Fascism is the union of government with private business against the People.
"To The States, or any one of them, or to any city of The States: Resist much, Obey little; Once unquestioning obedience, at once fully enslaved; Once fully enslaved, no nation, state, city, ever afterward resumes its liberty." from "Caution" by Walt Whitman

Thursday, October 21, 2010

2010-10-21 "Rap Star or Gang Member?" by David Greenwald from "Davis People's Vanguard" and "Yolo Judicial Watch"
Two weeks ago we had an article on the problematic nature of expert testimony by the gang expert in the case of Michael Romero. For the last few weeks we have seen the testimony of the plaintiff's gang experts in the Gang Injunction Trial.
First, Joe Villanueva took the stand as an expert. Detective Villanueva currently works on the City of Fairfield gang unit, but up until the end of 2007 headed the Yolo County Gang Unit.
This week, the current head of the gang unit, Sgt. Jason Winger, has taken the stand in the gang injunction case.
One of the big questions is the nature of expert testimony. Expert witnesses are allowed to render opinions. In this case, both experts have rendered opinions about whether an individual is or is not a gang member. Their expertise is based both on formal training and street experience, but at the same time we have seen some of the limits of their knowledge and, as importantly, the inability to put the information gathered on the streets into proper context.
This latter problem is particularly true for Sgt. Winger, as we have seen this week under direct examination from Deputy DA Jay Linden.
We have already previously discussed Sgt. Winger's testimony on the Ornelas case which is not consistent with the facts that were presented at trial. But there are a few other key points that need to be raised about the nature of Sgt. Winger's expert testimony.
Much of this week, Sgt. Winger has gone through name by name, explaining why each individual listed is a gang member. His assessment is based on a standard of the totality of the circumstances, which is an interesting standard in that it would appear to give more objective consideration to the determination of gang status than a simple on-the-street determination that many jurisdictions use.
Indeed, West Sacramento might appear to have a more rigorous standard as the determination of validation goes up the chain of command within the department for approval, but it still falls well short of any proceeding that might take place in the court room. As we will see shortly, this standard is often based on misreading evidence, and can fall woefully short.
Two points that Sgt. Winger made stand out. First, at one point, he was asked to read from "documents" found on the scene at the home of one purported gang member, Manuel Guzman. He read from this "document" and it became very clear that Sgt. Winger was reading from rap lyrics.
Taken out of context this would be very damning, as it made reference to killing and the gang life, with specific references to West Sacramento, Broderick and the like.
The problem, as one of the defense attorneys objected, is that this appears to be gangster rap lyrics. As such, the lyrics are not shocking but rather quite typical of a genre of music that regularly makes reference to, and even glorifies, the gang life and culture.
Does that make Mr. Guzman a gang member? Only if you believe that all rap stars are gang members. And the "totality of the circumstances" argument could fall well short here, as certainly many established and aspiring rap stars have lyrics like these and items in their home that could be interpreted as gang "indicia." More on that shortly.
The problem is that you have middle-aged individuals, most of them white, trying to make sense out of a culture that they have never been a part of and likely do not understand. Lacking that understanding, one can misinterpret one's clues.
And yet this is an expert witness, but it seems possible that he has never listened to rap music in his life. Certainly , he has little understanding of a popular Hip-Hop culture and subculture that have come to glorify the "gangsta" lifestyle, and have incorporated and even co-opted gang symbols and slogans.
This point comes out again with Carlos Guzman, who purportedly has a tatto across his chest with the writing, "Can't Stop, Won't Stop."
According to the expert Sgt. Winger, that is a gang saying pertaining specifically to the Norteno gang, which stands for can’t stop the gang life and won’t stop the gang life.
Sounds convincing right? Now google the term and you find out something very interesting. First of all, no reference to gangs in the first several pages. Instead you find a number of songs by the name, including one by Lindsey Lohan.
We find a New York Daily News story from May 9, 2010 that reports that "New Lindsay Lohan song, 'Can't Stop, Won't Stop,' leaked online." We can even watch her video .
We also know that title is an influential book on the Hip Hop industry by Jeff Chang .
So is this a gang slogan, or just a pop culture reference? Does Sgt. Winger even know? This gets to the very point, he may know a bit about gang members, but he seems to lack a broader perspective that would enable him to perhaps properly identify what he is seeing and put it into context.
These may seem like small details, but they are very dangerous, potentially, as we saw on Frontline this week in their feature on Cameron Todd Willingham. He was convicted of setting an arson fire that killed his three children in Texas, was executed, and new forensic evidence demonstrates that the fire was not arson.
What we see, in part, is a combination of police and investigators misreading the clues and the totality of the evidence. Investigators argued that Mr. Willingham was a satan worshiper and suggested that the burn patterns in the children's room showed a pentagram. They also found posters that depicted satanic images.
However, later forensic investigators dispute much of that evidence. The pentagram that the investigators thought they saw was actually created by the windows and door in the room and the ventilation patterns. Meanwhile, the posters that were supposedly satanic images were actually posters from the band, Iron Maiden, a heavy metal band that Mr. Willingham was a fan of.
Iron Maiden does in fact use such images, but they were a popular band in the 1980s and early 1990s for heavy metal fans, most of whom were not Satan worshipers. In short, the conclusions that the police investigators reached were flawed, despite looking at the totality of the evidence.
Rap music may be popular among gang members, but it is also popular among non-gang members. Rap lyrics often depict fictionalized accounts that glorify the gang life. Popular rap musicians may rap about killing people, but that does not mean that they have killed people or even desire to kill people.
Unfortunately, we have a group of people who probably have little exposure to or understanding of such culture, and who are in charge of this case. They may know the law, but the key question that the Judge in this case has to look at is the facts of this case, and that is based not just on the law but also the evidence, and it is contingent upon her ability to weigh that evidence.
When you have a gang expert who may lack the perspective to place evidence into proper perspective, that creates a problem.
Unlike Sgt. Winger, Joe Villanueva, at least, is somewhat steeped in the culture. He testified that he had grown up in the Salinas Valley, in an area with many Norteno gang members. Detective Villanueva testified that he learned about Hispanic Gangs when growing up, about the general structure of the Norteno Gang, and he knew many during his formative years.
But as Detective Villanueva testified, we also discovered that there were limits to his knowledge. For instance, he does not appear to understand gang laws. He did not understand the difference between 186.22(a) and 186.22(b)(1), believing that both were gang enhancements.
In fact, 186.22(a) is not an enhancement, but the stand-alone crime. The statute reads, "Any person who actively participates in any criminal street gang with knowledge that its members engage in or have engaged in a pattern of criminal gang activity, and who willfully promotes, furthers, or assists in any felonious criminal conduct by members of that gang, shall be punished by imprisonment in a county jail for a period not to exceed one year, or by imprisonment in the state prison for 16 months, or two or three years."
Whereas in 186.22(b)(1), "Any person who is convicted of a felony committed for the benefit of, at the direction of, or in association with any criminal street gang, with the specific intent to promote, further, or assist in any criminal conduct by gang members, shall, upon conviction of that felony, in addition and consecutive to the punishment prescribed for the felony or attempted felony of which he or she has been convicted..."
186.22(b)(1) thus requires that the individual commit a felony "for the benefit of" or "at the direction of" a criminal street gang, and imposes an additional sentence, over and above the sentence for the crime.
While Detective Villanueva is not a lawyer, as a gang expert, he should at least know the difference in the sections of the law.
This is not the only problem with Det. Villanueva's testimony. Throughout his testimony, Det. Villanueva has stated that he is an expert based on his contacts with gang members, rival gang members, contact with the community, courses he has taken for his Masters, and training he has received as a police officer and gang detective.
However, his understanding of the Norteno gang and Nuestra Familia has some critical holes in it. For instance, defense attorney David Dratman asked him what the letters in the word, "Norte" represent. Det. Villanueva apparently did not understand the question, responding vaguely that the word means north in context with the gang.
Mr. Dratman asked if Det. Villanueva had ever heard the meaning of the letters as, "Northern Organized Raza Towards Equality?"
Det. Villanueva, the gang expert responded, "I have never heard that before."
Small point? Perhaps. But the broader point here is the criteria for expertise is quite limited and subjective. During trials, a psychiatrist or other professional would have to furnish professional degrees, which certify a proficiency of knowledge. However, while gang experts' testimonies are given similar weight, there is no certification of knowledge, there is little quality control.
The expert witness, here, stipulates to having taken a couple hundred hours of training in a specialized field, and the rest of the expertise is simply knowledge accumulated on the ground. There is nothing wrong with experience, but experience also has its limits and it prevents people, perhaps, from gaining perspective that is needed to actually analyze what it is that they have witnessed. And yet, they are being called up to do exactly that - analyze and offer opinions that supposedly provide the court testimony with greater weight than that from the average witness.

Monday, October 11, 2010

Monopolized Capitalism is now evolving, and is being guided principally by robots.
Stalin could not match this type of efficiency, and worse, the power is in the hands of the worst humans on the Planet whose only concern is the accumulation of money above all concern such as "human rights" and "ecology"...

2010-10-11 "How Speed Traders Are Changing Wall Street" by Tom Anderson from "CBSNews"
It may surprise you to learn that most of the stock trades in the U.S. are no longer being made by human beings, but by robot computers capable of buying and selling thousands of different securities in the time it takes you to blink an eye.
These supercomputers - which actually decide which stocks to buy and sell - are operating on highly secret instructions programmed into them by math wizards who may or may not know anything about the value of the companies that are being traded.
It's known as "high frequency trading," a phenomenon that's swept over much of Wall Street in the past few years and played a supporting role in the mini market crash last spring that saw the Dow Jones Industrial Average plunge 600 points in 15 minutes.
Most people outside of the industry know very little, if anything, about it. But the Securities and Exchange Commission and members of Congress have begun asking some tough questions about its usefulness, potential dangers, and suspicions that some people may be using computers to manipulate the market.
For 150 years, the floor of the New York Stock Exchange was the center of the financial world, the economic engine that helped American business raise capital and create jobs.
Today it is still the public fa├žade of Wall Street, and a television backdrop for reporters relaying financial news. But less than 30 percent of the trading is conducted there now, and the specialists and the noise of the floor is being replaced by the speed and quiet efficiency of computers, and the action has moved elsewhere.
There are now more than 80 alternative trading systems around the country, plus two brand new electronic stock exchanges which most of you have probably never heard of: BATS and Direct Edge.
They're owned by the big banks and by high frequency trading firms, and neither of them would give "60 Minutes" an interview or let us inside to film their operations, but they trade more than a billion shares a day at blinding speed, and most of those bets are being made by machines.
The players range from firms like Goldman Sachs, Barclays, Credit-Suisse and Morgan Stanley to hedge funds and smaller operations like Tradeworx, which is the only high frequency trading firm that would talk to us or let us in.
It's run by Manoj Narang and a small group of mathematicians and scientists called "quants," which is short for quantitative analysts. Their high speed computers trade 40 million shares every day.
Asked if humans are ever involved in the trading, Narang told correspondent Steve Kroft, "Humans are not involved in the trading because humans are way too slow to trade on the kinds of opportunities that we're trying to capture. We're trying to capture opportunities that exist for only fractions of a second."
The Tradeworx computers don't care where a stock is going to be trading next year, next month, next week or even tomorrow, because they are going to be in and out of it on the same day, in a matter of minutes.
"What's the point of buying and selling a stock that you hold for three minutes?" Kroft asked.
"Same objective that all other participants have in the market, is to make money. You buy low, sell high, that's how you make money," Narang said.
"And the computer will know when to buy and when to sell?" Kroft asked.
"Sure, the computer is monitoring real-time data and it knows what to do with that data and how to make decisions based on that," Narang replied.
What Narang and other high frequency traders tell their computers to do is to make a profit of a penny or less, 40 million times day.
They scan the different exchanges, trying to anticipate which direction individual stocks are likely to move in the next fraction of a second based on current market conditions and statistical analysis of past performance. But the computers have no real understanding of who these companies are and what they do.
The computer doesn't know or care whether a company is well managed. "It doesn't know who the CEO is or what that CEO's background is. Doesn't know the management team," Narang said.
"Whether he's going through a divorce?" Kroft asked. "Whether he's just been sued for sexual harassment?"
"Right. It knows information that you can quantify about the company," Narang explained.
Asked if it's all math, Narang said, "It's all probability and statistics - a procedure that you can define precisely."
The trading instructions are programmed into the computers with complicated mathematical formulas called algorithms. Narang showed us how it works with a simple, hypothetical example he uses for demonstration purposes.
"I'm gonna test a strategy where if a stock went down five percent for the past week, I'm going to buy $5 of that stock. And if a different stock went up ten percent last week, I'm going to sell $10 of that stock. And I'm gonna do that for every stock that's in my tradable universe simultaneously," he told Kroft.
"Which is how many?" Kroft asked.
"There's over 4,000 stocks, about 4,500 stocks," he replied.
The strategy, which could only be successfully executed with a high speed computer, would result in almost as many losing trades as winners, but over the past eight years would have produced a tidy profit - something that Narang and other high frequency traders have gotten used to.
Asked how successful he and his firm have been, Narang told Kroft, "We've had two or three days in a row where we lose money. But we've never had a week, so far, where we lost. We've never had a month that was a loser for us."
Just four years ago, high frequency traders accounted for 30 percent of the stock trades in the U.S. Today, estimates range as high as 70 percent. And institutional traders, like Joe Saluzzi of Themis Trading LLC, have come to believe that the game is rigged.
"How can you make money day after day? There was even one firm that said they made money four years in a row every single day. Well you have to be getting information that other people don't have, otherwise statistically that's an impossibility," Saluzzi said.
Actually, high frequency traders are getting the same market information that Saluzzi gets. They are just getting it a little bit sooner - it's only a few fractions of a second sooner, but if you are running supercomputers, Saluzzi says, it can be an eternity.
"What you're saying is the people with the fastest computers have an advantage? They get the best deals?" Kroft asked.
"Every time. Absolutely. There's no doubt about it. I mean, if they're spending that kind of money, and they're using that type of infrastructure, they're doing it for a reason. And it is to get a speed advantage, in that respect," Saluzzi replied.
It's not just the speed of the super computers that's important - it's also their physical location. The closer they are to the stock exchange's server the quicker they will be able to get critical market information.
Larry Leibowitz, the chief operating officer of the New York Stock Exchange, believes its massive new data center in Mahwah, N.J. will help the exchange regain some of the market share it has lost to electronic trading platforms. And he is busy persuading traders to lease space in the center's stark black boxes for their super computers.
It's called "co-location," a service that high frequency traders will pay tens of thousands of dollars a month for, and includes access to raw data from the exchange that is almost instantaneous.
"We're getting down to, you know, 'How fast can the electrons travel at this point?'" Leibowitz explained.
"They can predict the price of a stock before you can, because of the speed that they're using," Joe Saluzzi told Kroft.
"So, they actually see the trades before you do?" Kroft asked.
"They can see order flow coming into the exchanges before a regular person off of say a Bloomberg or somebody who doesn't have the co-location, the data feeds, and all the other sophisticated technology that they employ. Which is not cheap, by the way, it's extremely expensive to set these things up," Saluzzi said.
Asked how much faster they see it, Saluzzi said, "It could be a few milliseconds."
"How much of an advantage is a couple of milliseconds?" Kroft asked.
"Millions, if not billions of dollars a year," he replied.
That edge, Saluzzi claims, has made high frequency traders the new insiders on Wall Street, and he says he spots signs of predatory behavior every day. Saluzzi, who trades large blocks of stock for institutional investors, says the supercomputers are programmed to place and then cancel thousands of orders a second, trying to sniff out which way a market is moving in order to jump in ahead of big rallies and sell off before big declines. He calls them parasites who exploit a technological advantage to suck money out of the market and add no value.
Asked if high frequency trading raises capital for companies, Saluzzi said, "Absolutely not. If anything, it's distracting from the capital raising process."
"Do these high-frequency trades have anything to do with market fundamentals?" Kroft asked.
"Valuation is irrelevant. It's all about just moving the price up and down the ladder all day long. Each day is new. Each day starts fresh. So, you have to question the true valuation of the markets now," Saluzzi said.
Larry Leibowitz of the New York Stock Exchange says there is absolutely no evidence that small investors are being hurt by high frequency trading. Most of them, he says, don't care about pennies when they are buying and selling stocks. And they're in it for the longer haul.
"Look, there's always been charges for as long as trading has existed that people are front running orders, manipulating stocks. This is nothing new. I think now you add to it the element of the mysterious element of 'the computer' and it makes people even more mistrustful," he told Kroft.
Leibowitz and other proponents of high frequency, high speed computer trading say it has performed a valuable function: tripling volume, reducing stock spreads and transaction costs, and providing liquidity to the markets.
"Liquidity means that if you want to buy or sell a stock you could do it right away, and you could do it at a fair price. That's what liquidity means. And without short-term traders, there is no liquidity," Manoj Narang explained.
Traders like Narang say their presence in the market is making it cheaper and easier for everyone to buy and sell stocks, but regulators and lawmakers like Senator Ted Kaufman of Delaware have other concerns.
"Clearly, liquidity's way up. But what I say is, liquidity's always trumped by transparency and fairness. You can't have fairness if you don't have transparency," Sen. Kaufman explained.
Kaufman, who has both business and engineering degrees, says he is a big fan of technology but he thinks it's gotten way ahead of financial regulators' ability to monitor it. Right now, it's not even possible to determine for sure who is making high frequency trades or what they are telling their computers to do.
"We don't know what's going inside those boxes. There's all types of allegations about what's going on inside there. And basically what can happen is you can have these meltdowns where you can have a computer just go crazy and cause all kinds of problems," the senator said.
Which takes us back to the mini crash on May 6, and one of the scariest rides in stock market history when the Dow Industrials at one point plunged 600 points for no apparent reason.
Turns out it was triggered when a mutual fund's computer dumped $4.1 billion of securities on the market in a 20-minute period, which were then gobbled up by the computers of high frequency traders and sold almost immediately, sending other computers and traders heading for the exits.
"The events of May 6th scared people. I don't think there's any question about that," SEC Chairman Mary Schapiro told Kroft.
Schapiro had already proposed rule changes before May 6 that would allow regulators to track and tag high frequency trades and she is now considering further measures.
"Are you comfortable with computers making 50 to 70 percent of the trades on Wall Street?" Kroft asked.
"One of the concerns is, if one goes wrong, if it operates in an unexpected way, given market conditions, what's the impact of that algorithm that has behaved in an unexpected way, on lots of other investors in the marketplace?" Schapiro replied.
And Schapiro says it has happened since the May 6 crash, after circuit breakers were put in place that automatically halt trading in a stock that moves more than 10 percent in a five minute period.
"A number of times that those circuit breakers have been triggered has been because an algorithm operated in a way nobody intended for it to, causing a stock price to go wildly out of range," Schapiro said.
The crash contributed to the crisis in confidence on Wall Street. Since last spring, people have pulled $70 billion out of mutual funds and the biggest concern of Schapiro and Senator Kaufman is that average investors have lost faith in the integrity of the system.
"Is that correct?" Kroft asked the senator.
"Yes, that's true. Correct. And I'll give you an example. When I was at Wharton, [a] professor came and he said, 'You know, there's a river of wealth that runs through this country.' He said, 'A very small number of people know that it exists. Some people can stand on a high hill and see it off in the distance. Some people can get up on the edge. And there's other people are swimming in it.' That's the perception American people have about what's going on Wall Street right now. They believe there's a small number of people who are swimming in this river of wealth," Kaufman replied.
"There are a lot of people out there who think that the stock market is rigged. Rigged in the sense…that there are people out there who have advantages, the insiders, the big companies?" Kroft asked Larry Leibowitz.
"Right. Yep. And I think that we have to do a better job of, first, obviously making sure it's not the case," he replied. "But we can't be evasive about it. We have to make changes that make sense, that give people more confidence in the market, add more transparency, and make people feel like, 'This is a place I can trust my retirement savings to.'"