - to sell at $26.20. If that order is ‘eaten’ the computer then issues an order at $26.25, then $26.30, then $26.35, then $26.40. When it tries $26.45 it gets no bite and the order is immediately canceled.

“Now the flush of supply comes at, big coincidence, $26.39, and the claim is made that the market has become ‘more efficient.’

“Nonsense; there was no ‘real seller’ at any of these prices! This pattern of offering was intended to do one and only one thing -- manipulate the market by discovering what is supposed to be a hidden piece of information -- the other side’s limit price!

“With normal order queues and flows the person with the limit order would see the offer at $26.20 and might drop his limit. But the computers are so fast that unless you own one of the same speed you have no chance to do this -- your order is immediately ‘raped’ at the full limit price! . . . [Y]ou got screwed for 29 cents per share which was quite literally stolen by the HFT firms that probed your book before you could detect the activity, determined your maximum price, and then sold to you as close to your maximum price as was possible.”

The ostensible justification for high-frequency programs is that they “improve liquidity,” but Denninger says, “Hogwash. They have turned the market into a rigged game where institutional orders (that’s you, Mr. and Mrs. Joe Public, when you buy or sell mutual funds!) are routinely screwed for the benefit of a few major international banks.”

In fact, high-frequency traders may be removing liquidity from the market. So argues John Daly in the U.K. Globe and Mail, citing Thomas Caldwell, CEO of Caldwell Securities Ltd.:

“Large institutional investors know that if they start trying to push through a large block of shares at a certain price – even if the block is broken into many small trades on several ATSs and markets -- they can trigger a flood of high-frequency orders that immediately move market prices to the institution’s disadvantage. . . . That’s why institutions have flocked to so-called dark pools operated by ATSs such as Instinet, and individual dealers like Goldman Sachs. The pools allow traders to offer prices without publicly revealing their identities and tipping their hand.”

Because these large, dark pools are opaque to other investors and to regulators, they inhibit the free and fair trade that depends on open and transparent auction markets to work.

The Notorious Market-Rigging Ringleader, Goldman Sachs

Tyler Durden, writing on Zero Hedge, notes that the HFT game is dominated by Goldman Sachs, which he calls “a hedge fund in all but FDIC backing.” Goldman was an investment bank until the fall of 2008, when it became a commercial bank overnight in order to capitalize on federal bailout benefits, including virtually interest-free money from the Fed that it can use to speculate on the opaque ATS exchanges where markets are manipulated and controlled.

Unlike the NYSE, which is open only from 10 am to 4 pm EST daily, ATSs trade around the clock; and they are particularly busy when the NYSE is closed, when stocks are thinly traded and easily manipulated. Tyler Durden writes:

“[A]s the market keeps going up day in and day out, regardless of the deteriorating economic conditions, it is just these HFT’s that determine the overall market direction, usually without fundamental or technical reason. And based on a few lines of code, retail investors get suckered into a rising market that has nothing to do with green shoots or some Chinese firms buying a few hundred extra Intel servers: HFTs are merely perpetuating the same ponzi market mythology last seen in the Madoff case, but on a massively larger scale.”

HFT rigging helps explain how Goldman Sachs earned at least $100 million per day from its trading division, day after day, on 116 out of 194 trading days through the end of September 2009. It’s like taking candy from a baby, when you can see the other players’ cards.

Reviving the Free Market

So what can be done to restore free and fair markets? A step in the right direction would be to prohibit flash trades. The SEC is proposing such rules, but they haven’t been effected yet.

Another proposed check on HFT is a Tobin tax – a very small tax on every financial trade. Proposals for the tax range from .005% to 1%, so small that it would hardly be felt by legitimate “buy and hold” investors, but high enough to kill HFT, which skims a very tiny profit from a huge number of trades.

That is what proponents contend, but a tiny tax might not actually be enough to kill HFT. Consider Denninger’s example, in which the high-frequency trader was making not just a few pennies but a full 29 cents per trade and had an opportunity to make this sum on 99,500 shares (100,000 shares less 5 100-lot trades at lesser sums). That’s a $28,855 profit on a $2.63 million trade, not bad for a few milliseconds of work. Imposing a .1% Tobin tax on the $2.63 million would reduce the profit to $26,225, but that’s still a nice return for a trade that takes less time than blinking.

The ideal solution would fix the problem at its source -- the price-setting mechanism itself. Keiser says this could be done by banning HFT and installing his VST computer program in its original design in all the exchanges. The true market price would then be established automatically, foreclosing both human and electronic manipulation. He notes that the shareholders of his former firm have a good claim for voiding out the sale to Cantor Fitzgerald and retrieving the program, since the deal was never consummated and the investors in HSX Holdings have never received a penny for the sale.

There is just one problem with their legal claim: the paperwork proving it was shipped to Cantor Fitzgerald’s offices in the World Trade Center several months before September 2001. Like free market capitalism itself, it seems, the evidence has gone up in smoke.

Wall St.'s Simple Formula for Staying Rich

Wall Street's Simple Formula for Staying Rich

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In a 1964 concurring opinion deciding Jacobellis v. Ohio, Associate Supreme Court Justice Potter Stewart wrote about “hard-core pornography” and his struggle to define it: “Perhaps I could never succeed in intelligibly doing so. But I know it when I see it.”

Using Potter’s indisputable logic, it’s hard not to see something obscene in how Wall Street reaped massive profits and bonuses in 2009 — and continues to do so, as is clear from Monday’s announcement by Citigroup that it had earned $4.4 billion in the first quarter of 2010, which was even more than earned by Bank of America ($3.2 billion) and JPMorgan Chase ($3.3 billion) in the same period — merely 18 months after trillions of dollars of American taxpayers’ treasure was used to save a financial system brought to the precipice by Wall Street’s greed and irresponsible risk-taking. Goldman Sachs, which is facing a civil fraud suit filed by Washington regulators, is expected to report robust earnings Tuesday morning as well.

How did this happen at the same time Main Street continues to suffer from an unemployment rate of almost 10 percent and from the worst recession in generations? Partly, this resulted from the original strategy of the Treasury and the Federal Reserve to first fix the banking system and then worry about repairing the wider economy. Hence, the $700 billion Troubled Asset Relief Program arrived in September 2008, followed by, in February 2009, the $787 billion stimulus program, or American Recovery and Reinvestment Act.

The benefits for Wall Street started with the extensive de-leveraging that continues the world over in the wake of the financial crisis (it caused) by helping companies raise new equity and refinance existing debt. The Wall Street firms that survived the crisis reap billions of dollars in fees for this sort of work. Mostly, though, Wall Street is making money by taking advantage of its rock-bottom cost of capital, provided courtesy of the Federal Reserve — now that the big Wall Street firms are all bank holding companies — and then turning around and lending it at much higher rates.

The easiest and most profitable risk-adjusted trade available for the banks is to borrow billions from the Fed — at a cost of around half a percentage point — and then to lend the money back to the U.S. Treasury at yields of around 3 percent, or higher, a moment later. The imbedded profit — of some 2.5 percentage points — is an outright and ongoing gift from American taxpayers to Wall Street.

You’re welcome.

And now for the truly obscene part. By keeping interest rates so stubbornly low — and by remaining committed to doing so — the Fed is crushing the rest of us, especially senior citizens on fixed incomes and those who have rediscovered saving in order to have some peace of mind.

For instance, despite my bank calling it a “premier platinum savings” account, I am getting a measly 0.15 percent interest rate. On my “premier platinum checking” account, the interest rate is 0.01 percent. In an essay in The Wall Street Journal recently, Charles Schwab pointed out that there is more than $7.5 trillion in American household wealth stored in short-term, interest-bearing checking, savings and CD accounts. (The average interest rate for a one-year CD is 1.3 percent.)

Our savings is another source of virtually free capital for banks to use to lend out at much higher rates. These anemic yields are a “potential disaster striking at core American principles of self-reliance, individual responsibility and fairness,” Mr. Schwab observed correctly.

Sure seems to be working for Wall Street, though. At $140 billion in compensation and benefits, the 2009 paychecks on Wall Street were the best ever. While several top executives named in public filings may have tried to minimize their 2009 compensation after so much populist rage, they could only take this charade so far.

Hedge fund managers did even better. The top 25 earned a total of $25.3 billion in 2009 — an average of $1 billion each — with the lowest paid hedge-fund manager receiving $350 million. Topping the list was David Tepper, of Appaloosa Management. He made $4 billion last year. “We bet on the country’s revival,” Mr. Tepper said in an interview with The Times.

Let’s be clear about one thing: The American people made a bigger bet on the country’s revival than did Mr. Tepper. But we are still waiting for our payoff. Surely Justice Stewart could see that the tax on American savers and the corresponding subsidy to hedge-fund managers, bankers and traders is nothing less than hard-core pornography.

Pentagon Launches Mystery US Spacecraft

Pentagon Launches Mystery US Spacecraft

A top-secret rocket has been launched by the US military amid rumours its purpose is to perform experiments for a space weapons programme.

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Officially the project will test a new space shuttle, the X-37B, that will look at safer and cheaper ways to return spacecraft to earth.

But the details of its payload, experiments and orbital operations have all been classified.

The real purpose of the mission could be to position satellites and other types of surveillance, according to military and security sources.

The launch is a military project being controlled by the US Air Force Space Command - not NASA.

A military use would explain why the Pentagon has invested up to hundreds of millions of dollars in the craft.

The vehicle should "provide an 'on-orbit laboratory' test environment to prove new technology and components before those technologies are committed to operational satellite programmes", according to the US Air Force.

Unlike current shuttles, it can remain in orbit for up to nine months, but cannot carry people.

The X-37B will eventually land in California, but no-one knows how long its first mission will take.

"In all honesty, we don't know when it's coming back," said Gary Payton of the US Air Force.

The spacecraft would aid "development programs that will provide capabilities for our warfighters in the future", he added.

Once in orbit the shuttle will be powered by solar panels and lithium-ion batteries.

If its flight is successful a second vehicle will be launched next year.

Guns vs. Butter 2010

Guns vs. Butter 2010

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See if you can identify the bleeding heart liberal who said this:

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children."

Noam Chomsky? Michael Moore? Bernie Sanders?

Nope, it was that unrepentant lefty, five-star general Dwight Eisenhower, in 1953, just a few months after taking office -- a time when the economy was booming and unemployment was 2.7 percent.

Yet today, while America's economy sputters down the road to recovery and the middle class struggles to make ends meet -- with over 26 million people unemployed or underemployed and record numbers of homes being lost to foreclosure -- the "guns vs. butter" argument isn't even part of the national debate. Of course, today, the argument might be more accurately framed as "ICBM nukes, Predator drones, and missile defense shields vs. jobs, affordable college, decent schools, foreclosure prevention, and fixing the gaping holes in our social safety net."

We hear endless talk in Washington about belt-tightening and deficit reduction, but hardly a word about whether the $161 billion being spent this year to fight unnecessary wars of choice in Afghanistan and Iraq might be better spent helping embattled Americans here at home.

Indeed, during his State of the Union speech in January, President Obama proposed freezing all discretionary government spending for three years -- but exempted military spending, even though the defense budget has ballooned over the last ten years. According to defense analyst Lawrence Korb, who served as Assistant Secretary of Defense in the Reagan administration, the baseline defense budget has increased by 50 percent since 2000. Over that same period, non-defense discretionary spending increased less than half that much.

In fact, the president is on track to spend more on defense, in real dollars, than any other president has in one term of office since WWII. In that time we've had Korea, Vietnam, the massive military buildup under Reagan, and Bush's funded-by-tax-cuts invasions of Afghanistan and Iraq, but in the most trying economic times since the Depression, Obama's out-gunning them all.

This is not about ignoring the threats to our national security. And it's certainly not about pacifism. To quote the president's 2002 speech: "I don't oppose all wars. What I am opposed to is a dumb war." Iraq was never about making us safer. And the original rationale for going to war in Afghanistan -- taking on al Qaeda -- has been accomplished, with less than 100 members of the terrorist group still there. As former Bush State Department official Richard Haas has said, "If Afghanistan were a war of necessity, it would justify any level of effort. It is not and does not." In fact, by helping destabilize Pakistan and stretching our military to its limits, our presence in Afghanistan is actually making us less safe. The irrationality of continuing to spend precious resources on wars we shouldn't be fighting is all the more galling when juxtaposed with our urgent and growing needs at home.

The LA Times' Doyle McManus offers an eye-opening example of just how far our mission in Afghanistan has "creeped." His on-the-ground report on the military's upcoming push in Kandahar (cost: $33 billion) -- a surge the military considers as important as securing Baghdad was to Iraq -- doesn't include a single mention of taking on al Qaeda. Instead, McManus describes Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, telling an Afghan leader that the goals of the surge, as well as defeating the Taliban, include "reducing corruption, making local government work and, eventually, providing jobs."

Is that why we are still fighting a war there nine years later, spending American blood and treasure -- to provide jobs for the people of Kandahar? It's like a very bad joke: "The good news is, the Obama administration is ramping up a multi-billion program that will create a host of new jobs. The bad news is, you have to move to Kandahar to apply."

The Bush-era rationale for these overseas misadventures was always: We'll fight 'em over there, so we don't have to fight 'em over here. Today, it seems, we're fighting to create jobs for 'em over there, while we don't have enough jobs for our people over here.

At a time when so many hardworking middle class families are reeling from the economic crisis -- and our country is facing the harsh one-two punch of more people in need at the exact moment social services are being slashed to the bone -- that seems like the most perverted of priorities.

"Civilizations," argued historian Arnold Toyenbee, "die from suicide, not by murder." That is, our future is dependent on the choices we make and the things we decide to value.

In a video put together by Robert Greenwald's Rethink Afghanistan campaign, Berkeley professor Ananya Roy defines the troubled state of America not so much as a fiscal crisis as "a crisis of priorities."

And Barney Frank, who has been one of the few in Washington arguing for the need to cut military spending, says that our military over-commitments have "devastated our ability to improve our quality of life through government programs." Looking at the money we've spent on Iraq and Afghanistan, Frank says: "We would have had $1 trillion now to help fix the economy and do the things for our people that they deserve."

The National Priorities Project (NPP) offers a cool online tool that brings this budget trade-off to life by showing -- specifically -- all the things that could have been done with the money spent on Afghanistan and Iraq. It allows you to break the numbers down by your state, Congressional district, or town and to focus on the kinds of opportunity costs that most interest you, including education, public safety, affordable housing, and health care for kids.

For example, according to the NPP, since 2003, Americans have spent over $747 billion in Iraq. Of that, taxpayers living in California have forked over $94.7 billion. That could have provided 35 million children with health care for a year -- or 11 million places in a Head Start program. Or funding for over 1.6 million public safety officers. Or 283,378 affordable housing units. Or 1.3 million elementary school teachers. Or 11.3 million college scholarships. This in a state that has laid off more than 23,000 teachers, and has seen tuition rates at public universities skyrocket -- putting higher education beyond the reach of the very students these universities were created for. And those that are able to go are leaving in debt -- the average college student graduates carrying a debt of over $23,000.

Education has always been the path middle class Americans took to attain the American Dream. But those Americans are increasingly finding that path -- and that dream -- blocked.

Again, we are not talking about lessening America's national security. We are talking about eliminating or cutting back outdated and redundant military defense programs.

Barney Frank points to pricey relics of the Cold War such as the F-22 fighter, the Osprey transport helicopter, and missile defense programs in Eastern Europe as examples of wasted resources. He also suggests doing away with one prong of America's hugely expensive nuclear triad -- bombers, submarines, and intercontinental ballistic missiles -- designed to annihilate a Soviet empire that no longer exists. "My radical proposal," Frank told HuffPost's Ryan Grim, "is that we say to the Pentagon that they can pick two of the three, and let us abolish one."

Lawrence Korb offers his own laundry list of ways to trim the defense budget by billions without impacting national security. Even after cutting billions, he points out, the defense budget would remain significantly higher, in real dollars, than it was at the height of the Reagan build-up. A build-up that is often credited with leading to the collapse of the Soviet Union, which, in an effort to keep up with America, raised its defense spending to 27 percent of its GDP while freezing the production of civilian goods.

Increased military spending has been a hallmark of nations in decline since the fall of the Roman Empire -- including the Soviets trying to match America nuclear warhead for nuclear warhead and North Korea joining the nuclear club while its people starve.

If we don't come to our senses and get our deeply misguided priorities back in order, America engaging in nation building wars in Iraq and Afghanistan could easily join that ignominious list. A superpower turned Third World nation -- dead from our own hand.

"The CIA Hit List": Muslim Men to be Murdered as "Threats to the US"

"The CIA Hit List": Muslim Men to be Murdered as "Threats to the US"

You delight in laying down laws
Yet you delight more in breaking them
Khalil Gibran

Go To Original


"The CIA Hit List" is a media term for selected Muslim men to be murdered as threats to the United States. As President, Bush used the phrase for his list of "terrorist" suspects when the policy was first made public mid-December 2002. Names on the “hit list” surface, then recede so it is hard to be sure who is current. (1)

The Bush announcement, aware of prohibitions against assassinations in the executive orders of former presidents, designated the suspects as "enemy combatants" to avoid a direct confrontation with the laws of war (LOW) aka laws of armed conflicts (LOAC), which are binding on the U.S.(2). Media reports of Dennis Blair, the Director of National Intelligence, in testimony to the House Intelligence Committee February 3, 2010, make no mention of "enemy combatants" when he reserves the right to include American citizens as targets for murder.(3) Then on April 6, 2010 a spokesman for the intelligence community announced that Anwar al-Aulaqi, a Muslim cleric and American citizen is added to the CIA hit list.(4) The imam is known for his statements of faith on the internet. Because he is an American citizen Presidential approval was required for the death command. But more importantly, al-Aulaqi is a civilian.

To quote the International Covenant on Civil and Political Rights,(5) signed and ratified by the U.S. and now part of the Laws of War,(6)

"In countries which have not abolished the death penalty, sentence of death may be imposed only for the most serious crimes in accordance with the law in force at the time of the commission of the crime and not contrary to the provisions of the present Covenant and to the Convention on the Prevention and Punishment of the Crime of Genocide. This penalty can only be carried out pursuant to a final judgement rendered by a competent court.
"When deprivation of life constitutes the crime of genocide, it is understood that nothing in this article shall authorize any State Party to the present Covenant to derogate in any way from any obligation assumed under the provisions of the Convention on the Prevention and Punishment of the Crime of Genocide." (ICCR, Part III Article 6, #2, & 3).

Assassination of anyone is expressly forbidden in the Laws of War (Law of Land Warfare, Section 2, #31). Because this addresses State policies so clearly, both Presidents Ford and Reagan issued executive orders forbidding assassination. President Reagan's Executive Order 12333 (Dec. 4, 1981) states: “Prohibition on Assassination. No person employed by or acting on behalf of the United States Government shall engage in, or conspire to engage in, assassination” (Section 2.11). "Indirect participation is forbidden as well"(Section 2.12).(7) An attempt to counter the Executive order was proposed through legislation ( H.R. 19: Terrorist Elimination Act of 2001) which failed and again in 2003 which failed. This order remains in effect. As customary law it can't be superseded as law for executive convenience. Germany's Third Reich, for example, evolved convenient laws to strip Jews of the right to own property or work.(8) At liberation those "laws" were recognized as simply tactics of the genocide.

It is the declared policy of the the Department of Defense to "comply with the law of war."(9)

Anwar al-Aulaqi

Al-Aulaqi is a devout Muslim, born in and educated in the U.S.. He and his father, a former Minister of Agriculture in Yemen, say he isn't connected to al-Qaeda. Imam successively of three mosques in the U.S. he was arrested by the FBI in 2006 and released after they found no ties to al-Qaeda. He was on the Army's targeted list and target of a Yemeni / U.S. intelligence air strike on the house where he was supposed to be, killing thirty people.(10) It was against the law to target him, either as a civilian, or as an imam (chaplains are considered medical personnel).(11) It is a war crime to target a non-combatant under any circumstances. It was also against the law to kill thirty more Muslim civilians in a non-war zone.(12)

The U.S. considers al-Aulaqi an inspirational threat, "dangerous" since both Major Hassan, the Army psychiatrist who killed personnel at his station, and an alleged Nigerian attempted "bomber" of a Detroit bound plane, are said to have been influenced by his thinking. There are others. While there is extreme carelessness in assuming al-Aulaqi ordered crimes of violence, Dennis Blair, U.S. director of National Intelligence, has insisted that the intelligence community is "not careless" in killing Americans abroad.(13)

Al-Aulaqi is said to believe in a jihad against the U.S. in response to its war against Islam and Muslim people. There is evidence that the U.S. really is conducting a war against Islam. News sources quote al-Aulaqi as saying "I have come to the conclusion that jihad against America is a duty for me, as for every Muslim who can do it." A broad term, "jihad" does not specify violence or armed action, financial war as Libyan president Gaddafi recently announced against the Swiss, or a battle of cultures. Is it a crime for an imam to approve of jihad? Was the U.S. Civil Rights Movement song "You gotta do what the spirit say do" a death penalty offense? If al-Aulaqi bears arms or counsels others to bear arms against the U.S., then under U.S. law he has committed a serious crime. There is little specific evidence presented the public that al-Aulaqi has. He is a civilian entitled to a fair trial in civilian court. Within a military context, as a cleric he is a non-combatant. It is in all cases against the laws of war to target a non-combatant.(14)

The SITE Intelligence Group which monitors Islamic web sites and provides information to field forces and U.S. Defense agencies, brought to the public's attention al-Aulaqi's anti-American and pro jihadist statements on March 19, 2010. SITE's co-founder was the primary Canadian government witness, web-expert and translator at the recent Quebec trial of Said Namouh,(15) a Muslim from Morocco, arrested and sentenced to life in prison for conspiring to plant bombs in Austria. Namouh committed no act of violence. His computer hard drive, emails and web postings were culled by the witness, for "jihadist" materials which transformed him into an al-Qaeda "propagandist." SITE is an activist company with an agenda. The co-founder is an Israeli who has served in the IDF, and is a Zionist, with a parent hung by Iraq as an Israeli spy. Blackwater, infamous for its murder of civilians, lists SITE as an invaluable resource, and this private company-for-profit / intelligence group receives half a million dollars a year from the U.S. tax free. By selecting for its web site(16) instances of violent resistance from among the world's 1.6 billion Muslims, with statements of imams who protest the slaughters that other moral people don't dare protest openly, SITE offers, I think, something other than an impartial witnessing or presentation. Instances of 'web-terrorism' by extremists, are used for the political purposes of those who would wage war on Islam.

Al-Aulaqi is faulted for his associations with known "terrorists" and he is faulted for honest religious statements. The first implies guilt by association while it is the duty of clerics and chaplains to be open to those who seek them out. As for the honesty of al-Aulaqi's religious statements, the freedom to express these is guaranteed under U.S. law. Both the Constitution and American culture historically affirm both al-Aulaqi's religious freedom and his freedom of speech. It is extreme to sacrifice these for any government agenda, particularly a "war on terrorism." His freedom to think, believe, express thoughts / beliefs is furthered by international covenants, treaties, the laws of all advancing countries. Because a cleric states moral truths common to Judaism, Christianity, and ethics, a criminal U.S. policy finds itself threatened tactically as well as morally. If U.S. policy asks the American public and people of the world to accept rule by murder it should listen more closely to the morality of others. With no comfortable reason to arrest and try him, Anwar al-Aulaqi is to be murdered as an "inspirational" threat. In the case of each target on the CIA Hit List, extra judicial murder is a crime against humanity with no statute of limitations.

Public acceptance

It is an inappropriate response to murder people for hating America, especially as U.S. policy continues illegal massacres of civilians by drone attacks, aggressive military actions in civilian sectors, destruction of the infra-structures and the entire cultural fabric of victim societies. Current President Obama was elected to end the U.S. aggressive wars. It would be an appropriate response to change the policy.

Public understanding of what it means to murder people because they inspire others, is thoroughly buffered by context: since 1990 in Iraq millions of Iraqi Muslim civilians have been killed, mothers, fathers, children, who showed no ill will against America. That is partly what an "illegal war" means. Thousands of "combatants" and civilians were arrested in both Iraq and Afghanistan, clearly deprived of Geneva Convention rights in the instance of Guantanamo, tortured and detained under such extreme conditions their captors are liable for judgement under the laws of war and covenants for peace. Stripping a religiously defined enemy of human rights was a step toward this public call for murder by command. The order seems media-normal amidst a policy of war crimes against peoples who are Muslim.

Americans are aware that the "CIA hit lit" has been there a long time. Usually the crimes of power are covert. Evidence of CIA sponsored or executed extra judicial killing was apparent in U.S. policy operations against Lumumba, Castro, Allende,(17) among others. The operations of death squads throughout the Americas, a mode of operation consistently traced to the US School of the Americas, simply covered military operations. The threat behind CIA gathering the thousands of names of radicals, leftists, communists, dissidents, union leaders and organizers in every country where U.S. has corporate interests surfaced in Indonesia of 1965, as one example, with the military murder of over half a million “Communists” from lists provided the Indonesian military by the CIA.(18)

Openly marking al-Aulaqi for death because he is an "inspirational" threat, clarifies the deaths of other religious or "inspirational" leaders who faulted U.S. policies. El Salvador's Archbishop Oscar Romero ("I beseech you, I beg you, I order you, in the name of God, to stop the repression !") was murdered by an intelligence operation on March 24, 1980 while he was celebrating mass at a hospital. The murder is traced to Roberto D'Aubuisson, trained by the U.S. in security and intelligence (New York and Virginia 1971) and in communications (the School of the Americas, 1972). On December 2, 1980, two Maryknoll sisters and two Ursuline sisters, were raped and murdered by the Salvadoran military covered by U.S. officials. The Sisters were Americans working for the Catholic Relief Services. Their names were Dorothy Kazel, Ita Ford, Jean Donovan, Maura Clarke.(19) On Nov. 16, 1989, six Jesuit priests, a cook and her daughter, were murdered by a "death squad," a euphemism for regular operations of ANSESAL and the military. Ignacio Ellacuria was rector of the university, Ignacio Martin-Baró vice rector, Segundo Montes a professor, Arnando López a professor, Juan Ramón Moreno a program director, - all five born in Spain, and Joaquin López y López director of a humanitarian assistance program, Julia Elba Ramos a cook, her 15 year old daughter Cecilia Ramos were shot between two and three in the morning.(20) El Salvador's Truth Commission found responsibility lay with named upper level officers of El Salvador's U.S. supported military, and "businessmen."(21) The victims' inspirational crime was supporting the poor. The murders of those well known are moments in a sea of blood. From "death squad" and overt military rule in the Americas since the Sixties, the perpetrators of the crimes have been identified and in some cases prosecuted, often not, but the CIA programs remain unmentioned, the context of US policy and agenda protected. The US operatives, the diplomats, the conduits of funding to the death squads and client governments effecting the policy remain untouched even when names and responsibility are known.(22)

The covert claim to absolute power over citizens of other countries, is now familiar enough for the CIA to allow surfacing of its hit list, not a new policy but the overt continuation of an old policy. It is publicly claiming the right of the American government to murder anyone.

U.S. Military Law

The words “capture or killing” puts the crime in the language of war, although military law is in fact particularly careful about who can be targeted.(23)

Military law is also entirely aware of Nuremberg and the uselessness of "I was just obeying orders" defense. Military law is codified in the Uniform Code of Military Justice which is federal U.S. law for those in the service or working with the military.

The US Military Uniform Code of Justice states it is the soldier's duty to obey a lawful order. Refusal in wartime can mean the death penalty.(24) But repeatedly the UCMJ reads, a “lawful order” must be obeyed. Which means to a rational mind that an unlawful order does not. The UCMJ itself offers little guidance about where to draw the line between an unlawful order and a lawful one, other than the obvious. Because the obvious is not spelled out it is no less obvious. Recent military law attempts to place determination of the lawfulness of the order, with a military court judge.(25) It is not likely to end there. The military court is increasingly responsible to the Law of War, and the War Crimes Act of 1996 allows military personnel to be charged in federal (civilian) court for "grave breaches of the Geneva Conventions" among other crimes.(26) And in areas under its domain the International Criminal Court doesn't require accession to the ICC court, to prosecute.

Because the U.S. military now serves in regions which involve crimes of command such as aggression, the judicial arm of the military is increasingly concerned with international law. Current Department of Defense manuals on the law of war, advise judge advocates of not only the Geneva Conventions signed by the U.S. but the Optional Protocols, unsigned but which have become customary law, and applicable.(27) While disobeying an unlawful order is a dangerous decision, it is a recognized alternative, there because it is necessary.

The Uniform Code of Military Justice steers questions of right and wrong to its Punative Articles dealing with crimes against the military system, including crimes one finds in civilian courts - drunken driving, rape, manslaughter, etc.. The UCMJ avoids direct interface from within with the Geneva Conventions and the Laws of War / Laws of Armed Conflict (LOW & LOAC), except notably in Article 18 which gives court martial the right to try war crimes. This would include breaches of the Geneva Conventions and other Laws of War.(28) By application of Geneva Conventions and the other instruments of international law which military courts must consider, a war crime (or "crime against humanity" if part of an agenda or series of war crimes), is prosecutable. Anyone ordering a war crime is issuing a "patently unlawful order”.

Ordering extra-judicial killing of possibly eight or nine Muslim men, and in particular the cleric Al-Aulaqi, the U.S. finds itself using a mechanism of the German Nazis in preparing Germany's home front for war: the dehumanization of a religious and ethnic group. Extreme deprivations of human rights is dehumanization. Dehumanization is always a requisite for mass murder and genocide, and reveals its pre-meditated intention.(29)

What is unacceptable about ordering the killing or capture of al-Aulaqi is not simply that he is an American citizen but that he is a Muslim of a group suffering a series of war crimes. More profoundly he's an innocent human being until proven guilty. The repetitiveness of war crimes against so many Muslim people moves the entire area of individual crimes against Muslims into a crime against humanity. It continues a progression depriving people of their rights and getting away with it because they are Muslims, even when they are Americans, and as such bear some responsibility for the crime. Psychologically this drives a targeted group to opposition.

The engineering of sides in this “war” of corporate military acquisition is attempting genocide.(30) The targeted victim group among others, has a moral right to resist. Survival is its human right. U.S. policy and media perception management have dehumanized large groups of Muslims by illegal mass slaughters in the wars on Iraq and Afghanistan, the denial of long standing human rights to prisoners / suspects, so the legal rights of Muslims in vulnerable areas are removed. Al-Aulaqi's rights have been removed because of his beliefs.

Increasingly human rights form the matrix of a functioning society. International laws and the laws of progressive countries reflect this. In the U.S. the new Law of War Documentary Supplement to the Law of War Handbook (2008) intended for judge advocates, begins to write into U.S. military judicial code international law far in advance of U.S. domestic law. Customary laws accepted by many nations are becoming conventional (codified) law. There is at least a practical understanding that where military decisions exclude humanity they lose the good faith necessary to laws of war that protect both sides.

The interface of Public International Law (law of armed conflict and international covenants, conventions and treaties binding on every nation) with the U.S. military justice system suggests eventual radical change. The interface is also in place within Canadian Law, but at this point rarely active. In both instances, application of international law within a domestic context limits capitalism by limiting the ugliest means of imposing power. Possibly for this reason corporately controlled politicians criminalize the U.S. military with wars of aggression.


There is a history of men and women trying to explain to power that you can't kill faith, or ideas, a sense of justice, a hunger for the good. The ancient cultures from Indo-Europe and Persia are highly civilized. Resistance survives. It isn’t simply the resistance of Islam, or an interpretation of the Koran, or a sect. The need is for freedom to follow one's way. It is the survival of faith, of the early Christians in Rome, of Toussaint L'Overture, of Louis Riel, the refusals of the Warsaw ghetto, of Ho Chi Min, of Jean Moulin, John Brown and Thoreau, of Beauregard as well, of Simon Bolivar, Fidel, of a revolution America has dreamed of. Among the thousands on thousand moments in history when the arrogance of oppression overwhelms its respect for life, there is resistance.

By placing a Muslim American within its realm of slaughter, simply for stating his beliefs and suggesting they are worth dying for, this U.S. Policy breaks faith with humanity. Americans have already lived through the murders of so many of our own religious leaders. Dr. Martin Luther King Jr.(31) was only an American. His freedom of thought and faith became a threat to government waging war in Vietnam. An “inspirational" threat. Malcolm X was only an American, an inspirational threat and visionary. There were so many unexplained unjustified deaths of Americans through the Sixties, men and women of good name or nameless, who believed in humanity. Some wore the uniform. The crime proposed against Anwar al-Aulaqi is part of a much larger American crime that remains unacceptable and leaves no family untouched.

The concern isn't only the order to kill Anwar al-Aulaqi, which I believe is a patently illegal order. (32) A U.S. policy of "war" has created a norm of unjustified killings. The victims are often innocent and unforgettable. The policy places those in the military and related services, the CIA, the contractors, people who are "just following orders," outside a human community and beyond the protections of law. With any concern for human life the order should be cancelled.


1 Philip Gerardi, "Deep Background: Assassinating Americans"(March 28, 2010), Global Research News. Gerardi indicates the name of another American on the hit list, Adam Perlman (Adam Yahiye Gadahn). A Jewish Christian from the West coast, convert to Islam at 17, he is considered an aide to Bin Laden, a "propagandist" encouraging Pakistani fundamentalists.
2 United States Constitution. Article VI (2). "This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land..."
3 Andrew Buncombe, "Bush gives CIA 'hit list' of senior terrorists" (Dec. 16, 2002), Independent.
4 Greg Miller, "Muslim cleric Aulaqi is 1st U.S. citizen on list of those CIA is allowed to kill" (April 7, 2010), Washington Post.
5 "International Covenant on Civil and Political Rights" (Dec. 16, 1966), United Nations Treaty Collection on the Internet. This is currently included in Law of War Documentary Supplement (2009), International and Operational Law Department, The Judge Advocate General's Legal Center and School.
6 Laws of War Handbook 2005, International and Operational Law Department, The Judge Advocate General's Legal Center and School [access:< >].
7 Elizabeth Bazan, "Assassination Ban and E.O. 12333: a Brief summary" (Jan. 4, 2002), CRS Report for Congress.
8 The Black Book: the Nazi Crime Against the Jewish People ( New York, Nexus Press, 1981),. pp. 89-110.
9 "The Armed Forces of the United States will comply with the law of war during all armed conflicts, however such conflicts are characterized, and, unless otherwise directed by competent authorities, the US Armed Forces will comply with the principles and spirit of the law of war during all other operations." Chairman of the Joint Chiefs of Staff Instruction, CJCSI 5810.01B (25 March 2002).
10 Andy Soltis, "'Fort Hood' Imam blown up: Yemen" (Dec. 25, 2009), New York Post. In fact, Al-Aulaqi survived. A previous AP report notes Aulaqi's wife and 5 children were with him at an unknown location: Ahmed al-Haj & Donna Abu-Nasr, "US imam who communicated with Fort Hood suspect wanted in Yemen on terror suspicions" (Nov. 11, 2009), San Francisco Examiner.
11 Chapter 7, "Means and Methods of Warfare," Section 3, B, 2, C,c., Laws of War Handbook 2005.
12 Section 3, B, 2, a, Ibid..
13 "Obama Administration Approves Killing Americans Abroad" (April 5, 2010),
14 Section 3, B, 2, Laws of War Handbook 2005.
15 J.B.Gerald, "suppressed news," Night's Lantern [access:< >].
16 Site Intelligence Group [access:< >].
17 David Pallister, "Leaders on the CIA's hit list" (March 21, 2010), The Guardian.
18 David Ransom, "Ford Country: Building an Elite for Indonesia," The Trojan Horse: A Radical Look at Foreign Aid (Palo Alto, Ca: Ramparts Press, 1975 revised edition), pp. 93-116 [access:< >]. See also my "Essay on State Terrorism" (1991) Night's Lantern [access:< >].
19 "Dorothy Kazel," Wikipedia.
20 Lee Hockstader and Douglas Farah ,"6 Priests, 2 others slain in San Salvador" (Nov. 17, 1989), Washington Post Foreign Service.
21 "Illustrative case: the Murders of the Jesuit Priests," Report of the UN Truth Commission on El Salvador (March 15, 1993), pp. 45-54.
22 Leads for verification: Ralph McGehee, "CIA Support of Death Squads," Serendipity carries an extensive CIA research database.
23 See Chapter 7, "Means and Methods of Warfare," Laws of War Handbook 2005, passim.
24 Article 90. 2, and Article 92, Uniform Code of Military Justice [access:< >].
25 18 U.S.C.5 2441 and amended 1997.Laws of War Handbook 2005, p.223.
26 A recent clarification: "Preface," Manual for Courts-Martial United States (2008 edition), Joint Service Committee for Military Justice. USAPD, Unclassified PIN 030567–000.
27 Ibid..
28 Ibid..
29 U.S. ratification of the Convention on Genocide and its subsequent policy stress the necessity of "intention" for its definition of genocide to be committed. Realistically, the definition of "intent" remains subject to the interpretation of an international court.
30 See J.B.Gerald, "When the 'War on Terror' Becomes Genocide"(2010) [access:< >].
31 To consider the murder of Dr. Martin Luther King Jr. (and others) within context of a U.S. covert (military related) operation, see J.B.Gerald, "Essay on State Terrorism" (1991) [access:< >].
32 Article 90, "Explanation," 2, a, i,UCMY, Manual for Court Martial United States (2008 edition) [access:<>]. See also Article 89 "Explanation" (5) and Article 92, ibid..