07/01/2015 12:33 PM

Relentless Terror

The Everyday Horrors of the Islamic State

By Uwe Buse and Katrin Kuntz

Photo Gallery: State of Tyranny


Eighty lashes of the whip for alcohol. Amputation for theft. Crucifiction for robbery. These are only a few of the draconian punishments employed by the Islamic State, according to documents and the testimony of witnesses obtained by SPIEGEL.

In late June, images made their way around the world of four men as they were locked in a car and killed with a rocket-propelled grenade. They showed seven men, chained together with explosive necklaces, as they were blown up. And they provided evidence that five men had been locked in a metal cage and lowered into the water to drown. As we learned last week, 16 men in total were murdered in these brutal ways. We know this because the executioners with the group calling itself "Islamic State" wanted to film their victims as they were dying.

The films, carefully staged and distributed using all modern channels, seem to be coming directly from hell. The men who see themselves as the new caliphs are performing an unparalleled dance of death, complete with the kinds of horrors once depicted by painter Hieronymus Bosch -- only these killers and executioners are anything but fiction. In Syria and along the Tigris and Euphrates Rivers in Iraq today, where human civilization once began, it is not some nightmarish fictional characters at work, but real players in contemporary history with a megalomaniacal agenda. And instead of covering up their murders, they are doing the opposite -- inviting the rest of the world to look on, proud of a brutality that knows no bounds and is both part of their military strategy and an instrument of oppression.

The Islamic State is both fact and fiction at the same time. It has clearly created a propaganda bubble, but it also represents a new social order in places where it has come into power. The "caliphate" was proclaimed about a year ago, and the older group ISIS (Islamic State in Iraq and Syria) has become IS, often referred to as Da'ish in the Arab world. But all of these names refer to the same thing: a militant movement with its origins partly in the Iraqi prison camps run by the Americans, which grew into al-Qaida in Iraq and now, as IS, is claiming territory for a new state, territory captured by former top figures in the regime of dictator Saddam Hussein.

In truth, the Islamic State is nothing but a claim. On closer inspection, it is merely an irregular occupation regime without a cohesive country to call its own. IS controls cities, such as Raqqa, Ramadi and Mosul, and it has infiltrated and now controls villages in Syria and Iraq. But there is also a paucity of verifiable facts.

Any reporter who dared to enter Raqqa to investigate the situation there would be in the kind of mortal danger that no reputable news organization can justify. Those who go there anyway, like former German lawmaker and author Jürgen Todenhöfer -- whose new book "Inside IS - 10 Days in the 'Islamic State'" is currently at the top of the SPIEGEL non-fiction bestseller list -- are at the mercy of their hosts and are only permitted to ask subservient questions. But there are other paths into the sinister realm, access through back doors and the underground. For example, not all telecommunications lines have been disconnected yet, and it is sometimes still possible to communicate by phone, Skype or text message.

Courageous Efforts

Most importantly, there are groups of committed people who have made a point of documenting all IS activities, both virtual and tangible. There is opposition in the occupied areas, and there are courageous individuals who are determined, despite danger to life and limb, to keep the hope of a different life alive and, in the meantime, to use sound, images and text to record everyday life under IS. It is because of these people that SPIEGEL is able to provide the insights into daily life under IS that are described in this article.

We were able to establish contact with people in Mosul and Raqqa -- in other words, people living inside the Islamic State. We remained in contact with them on a regular basis. Some kept diaries for us, and we compared their statements with the accounts of people who have managed to escape the terror zone, with video material and with documents.

This article is based on conversations with IS militants captured and taken prisoner by Kurdish troops. We also listened to the accounts of Yazidi women in various refugee camps in Kurdish territory who had been kidnapped and enslaved by IS militants. We were able to speak with political activists with the campaign Raqqa Is Being Slaughtered Silently, who are risking their lives by publishing material from Raqqa and nearby villages.

We pursued this project in the knowledge that all information about IS is subject to considerable skepticism. When it came to documents that allegedly originated with IS itself, SPIEGEL consulted with experts from the London-based Quilliam Foundation and the Middle East Forum in Philadelphia to evaluate their quality and authenticity. Quite a few documents were eliminated as fakes.

The question of how to handle the copious number of documents that IS produces to justify its actions is a difficult one. As is common in dictatorships, IS, like some meticulous bookkeeper, also appears to be sorting and documenting the various missions of its Islamist killers. In some cases, the acts of terror are carefully organized and presented in the form of graphics that could just as easily be part of the annual report of a sophisticated mail-order company. Clearly facts and propaganda are being mixed together here, and yet these IS records are also documents of comtemporary history worth analyzing. Some of them are reminiscent of a dark satire, and yet they are no longer a laughing matter.

Surviving in Mosul, Iraq

When the Islamic State arrived in Mosul, many thought they would bring order to the Iraqi city. Instead, every aspect of life has become suffocated in the flood of prohibitions. The regime celebrates its power with draconian punishments and stages public executions with the sword like some everyday banality.
 
It is difficult for Ibrahim Aziz (whose name, like those of the Yazidis and the citizen journalist from Raqqa described in the following sections, has been changed) to frame this one sentence.

Today, in the 12th month since IS seized power here with its black terror, it sounds so absurd, naïve and ambiguous. This is the sentence: "My wife and I, we welcomed the arrival of the Islamic State in Mosul."

Aziz is a middle-aged technician, a family guy and a man of numbers, with only a moderate interest in politics. He has spent most of his life in Mosul, where he grew up during the Saddam Hussein dictatorship. But then he was reluctantly forced to learn to live with anarchy during the 12 years that have passed since the international coalition arrived. He had to come to terms with the everyday crime that spread across Iraq as the country disintegrated, with the muggings, blackmail and abductions, and the seemingly random murders in the streets of his city, which the police treated with indifference and severely tested Aziz's faith.

The perpetual chaos, and the fear that a stray bullet or the whim of a heavily armed criminal could change his or his wife's life forever demoralized Aziz over the years and transformed the murderous hordes of the Islamic State in June of last year into the lesser evil. Aziz ultimately welcomed them into his city.

He and his wife had followed what had happened in Syria, and how the troops of Islamic State had behaved in the western part of the Nineveh Governorate as they advanced on Mosul, but they were so desperate that they ignored the barbarism and were determined to see only the supposedly positive aspects of IS: the new order they brought with them, and the peace and quiet they had sorely missed.

Do you understand? Aziz asks. He says that he hopes this is a yearning that the Germans are not entirely unfamiliar with -- the Germans, who once cheered and welcomed Hitler and his genocidal regime.

New Fear

Today, after a year of living under the rules of Islamist tyrants, these hopes seem deeply grotesque to Aziz and his wife. Although chaos no longer prevails in the streets of the city, it has not been replaced by confidence but by a new fear. This time the fear is omnipresent, even during brief, insignificant encounters, on the street, in a café or while shopping.

"I constantly wonder who I can say what to, who I can trust and how much," Aziz writes. He asks himself questions like: Who is an informer? Who is trying to get in with the new rulers?

Who believes he can settle old scores by offering his services as an informer, and passing on information about actions and opinions that are suddenly heretical and therefore subject to punishment? Things that were part of everyday life until recently are now on a long, absurd list of prohibitions set up by the Islamic State.

Smoking is prohibited. Drinking alcohol is prohibited. Wearing hair gel is prohibited. Portraits on T-shirts and other articles of clothing are prohibited, whether they are of the Prophet Mohammed, Kurt Cobain or Donald Duck. Men are not allowed to be clean-shaven, while women are required to wear the niqab, the black face veil that covers everything but the eyes. Now secular music is also prohibited.

Being in favor of democracy and free elections is prohibited. Treating Shiites as orthodox Muslims and Yazidis as human beings is prohibited. The fewer Shiites and Yazidis that exist, the better it is for the world of the Islamic State. The same applies to Christians and Jews, who must either convert or pay protection money. Anyone who refuses to comply is killed. It is a civic duty to advocate multiple genocide in the new Islamic State, which aims to be a country of Sunni Muslims.

Aziz is forced to live in this impossible world, and he is still trying to get his bearings. Each day, he wonders how to behave to avoid ending up in a prison cell or before a Sharia court. What do you do, for example, when you walk around a corner and enter one of the city's squares, where you encounter an executioner who is about to behead a kneeling victim? How are you supposed to react as a witness to a public execution?

Is it safe to simply leave? Or do you have to stay? Is it enough to stay, or do you have to watch?

And is it enough to watch, or will you eventually be forced to chime in with the cheers of the executioner and his helpers? When you see the victim's head lying on the street, must you praise God and his greatness, even if every fiber in your own body is screaming with horror at what you are seeing?

Public Executions

Apparently public executions take place daily in the Islamic State. They are primarily a demonstration of power and a deterrent. It would be logical to announce such executions, as a way of advertising the Islamic State, perhaps on the local radio station in Mosul, which normally airs nothing but tedious religious sermons and Islamist propaganda. But this doesn't happen.

Executions in Mosul happen suddenly on public squares, in parks and in the streets. The routine manner in which they are performed is calculated, an expression of the contempt the Islamic State has for political enemies and religious sinners. In fact, executions conducted by IS are not meant to be a spectacle but rather a daily performance, something entirely banal, like a car accident during morning rush hour.

Often the executioner, his helpers and the victim arrive in an ordinary pickup truck. The vehicle stops, the perpetrators get out, and sometimes one of them is carrying a microphone connected to the stereo system or a loudspeaker mounted on the truck bed. The executioner is holding a sword.

The helpers drag the victim into the desired position and force him to his knees. The chin is pushed toward the chest so that the neck is exposed. The verdict is read quickly and the executioner raises his sword.

How do you cope with situations like this? Ibrahim Aziz has made a pragmatic decision. He tries to avoid the large squares in his city, so as to at least steer clear of these impositions. But there are plenty of others that he and the residents of Mosul cannot avoid quite as easily.

Wounded IS militants are given preferential treatment in hospitals, where reliable Islamists have been placed in charge. The same holds true of government offices, where loyalty to the new rulers is more important than competency.

Morality Police

In some cases, the Islamists have increased salaries to keep experts in their jobs, at the city's waterworks, for example, and yet the drinking water supply has not improved. There is only running water two or three days a week, there are constant power outages, gasoline is scarce and expensive, and basic food prices have increased significantly.

At the city's university, all departments that supposedly contradict Sharia were dissolved, including philosophy, art, music, law and political science. Many construction projects have come to a standstill because no one is being paid anymore. The city no longer has a mobile phone network. Anyone looking for reception has to drive to the city's outskirts and hope for the best. For now, at least, it is still possible to access the Internet.

Members of the Hisbah morality police patrol the streets, driving their vehicles through neighborhoods to monitor whether shops are closed during prayer times, men are bearded, women are modestly dressed, and whether they are accompanied by a male relative or their husband. Like the armed militants at the city's countless checkpoints, they are constantly checking mobile phones and digging through Facebook entries and text messages.

Anyone wishing to leave the city, even temporarily for a week or two, perhaps for a hospital stay or to attend a family celebration in Erbil or Baghdad, must give his house or his car, provided it is sufficiently valuable, as a deposit, or he must furnish the name of someone else who can do it for him.

Desire for Legitimation

Alleged or actual violations of the new rules of behavior lead to a fine at best, for which a receipt is always issued. In the worst case, those who have been warned are hauled before a judge, who imposes the punishment he believes is required under Sharia: a caning, the whip or the sword.

This reign of terror is one of the columns supporting the power of the Islamic State. There is a second column, one that isn't as crude and is in fact carefully carved, essentially the new rulers' house regulations. The new "caliphate," the godly state, also aims to be social and just in a very unique way.

It's a state based on rules meant to be understandable for anyone.

The desire for legitimation constantly leads to new documents, regulations and decrees, which leave the government offices and ministries on letterhead topped with the black flag of IS. Civilians and militants alike are exposed to a veritable flood of these documents. The Islamists' regulatory mania is in no way inferior to their bloodlust.

A submission to the presidential committee of the Islamic State reads: "The recording and dissemination of scenes, or the publication of videos, in which IS soldiers behead or slaughter their enemies, in or outside of battle, in all official and unofficial channels or on private websites is prohibited. Except with the permission of the presidential committee. Those who do not comply will be brought to justice. Praise be to Allah, Lord of the Worlds."

Rules for the Treatment of Slaves

A document was found on a Twitter account that apparently regulates pressing questions on the treatment of female Yazidi sex slaves. The document was compiled by the Fatwa department of the Islamic State, the office that investigates controversial religious questions and declares enemies to be outlaws. It was published last fall by the IS's publishing house, the Al-Himma Library.

The document consists of 27 questions and answers that address the proper religious treatment of sex slaves.

Question four reads: Is it permitted to have sex with a female prisoner who is an infidel? The answer reads: It is permissable to have sex with this type of prisoner.
Question five: Are you permitted to have sex with her as soon as you own her? Answer: It is permitted if she is still a virgin. If this is not the case, her uterus must be cleaned first.
Question eight: If two men buy a prisoner together, can they both have sex with her? Answer: No. Only the man who completely owns the prisoner may have sex with her. One of the men must transfer his ownership share to the other.
Question 10: What happens if the prisoner's owner dies? Answer: She is distributed with the rest of his property.
Question 13: Is it permitted to have sex with a slave before she enters puberty? Answer: It is permitted if she is capable of doing so. If not, she may be used without intercourse.

A letter dated July 17, 2014 is addressed to the remaining Christians in Mosul. The letter is an ultimatum, giving the Christians two days to leave the city. After that, the document reads, "only the sword will stand between them and us."

Draconian Rule

A document from Aleppo Province in Syria lists crimes and the corresponding punishments that will apply in the future. Blasphemy: death. Blaspheming against the Prophet Mohammed: death, even if the offender repents. Blaspheming against Islam: death. Homosexuality: Death, for both men.

Stealing: amputation of one hand. Drinking alcohol: 80 lashes. Slander: 80 lashes. Spying in the service of infidels: death. Renunciation of Islam: death. Robbery: If robbery and murder are committed, death by crucifixion. If only robbery is committed, amputation of the right hand and the left foot.

On Jan. 8, 2015, a decree was signed that defines the conditions for the fighters of competing Islamist groups like the al-Nusra Front who are willing to repent: The individual must confess that he has fallen away from the true faith, submit to religious education, relinquish all information, hand over all weapons and, following military training, return to the front.

An ordinance dated Dec. 14, 2014 bans the use of devices made by computer manufacturer Apple.

The ban is directed at fighters and applies to mobile phones and tablets, and is deemed necessary "for security reasons." Militants are also instructed to deactivate the GPS function on devices from other manufacturers. Technicians in the individual districts who can do this are listed.

School education was also restructured. "Questions are not allowed on polytheism, democracy, the principles of nationalism and racism, usury and interest, pseudo-historic events and boundaries between countries, which contradict Sharia. This directive is binding. Anyone who violates it will be brought to justice."

The new rule for garbage collection reads: "Garbage must be placed onto the street after evening prayers in a barrel, bucket or large, black plastic bag. The costs of garbage collection are 2,000 dinar a month per household, and 5,000 dinar per business. Delinquent payers will be brought to justice. In addition, livestock may not be kept within city limits. If this does occur, the livestock will be confiscated."

A Droning Litany of Killings

The most extraordinary documents are probably the terrorist statements of account, which are published annually to convince fans, fighters and financiers of the Islamic State's fervor and effectiveness.

These reports, inventories of terror, primarily describe the civil war against the Shiites. The latest, a 410-page report, is organized by province and lists murders, attacks and assassinations in chronological order.

For readers with little time on their hands, the report begins with a full-page graphic that celebrates IS's deeds in the last 12 months: 615 attacks with car bombs, of which 78 were carried out by suicide attackers. One-hundred-sixty attacks with explosive belts. Fourteen attacks with motorcycle bombs.

Some 4,465 other bomb attacks. Three-hundred-thirty-six incidents in which buildings were stormed. Some 1,083 murders with small arms or thrusting weapons. Six-hundred-seven artillery attacks. A full 1,015 attacks with explosive charges or through arson. It lists 30 attacks on checkpoints as well as 1,047 sniper operations. And, finally, control of eight cities through the murder of leading opposition politicians.

The details are provided in the ensuing pages. For the Nineveh Governorate, of which Mosul is the capital, the report includes 13 pages of murders and attacks for the weeks between May 11 and June 9, 2013. It is a droning litany of killings.

Detonation of explosives in a Shiite army car in the Rabia region. Detonation in front of the house of a criminal working for the Shiite army in the Arabi/Mosul neighborhood. Detonation of explosives in a Hummer military vehicle in the Tahrir/Mosul neighborhood. Detonation of explosives against a convoy of Shiite foot soldiers. Detonation of explosives in the car of a disloyal guard unit. Murder of a criminal officer working for the Shiite police with firearms. Attack with various weapons on the headquarters of the Shiite police in the village of Sheikh Hamad.

Detonation, murder, detonation.

Attacks and murders, proudly proclaimed, sometimes a dozen on a single day. At the end of the 30th day of a single month, the report documents exactly 300 attacks, with many more victims.
This is the world of the Islamic State, the world in which Ibrahim Aziz and about 10 million other men, women and children now live.

Months ago, Aziz sent his wife and children to Erbil in Kurdish territory. He remained in Mosul to watch the house and the family car. He has no money, his savings are almost gone, and he has sold all the furniture in the house.

His only option now is to wait for what he expects will happen one day: the battle for Mosul.

The Slaves of Sinjar

IS believes that the Yazidis have no right to exist. Their women are abducted and abused by the bearded members of the self-proclaimed master race. There is already plenty of material for future war crimes trials.

The women are young and old, and they sit in tents, refugee camps and on blankets. They sit on the bare floor in half-finished new buildings. When the front got closer and closer at the end of last year, they found accommodation with friends and relatives or, for lack of alternatives, they became squatters, taking up residence in abandoned buildings together with their parents and children.

The women, who number in the hundreds, are not related to each other. They come from different backgrounds, but one experience unites them all: They were hostages of the Islamic State. They were all abducted because they are Yazidis. They were debased and treated as merchandise that can be bought and sold, traded and abused at a whim.

Many of them looked on as their fathers, husbands and brothers were murdered when their settlements were attacked, and many have no idea what happened to their sisters and mothers after they were separated from them. Perhaps they are dead, perhaps they were sold to the Syrian part of the Islamic State, or perhaps they are not far away, merely on the other side of a front that is only a two-hour drive away.

Many of the women are unwilling to talk about what happened to them, understandably so. But a few are prepared to speak, because they believe their silence would constitute yet another victory for their tormentors.

One of these women, Havin Ali, is in her early 20s, with dark eyes and a steady voice. She now lives as a refugee in a half-finished house on the outskirts of Dohuk. Its owners have fled. Steel reinforcement mats jut from concrete walls, there is no electricity or running water, and there are no windows. They use plastic tarps to protect against the heat of the day.

Havin, who is now sitting with her family, spent more than three weeks in the "caliphate." One night, she managed to escape through a broken window in the house of the man who had bought her.

The village where Havin grew up is on the edge of the Sinjar Mountains. The IS militants, clad in black, captured the village late last year, after a short battle between unevenly matched forces, with the men from the village defending themselves against a superior adversary with their simple rifles.

When the killing had ended, Havin and her sisters were dragged from the house and pushed onto a bus that already contained many women and girls. The destination was a sports club in Mosul, located near the Baghdad Hotel.

The Islamic State was using it as an interim storage facility for the new women, the new merchandise. Havin stayed there with her sister for seven days and nights, in a large building with hundreds of other women. The air was poor, as was the food, but the uncertainty was even worse. No one told them why they were there or what would happen to them. Few people spoke with them. They were treated like livestock.

Slave Market

At the end of the first week, they were loaded onto buses again and taken to a spacious wedding banquet hall called the "Galaxy," also in Mosul. IS had repurposed it into a slave market. In the two-story building, Havin once again found herself among hundreds of women who were being closely guarded by IS militants.

"The very young girls were always sold quickly," Havin recalls. Militants pulled them out of the crowd, seemingly at random, and dragged them into another room. Some men settled for one woman while other bought several. Two men bought 80 women and girls at once and loaded them into two busses they had brought along. There was a rumor that they were headed for the Syrian section of the Islamic State, to yet another slave market or a brothel.

When the rumor began to spread, says Havin, one girl committed suicide with a shard of glass.

She believes that only one woman managed to escape this prison. She told the guards that she was pregnant, and she was examined by female doctors, who confirmed that she was. Then she was taken, but no one knew where.

On her fourth day in the "Galaxy," it was Havin's turn. A guard grabbed Havin and took her into an adjoining room, where she was placed on display. Men looked at her, some with amusement and some lustfully. A bearded, middle-aged man bought her, but Havin was never told what the purchase price was. The man had intended her as a present for one of his sons, and she was to be married to him. Havin says that the man who bought her treated her decently, apparently to avoid damaging the gift for his son.

In her owner's household, Havin was ordered to help out in the kitchen, with cooking and in the courtyard. She worked alongside other women who were part of the family but were dismissive and spoke with her as little as possible. Havin was the only one who was made to walk barefoot outside the house, to prevent her from running away. The ground outside the house was covered in brambles and coarse gravel.

Havin managed to flee after about three weeks, before the wedding preparations were complete and before she was made to convert to Islam. One night, while everyone was sleeping, she squeezed through a broken window and ran northward, still barefoot. She ran and hobbled through the night for hours until, exhausted, she encountered an army patrol. It was a Yazidi unit.

Now she is sitting in this house, in this room. But both her sister and her younger brother are still missing. The family survives on relief supplies that are distributed in a nearby refugee camp. When asked what she wants for the future, she replies, "The return of my sister and brother. And the opportunity for revenge."

Documenters of the Slaughter

A group of determined resistance fighters are risking their lives to film and photograph IS atrocities in Raqqa. The rebels' worst enemies are female agents, because all veiled women look the same.
 
The first video, filmed with a mobile phone camera, depicts a large screen in Raqqa, on an evening in February. On the screen, larger-than-life, lurching and burning to death, is Jordanian pilot Moaz al-Kasasbeh. The mobile phone video shows the outlines of a cheering crowd in front of the screen.

The second video, 41 seconds long, depicts a woman dressed in black. She is kneeling on the street, at an intersection, with her hands tied behind her back, surrounded by armed men. A few passersby are standing in the background, and an armed man is walking in a circle, looking bored.

There are two men standing directly behind the woman: her judge and her executioner. The judge praises Allah and declares that the death of this woman, who has deceived her husband, is God's will. When the judge is finished speaking, the executioner raises his pistol and shouts "Allahu akbar!" In the next second, the woman is shot in the head.

There are additional videos that depict other executions, along with ordinary street scenes from Raqqa and the surrounding towns. All of this is forbidden and punishable by death. The videos were recorded with mobile phones because they are easily concealed in the sleeve of a jacket or elsewhere. Sometimes a smartphone was also placed in a box with a small hole in it, which seemed to have been carelessly left on the street.

The video quality is mediocre. Sometimes the lens is covered with material or the tip of a finger, and the films certainly cannot compete with those made by al-Furqan Media, the PR wing of the Islamic State. This is not surprising, as they were not produced by someone working calmly and then professionally edited. Instead, they were filmed hectically and under cover by courageous people who were risking their lives and call themselves citizen journalists. They deserve to be mentioned in the same breath as the Scholls, the famous siblings and college students in Munich who were executed during World War II for their resistance against Hitler and the Nazis. They have made it their mission to break the media monopoly of a dictatorial regime, whatever the cost.

The videos, photos and reports are posted on a website with the title "Raqqa Is Being Slaughtered Silently." The site has been online for about a year and is operated by a dozen young men, mostly students. They are risking their lives given that the Islamic State has the sole copyright on execution videos, and violations are punished with the sword.

One of the website's founders, who uses the pseudonym Abu Mohammed, was in southern Turkey in March. He had fled from Raqqa because he feared he would be identified by Islamic State hackers.

"They sent us emails under false names, offered to work for us as volunteers and supposedly wanted to provide videos for our site," he says. The emails were contaminated with Trojan viruses designed to collect information about the activists' whereabouts. "Hackers from Canada who are working with us discovered the viruses during routine scans," says Abu Mohammed.

'Enemy of God'

Mohammed, who is in his late 20s, is a former student who had aspirations to become an engineer. Now he's a resistance fighter in exile, allegedly on the Islamic State's most wanted list in Raqqa, and he can claim that his organization was officially condemned as an "enemy of God" in three Friday sermons in Raqqa mosques.

Abu Mohammed began his political work more than a year ago, as an outraged, angry amateur. A self-taught man, he had a lot to learn in the past 14 months. At first, he and his friends posted their videos and images on Facebook and Twitter, after they had been saved on the memory chips of their mobile phones. This saved time, but it also increased the risk to an unreasonable level, as they soon learned.

One of their fellow activists, Motaz Billah, was captured only a month after the campaign began. During a search at a checkpoint, militants found incriminating material on Billah's mobile phone.

Three days after the arrest, the message that he had been publicly executed -- shot to death -- appeared on his Facebook account. His murderers posted the images on the Internet in late April.

Since the tragedy, Abu Mohammed and his activists have become more cautious and their lives more complicated. They move around the city restlessly, changing their accommodations every few days.

They have also changed the way they work. The fact that Islamic State has publicly condemned them has brought them new helpers, and they can now rely on a network of sympathizers who take photographs and record videos. They have never met in person, and the helpers have no idea who the key members of the organization are. The group operates very similarly to criminal hacker gangs.

They only know each other through pseudonyms, and they meet online in a closed forum that is only accessible and known to invited members.

In the last 12 months, these precautions have allowed them to evade the hackers and hunters of Islamic State, who are constantly combing through buildings where they believe activists are staying.

Despite the new strategy, the risk of being caught while filming is only one of a number of risks that are difficult to control. The files are usually uploaded at Internet cafés, which the Islamic State has under surveillance, both through informants and cameras. As a result, the activists can only upload their files in places where they trust the café owners or are able to find loopholes in the surveillance network.

According to Abu Mohammed, the al-Khansa Brigades are even more problematic. The all-female units are part of the morality police, and because their members wear the Niqab, like all women in the Islamic State, they can operate essentially incognito, so that one of them could be standing undetected next to one of Abu Mohammed's friends while he is filming. "This is really a big problem for us," he says.

The meeting with Abu Mohammed was supposed to take place in Gaziantep, a Turkish city near the Syrian border, but on the previous evening he sent a text message stating he wanted to meet in a different city. He had received warnings from moderate Sunnis that Islamic State killers were searching for him in Gaziantep.

After the meeting, Abu Mohammed disappeared into the alleyways of the old city. He said he would spend at least one night at a friend's house. He sounded relaxed. Like his mortal enemies, he has faith in God, and he says that whatever happens, it is in the hands of Allah.

The End of Work as We Know It

Jean Pisani-Ferry

JUL 1, 2015

uber app

PARIS – In 1983, the American economist and Nobel laureate Wassily Leontief made what was then a startling prediction. Machines, he said, are likely to replace human labor much in the same way that the tractor replaced the horse. Today, with some 200 million people worldwide out of work – 30 million more than in 2008 – Leontief’s words no longer seem as outlandish as they once did. Indeed, there can be little doubt that technology is in the process of completely transforming the global labor market.
 
To be sure, predictions like Leontief’s leave many economists skeptical, and for good reason.

Historically, increases in productivity have rarely destroyed jobs. Each time that machines yielded gains in efficiency (including when tractors took over from horses), old jobs disappeared, but new jobs were created. Furthermore, economists are number crunchers, and recent data show a slowdown – rather than an acceleration – in productivity gains. When it comes to the actual number of jobs available, there are reasons to question the doomsayers’ dire predictions. Yet there are also reasons to think that the nature of work is changing.
 
To begin with, as noted by the MIT economist David Autor, advances in the automation of labor transform some jobs more than others. Workers carrying out routine tasks like data processing are increasingly likely to be replaced by machines; but those pursuing more creative endeavors are more likely to experience increases in productivity. Meanwhile, workers providing in-person services might not see their jobs change much at all. In other words, robots might put an accountant out of work, boost a surgeon’s productivity, and leave a hairdresser’s job unaltered.
 
The resulting upheavals in the structure of the workforce can be at least as important as the actual number of jobs that are affected. Economists call the most likely outcome of this phenomenon “the polarization of employment.” Automation creates service jobs at the bottom end of the wage scale and raises the quantity and profitability of jobs at its top end. But the middle of the labor market becomes hollowed out.
 
This type of polarization has been going on in the United States for decades, and it is taking place in Europe too – with important consequences for society. Since the end of World War II, the middle class has provided the backbone of democracy, civil engagement, and stability; those who did not belong to the middle class could realistically aspire to join it, or even believe that they were part of it, when that was not the case. As changes in the job market break down the middle class, a new era of class rivalry could be unleashed (if it has not been already).
 
In addition to the changes being wrought by automation, the job market is being transformed by digital platforms like Uber that facilitate exchanges between consumers and individual suppliers of services. A customer calling an Uber driver is purchasing not one service, but two: one from the company (the connection to a driver whose quality is assured through customer ratings) and the other from the driver (transport from one location to another).
 
Uber and other digital platforms are redefining the interaction among consumers, workers, and employers. They are also making the celebrated firm of the industrial age – an essential institution, which allowed for specialization and saved on transactions costs – redundant.
 
Unlike at a firm, Uber’s relationship with its drivers does not rely on a traditional employment contract. Instead, the company’s software acts as a mediator between the driver and the consumer, in exchange for a fee. This seemingly small change could have far-reaching consequences. Rather than being regulated by a contract, the value of labor is being subjected to the same market forces buffeting any other commodity, as services vary in price depending on supply and demand. Labor becomes marked to market.
 
Other, less disruptive changes, such as the rise of human capital, could also be mentioned. An increasing number of young graduates shun seemingly attractive jobs in major companies, preferring to earn much less working for start-ups or creative industries. While this can be explained partly by the appeal of the corresponding lifestyle, it may also be a way to increase their overall lifetime income. Instead of renting their set of skills and competences for a pre-set price, these young graduates prefer to maximize the lifetime income stream they may derive from their human capital.
 
Again, such behavior undermines the employment contract as a basic social institution and makes a number of its associated features, such as annual income taxation, suboptimal.
 
Whatever we think of the new arrangements, we are unlikely to be able to stop them. Some might be tempted to resist – witness the recent clashes between taxi and Uber drivers in Paris and the lawsuits against the company in many countries. Uber’s arrangement may be fraudulent according to the existing legal framework, but that framework will eventually change. The transformative impacts of technology will ultimately make themselves felt.
 
Rather than try to stop the unstoppable, we should think about how to put this new reality at the service of our values and welfare. In addition to rethinking institutions and practices predicated on traditional employment contracts – such as social security contributions – we will need to begin to invent new institutions that harness this technology-driven transformation for our collective benefit.
 
The backbone of tomorrow’s societies, after all, will be built not by robots or digital platforms, but by their citizens.
 
 


Why Hedge Funds Are More Active In Gold

by: HedgeThink
             


"If you don't own gold…there is no sensible reason other than you don't know history or you don't know the economics of it…," says Ray Dalio, the founder of Bridgewater, the World's largest Hedge Fund.

Dalio calls gold a currency, like the dollar or the euro… It's an alternate form of cash. History reminds us there are times when people don't believe in paper currencies and need an alternative.

Thus, Gold was used as money. And it might be that people can turn to gold again in a currency crisis. These are Dalio's views expressed in an interview with the Council on Foreign Relations.

Other leading hedge fund managers such as George Soros, and John Paulson too believe in gold. The number of gold bulls in the Hedge Funds Managers family is growing. Hedge funds open position in gold is growing. The Commitments of Traders (COT) Gold reports 415,718 gold futures open interest on June 19. The COT report is a weekly report published on every Friday by the Commodity Futures Trading Commission (CFTC) that contains an up-to-date information on futures market operations.

(click to enlarge)

 

Gold Price Trend

Gold was on a bull run for 11 years at a stretch since 2001. It soared from $250 an ounce in 2001 to $1,900 in 2011. And then its price started falling and Gold sank into a bear market in April 2013. The price reached a low of $1,140 in November 2014. Though it bounced to $1,300 in January 2015 but could not sustain and declined to $1,150 in March. Since then, technically the gold price has been in sideways move around the $1,200 level within a channel, roughly between $1,170 and $1,210.
10year Gold Price Trend
Source: Goldprice

 

Hedge funds invest in gold to hedge uncertainties

Because of gold's hedging virtues, gold generally constitutes a portion of hedge funds' portfolio.

For example, gold forms 7.5% of Bridgewater's All Weather Portfolio. Investing in gold also protects Hedge Funds' portfolio from inflation as gold prices track inflation rates. Hedge fund managers buy gold as a hedge or safe haven against any economic crises. The gold price is less volatile than major stock market indices, such as the S&P500, and is much less volatile than other commodities. Unlike oil and many other commodities where production is highly concentrated in some regions, gold mine production and gold reserves are geographically diversified. This makes gold much less vulnerable to a regional or country-specific economic or political shock. Hedge funds invest in Gold as an effective hedge against inflation, currency weakness, and geopolitical uncertainties. The price of gold does not move with the price of other financial assets. The economic forces that determine the price of gold are different from the economic forces that determine the price of many other asset classes such as equities, bonds or real estate. Hedge funds use Gold as an effective tool for diversifying one's portfolio, potentially reducing overall portfolio risk.

(click to enlarge)
Source: Is Gold no longer an inflation hedge?, by Market Realist

 

Hedge Funds prefer investment in Gold through ETFs

The gold market is highly liquid and deep. And there are many ways to invest. Hedge funds invest both in Gold as a commodity and in Gold mining companies. They invest in gold ETFs such as the SPDR Gold Trust ETF (NYSEARCA:GLD) and gold miners ETF such as the Market Vector Gold Miners ETF (NYSEARCA:GDX).

For example, GLD accounts for around 3% and GDX around 2.5% of the hedge funds' portfolio. While GLD, the largest tracks gold bullion's spot price, GDX, the largest Gold Miners ETF, provides exposure to diversified gold mining companies such as Goldcorp (NYSE:GG) and Barrick Gold (NYSE:ABX) and Royal Gold (NASDAQ:RGLD).

In addition to investing in ETFs, hedge funds actively trade in gold futures and options and other related derivatives especially in anticipation of outcome of important events such as the Fed meeting or the Euro Zone summit on Greece crisis. It is now for the hedge fund managers to use their skills to anticipate and bet on ongoing global uncertainties.

It will take a coalition to defeat the Isis ‘caliphate’

Common threads in the Middle East need to be pulled together before they unravel

by: David Gardner



The caliphate declared one year ago by the Islamic State of Iraq and the Levant seemed a vainglorious boast at the time but here it still is, amid violent ebbs and flows, untroubled by any real strategy that might defeat it. Isis can be contained and eventually reduced to a manageable threat, but only if the west and regional powers rethink the politics of this confrontation. If this really is, as David Cameron, the British prime minister, told the BBC this week, “the struggle of our generation”, then it needs a strategy that measures up to the challenge.

At one level, Isis is a sophisticated and tactically flexible army, made vertebrate by cadres from Saddam Hussein’s army, which the US disbanded and gratuitously gifted to the jihadis after the 2003 invasion that toppled him. At another, by assassinating Sunni rivals, massive suicide bombing, obscene executions distributed on the internet and attacks on vulnerable targets (Christians or Alawites, Yazidis or Shia, British tourists or French satirists), it defines terrorism: targeted attacks with a random multiplying effect to sow fear and panic. Who can say they are not succeeding?

The response to Isis across the Syrian-Iraqi battlefield is less than the sum of its moving parts.

A telegraphic summary might include: US forms coalition with Europeans and Sunni Arabs to bomb Isis; finds Iraqi army still will not fight; and has trained only a handful of its kind of rebels in Syria. It finds reliable ground troops (to Turkey’s horror) only in Kurds; and, to Sunni discomfiture, in Iraqi Shia militia. Iran orders Syria’s Assad regime to retreat to defensible lines; Saudis make umpteenth attempt to bribe Russia away from Syria; Jordan wants to establish a buffer zone in south Syria; Turkey says it wants one in the north too. All clear so far?

Yet there are common threads here. They need to be pulled together before they unravel. If Turkish troops do cross into Syria, for instance, their first order of business is likely to be preventing Syrian Kurds — the most effective fighters against Isis — from consolidating an autonomous entity Ankara has warned it will never accept.

The key to success is to break the sectarian spiral on which Isis feeds, especially between Sunni and Shia. Partition is becoming a de facto reality in Syria and Iraq. One facet of that, however, is that Isis finds it hard to break out of its Sunni areas, getting beaten back when it tries to break into territory held by Kurds or Shia. But since the latter regard dislodging Isis as a job for Sunni forces, it follows that an effective strategy must win over disaffected Sunni from the extremists. How?

If an Iran nuclear deal is finally struck in coming days, the US — with Russia (now worried about Isis in the northern Caucasus) — should gather together all external actors, including Iran, Saudi Arabia and Turkey, and seek a new compact against Isis.

First, they need to drain the poison of the Sunni-Shia sectarianism. That means Saudi Arabia and Iran reining in their proxy warfare and requires the Saudis, in particular, to repudiate totally Isis’s totalitarian ideas. Even al-Qaeda has distanced itself from Isis. Saudi Wahhabi clerics denounce it as “deviant” but say little on the bigoted interpretation of extreme monotheism they share with the jihadis. Saudi persecution of the Shia must end. And if a revamped coalition emerges, it needs to be clear which ground forces it has — Sunni, Shia and Kurds — and to co-ordinate them.

Second, an effective coalition must do more to help the Sunni. That means more and better arms for Sunni tribal fighters in Iraq and Syrian rebels taking on Isis. Protecting rebel enclaves is vital. The time for a no-fly zone may have passed but it beggars belief the most powerful air force in world cannot make the Assad regime stop its mass murder by barrel and chlorine bombs — a few salutary actions would suffice.

Third, helping the Sunni means massive and clever humanitarian aid for (mainly Sunni) refugees in neighbouring countries: between 1m and 2m in each of Turkey, Lebanon, Jordan and Iraqi Kurdistan.

This is a potential reserve army for Isis: they may not be predisposed to jihad but despair drives people to desperate acts — and Isis pays well and looks after the families of its “martyrs”.

Isis will not go away soon, but if it cannot expand then the aura of invincibility that seduces disaffected Sunni will fade — the first step to its eventual defeat.