How the Hunt Brothers Cornered the Silver Market and Then Lost it All
TL:DR: yes its long. Grab a beer.
Until his dying day in 2014, Nelson Bunker Hunt, who had once been the world’s wealthiest man, denied that he and his brother plotted to corner the global silver market. Sure, back in 1980, Bunker, his younger brother Herbert, and other members of the Hunt clan owned roughly two-thirds of all the privately held silver on earth. But the historic stockpiling of bullion hadn’t been a ploy to manipulate the market, they and their sizable legal team would insist in the following years. Instead, it was a strategy to hedge against the voracious inflation of the 1970s—a monumental bet against the U.S. dollar. Whatever the motive, it was a bet that went historically sour. The debt-fueled boom and bust of the global silver market not only decimated the Hunt fortune, but threatened to take down the U.S. financial system. The panic of “Silver Thursday” took place over 35 years ago, but it still raises questions about the nature of financial manipulation. While many view the Hunt brothers as members of a long succession of white collar crooks, from Charles Ponzi to Bernie Madoff, others see the endearingly eccentric Texans as the victims of overstepping regulators and vindictive insiders who couldn’t stand the thought of being played by a couple of southern yokels. In either case, the story of the Hunt brothers just goes to show how difficult it can be to distinguish illegal market manipulation from the old fashioned wheeling and dealing that make our markets work. The Real-Life Ewings Whatever their foibles, the Hunts make for an interesting cast of characters. Evidently CBS thought so; the family is rumored to be the basis for the Ewings, the fictional Texas oil dynasty of Dallas fame. Sitting at the top of the family tree was H.L. Hunt, a man who allegedly purchased his first oil field with poker winnings and made a fortune drilling in east Texas. H.L. was a well-known oddball to boot, and his sons inherited many of their father’s quirks. For one, there was the stinginess. Despite being the richest man on earth in the 1960s, Bunker Hunt (who went by his middle name), along with his younger brothers Herbert (first name William) and Lamar, cultivated an image as unpretentious good old boys. They drove old Cadillacs, flew coach, and when they eventually went to trial in New York City in 1988, they took the subway. As one Texas editor was quoted in the New York Times, Bunker Hunt was “the kind of guy who orders chicken-fried steak and Jello-O, spills some on his tie, and then goes out and buys all the silver in the world.” Cheap suits aside, the Hunts were not without their ostentation. At the end of the 1970s, Bunker boasted a stable of over 500 horses and his little brother Lamar owned the Kansas City Chiefs. All six children of H.L.’s first marriage (the patriarch of the Hunt family had fifteen children by three women before he died in 1974) lived on estates befitting the scions of a Texas billionaire. These lifestyles were financed by trusts, but also risky investments in oil, real estate, and a host of commodities including sugar beets, soybeans, and, before long, silver. The Hunt brothers also inherited their father’s political inclinations. A zealous anti-Communist, Bunker Hunt bankrolled conservative causes and was a prominent member of the John Birch Society, a group whose founder once speculated that Dwight Eisenhower was a “dedicated, conscious agent” of Soviet conspiracy. In November of 1963, Hunt sponsored a particularly ill-timed political campaign, which distributed pamphlets around Dallas condemning President Kennedy for alleged slights against the Constitution on the day that he was assassinated. JFK conspiracy theorists have been obsessed with Hunt ever since. In fact, it was the Hunt brand of politics that partially explains what led Bunker and Herbert to start buying silver in 1973. Hard Money The 1970s were not kind to the U.S. dollar. Years of wartime spending and unresponsive monetary policy pushed inflation upward throughout the late 1960s and early 1970s. Then, in October of 1973, war broke out in the Middle East and an oil embargo was declared against the United States. Inflation jumped above 10%. It would stay high throughout the decade, peaking in the aftermath of the Iranian Revolution at an annual average of 13.5% in 1980. Over the same period of time, the global monetary system underwent a historic transformation. Since the first Roosevelt administration, the U.S. dollar had been pegged to the value of gold at a predictable rate of $35 per ounce. But in 1971, President Nixon, responding to inflationary pressures, suspended that relationship. For the first time in modern history, the paper dollar did not represent some fixed amount of tangible, precious metal sitting in a vault somewhere. For conservative commodity traders like the Hunts, who blamed government spending for inflation and held grave reservations about the viability of fiat currency, the perceived stability of precious metal offered a financial safe harbor. It was illegal to trade gold in the early 1970s, so the Hunts turned to the next best thing. 📷
As an investment, there was a lot to like about silver. The Hunts were not alone in fleeing to bullion amid all the inflation and geopolitical turbulence, so the price was ticking up. Plus, light-sensitive silver halide is a key component of photographic film. With the growth of the consumer photography market, new production from mines struggled to keep up with demand. And so, in 1973, Bunker and Herbert bought over 35 million ounces of silver, most of which they flew to Switzerland in specifically designed airplanes guarded by armed Texas ranch hands. According to one source, the Hunt’s purchases were big enough to move the global market. But silver was not the Hunts' only speculative venture in the 1970s. Nor was it the only one that got them into trouble with regulators. Soy Before Silver In 1977, the price of soybeans was rising fast. Trade restrictions on Brazil and growing demand from China made the legume a hot commodity, and both Bunker and Herbert decided to enter the futures market in April of that year. A future is an agreement to buy or sell some quantity of a commodity at an agreed upon price at a later date. If someone contracts to buy soybeans in the future (they are said to take the “long” position), they will benefit if the price of soybeans rise, since they have locked in the lower price ahead of time. Likewise, if someone contracts to sell (that’s called the “short” position), they benefit if the price falls, since they have locked in the old, higher price. While futures contracts can be used by soybean farmers and soy milk producers to guard against price swings, most futures are traded by people who wouldn’t necessarily know tofu from cream cheese. As a de facto insurance contract against market volatility, futures can be used to hedge other investments or simply to gamble on prices going up (by going long) or down (by going short). When the Hunts decided to go long in the soybean futures market, they went very, very long. Between Bunker, Herbert, and the accounts of five of their children, the Hunts collectively purchased the right to buy one-third of the entire autumn soybean harvest of the United States. To some, it appeared as if the Hunts were attempting to corner the soybean market. In its simplest version, a corner occurs when someone buys up all (or at least, most) of the available quantity of a commodity. This creates an artificial shortage, which drives up the price, and allows the market manipulator to sell some of his stockpile at a higher profit. Futures markets introduce some additional complexity to the cornerer’s scheme. Recall that when a trader takes a short position on a contract, he or she is pledging to sell a certain amount of product to the holder of the long position. But if the holder of the long position just so happens to be sitting on all the readily available supply of the commodity under contract, the short seller faces an unenviable choice: go scrounge up some of the very scarce product in order to “make delivery” or just pay the cornerer a hefty premium and nullify the deal entirely. In this case, the cornerer is actually counting on the shorts to do the latter, says Craig Pirrong, professor of finance at the University of Houston. If too many short sellers find that it actually costs less to deliver the product, the market manipulator will be stuck with warehouses full of inventory. Finance experts refer to selling the all the excess supply after building a corner as “burying the corpse.” “That is when the price collapses,” explains Pirrong. “But if the number of deliveries isn’t too high, the loss from selling at the low price after the corner is smaller than the profit from selling contracts at the high price.” 📷
The Chicago Board of Trade trading floor. Photo credit:Jeremy Kemp
Even so, when the Commodity Futures Trading Commission found that a single family from Texas had contracted to buy a sizable portion of the 1977 soybean crop, they did not accuse the Hunts of outright market manipulation. Instead, noting that the Hunts had exceeded the 3 million bushel aggregate limit on soybean holdings by about 20 million, the CFTC noted that the Hunt’s “excessive holdings threaten disruption of the market and could cause serious injury to the American public.” The CFTC ordered the Hunts to sell and to pay a penalty of $500,000. Though the Hunts made tens of millions of dollars on paper while soybean prices skyrocketed, it’s unclear whether they were able to cash out before the regulatory intervention. In any case, the Hunts were none too pleased with the decision. “Apparently the CFTC is trying to repeal the law of supply and demand,” Bunker complained to the press. Silver Thursday Despite the run in with regulators, the Hunts were not dissuaded. Bunker and Herbert had eased up on silver after their initial big buy in 1973, but in the fall of 1979, they were back with a vengeance. By the end of the year, Bunker and Herbert owned 21 million ounces of physical silver each. They had even larger positions in the silver futures market: Bunker was long on 45 million ounces, while Herbert held contracts for 20 million. Their little brother Lamar also had a more “modest” position. By the new year, with every dollar increase in the price of silver, the Hunts were making $100 million on paper. But unlike most investors, when their profitable futures contracts expired, they took delivery. As in 1973, they arranged to have the metal flown to Switzerland. Intentional or not, this helped create a shortage of the metal for industrial supply. Naturally, the industrialists were unhappy. From a spot price of around $6 per ounce in early 1979, the price of silver shot up to $50.42 in January of 1980. In the same week, silver futures contracts were trading at $46.80. Film companies like Kodak saw costs go through the roof, while the British film producer, Ilford, was forced to lay off workers. Traditional bullion dealers, caught in a squeeze, cried foul to the commodity exchanges, and the New York jewelry house Tiffany & Co. took out a full page ad in the New York Times slamming the “unconscionable” Hunt brothers. They were right to single out the Hunts; in mid-January, they controlled 69% of all the silver futures contracts on the Commodity Exchange (COMEX) in New York. 📷
But as the high prices persisted, new silver began to come out of the woodwork. “In the U.S., people rifled their dresser drawers and sofa cushions to find dimes and quarters with silver content and had them melted down,” says Pirrong, from the University of Houston. “Silver is a classic part of a bride’s trousseau in India, and when prices got high, women sold silver out of their trousseaus.” According to a Washington Post article published that March, the D.C. police warned residents of a rash of home burglaries targeting silver. Unfortunately for the Hunts, all this new supply had a predictable effect. Rather than close out their contracts, short sellers suddenly found it was easier to get their hands on new supplies of silver and deliver. “The main factor that has caused corners to fail [throughout history] is that the manipulator has underestimated how much will be delivered to him if he succeeds [at] raising the price to artificial levels,” says Pirrong. “Eventually, the Hunts ran out of money to pay for all the silver that was thrown at them.” In financial terms, the brothers had a large corpse on their hands—and no way to bury it. This proved to be an especially big problem, because it wasn’t just the Hunt fortune that was on the line. Of the $6.6 billion worth of silver the Hunts held at the top of the market, the brothers had “only” spent a little over $1 billion of their own money. The rest was borrowed from over 20 banks and brokerage houses. At the same time, COMEX decided to crack down. On January 7, 1980, the exchange’s board of governors announced that it would cap the size of silver futures exposure to 3 million ounces. Those in excess of the cap (say, by the tens of millions) were given until the following month to bring themselves into compliance. But that was too long for the Chicago Board of Trade exchange, which suspended the issue of any new silver futures on January 21. Silver futures traders would only be allowed to square up old contracts. Predictably, silver prices began to slide. As the various banks and other firms that had backed the Hunt bullion binge began to recognize the tenuousness of their financial position, they issued margin calls, asking the brothers to put up more money as collateral for their debts. The Hunts, unable to sell silver lest they trigger a panic, borrowed even more. By early March, futures contracts had fallen to the mid-$30 range. Matters finally came to a head on March 25, when one of the Hunts’ largest backers, the Bache Group, asked for $100 million more in collateral. The brothers were out of cash, and Bache was unwilling to accept silver in its place, as it had been doing throughout the month. With the Hunts in default, Bache did the only thing it could to start recouping its losses: it start to unload silver. On March 27, “Silver Thursday,” the silver futures market dropped by a third to $10.80. Just two months earlier, these contracts had been trading at four times that amount. The Aftermath After the oil bust of the early 1980s and a series of lawsuits polished off the remainder of the Hunt brothers’ once historic fortune, the two declared bankruptcy in 1988. Bunker, who had been worth an estimated $16 billion in the 1960s, emerged with under $10 million to his name. That’s not exactly chump change, but it wasn’t enough to maintain his 500-plus stable of horses,. The Hunts almost dragged their lenders into bankruptcy too—and with them, a sizable chunk of the U.S. financial system. Over twenty financial institutions had extended over a billion dollars in credit to the Hunt brothers. The default and resulting collapse of silver prices blew holes in balance sheets across Wall Street. A privately orchestrated bailout loan from a number of banks allowed the brothers to start paying off their debts and keep their creditors afloat, but the markets and regulators were rattled. Silver Spot Prices Per Ounce (January, 1979 - June, 1980) 📷
In the words of then CFTC chief James Stone, the Hunts’ antics had threatened to punch a hole in the “financial fabric of the United States” like nothing had in decades. Writing about the entire episode a year later, Harper’s Magazine described Silver Thursday as “the first great panic since October 1929.” The trouble was not over for the Hunts. In the following years, the brothers were dragged before Congressional hearings, got into a legal spat with their lenders, and were sued by a Peruvian mineral marketing company, which had suffered big losses in the crash. In 1988, a New York City jury found for the South American firm, levying a penalty of over $130 million against the Hunts and finding that they had deliberately conspired to corner the silver market. Surprisingly, there is still some disagreement on that point. Bunker Hunt attributed the whole affair to the political motives of COMEX insiders and regulators. Referring to himself later as “a favorite whipping boy” of an eastern financial establishment riddled with liberals and socialists, Bunker and his brother, Herbert, are still perceived as martyrs by some on the far-right. “Political and financial insiders repeatedly changed the rules of the game,” wrote the New American. “There is little evidence to support the ‘corner the market’ narrative.” Though the Hunt brothers clearly amassed a staggering amount of silver and silver derivatives at the end of the 1970s, it is impossible to prove definitively that market manipulation was in their hearts. Maybe, as the Hunts always claimed, they just really believed in the enduring value of silver. Or maybe, as others have noted, the Hunt brothers had no idea what they were doing. Call it the stupidity defense. “They’re terribly unsophisticated,” an anonymous associated was quoted as saying of the Hunts in a Chicago Tribune article from 1989. “They make all the mistakes most other people make,” said another. p.s. credit to Ben Christopher
If you're ever drunk at 3AM in the back of Bayou Barry and an old man offers a "friendly game of cards"... well it's too late to back out now.
So I’m drunk at Bayou Barry - Taking advantage of the time-honored law of bartending, whereby you're allowed to get absolutely wrecked without getting fired - As long as it's not your bar. And when I say drunk - I mean really drunk - even by bartender standards. So I don't bat an eye when an old man wearing an old raincoat sits down and offers me a friendly game of cards. I’ve made a long series of mistakes to get here... But it’s too late to back out now. And why should I be able to see his eyes? Wearing sunglasses, even late at night, is standard fare for Texas Hold'em... So is the cigar and the thick plume of smoke... The accent is a little unusual… But it is a touristy part of town. In fact, this guys looks familiar... And I’m not put off by his crazy patter about the mystic properties of playing cards. People believe in all kinds of crazy things here. Seeing the future in a pile of chicken entrails... That 4,000 calories of white bread soaked in industrial grade fats makes for a good breakfast... Hell, some of these freaks still see “jazz musician” as a viable career path. So it's not that weird when he starts talking about seeing my future in a pack of cards. I mean that can be literally, scientifically true right? If we each put a couple hundred bucks on the table... And the deck is ordered so he'll get a pair of aces, and I'll get a pair of kings... My future is already written. It’s not a great future… it involves a lighter wallet & an unpaid tab… but it’s as set in stone as anything can be. Of course in this game & this bar I might be lucky if that's the only consequence I face... People think it's the old part of town that's dangerous. But why would the locals rob you in their own backyard? No, it's the tourist traps that make for the best targets. Especially on a cold Tuesday night off of peak tourist season… when the cops are huddled up nice and warm inside their fogged-up squad cars. But I’m too drunk to care. And this guy doesn't seem to care about money anyways - he just wants to talk about the mystical properties of cards. So I humor him. Hell, maybe he does know something. So much of what I’ve been told turned out to be a damn stinking lie. The news... The textbooks... The things politicians say... In a world where all that's a lie... Who knows what could be true? Maybe there's something to an old man in an old raincoat talking about seeing the future in a deck of cards. He explains that that’s where playing cards come from anyway- They were originally fortune-telling devices. Throwing bones lead to throwing dice lead to flipping cards… And if those cards suggest something terrible? Well I’ve made so many mistakes to get here, to this bar, in this cheap, touristy part of town... That everything that comes next is gravy. Even if the future he sees is miserable, that's a gift, because at least it means I have a future. But the past is another story. So when he starts talking about the past, that’s when my mood shifts. See, the past isn't a gift. Not for me. And it's not up for debate either (despite what I told the court reporter.) I can’t just write it off as the ramblings of another Nola drunkard. So now I’m angry. Really angry, when he brings up that fraternity prank gone wrong. Now, I dont worry that he recognizes me. He could be a janitor at Tulane - he certainly looks the part - and news of the incident was all around the school. But I am mad. I finally tell him to back off. What does getting kicked out of Tulane law school have to do with seeing the future in a deck of cards? Plus - nothing was ever proven in a court of law. The college follows its own damn rules, but thankfully my lawyer doesn't. Now the social media smear campaign that lead me to a legal name change... And the photos of that sobbing girl... Well, maybe I would've traded a stint in jail to make all that go away- And here's where the old man perks up. Because there's no stakes yet. It’s just me, the deck of cards, the old man, and a bar that's surprisingly dark, even by late night New Orleans standards. The bartender must have stepped out for a smoke. There's an awful lot of smoke inside the bar now. An awful lot of smoke... and an awful lot of strange accent in the old man’s voice. And that's when he explains why he's gotta talk about the past... Because you see, the future has a whole lot to do with your past. And a past where that little fraternity prank gone wrong never happened... (I was blacked out - so for me it basically didn't) Means a very different future. It means that instead of talking a big game about working on an oil rig... While working at a small bar across the street from the one I’m in now... Maybe I stayed in law school. Maybe my fiancee stayed with me too.... And this is where the old man gives a knowing smile underneath those huge sunglasses of his. This is when, brushing my wallet aside, he offers stakes on this "friendly little card game." He explains, as he cuts the deck: "I'm a cutter. I used to work in radio. I cut radio shows. Then Hollywood for awhile. I cut movies. Now I cut cards... And I cut lives." The room is now just billowing with smoke. But I’m hypnotized. I can't tear my eyes away as he removes an ornate pair of brass scissors from his raincoat. He gives them an ominous click in the air- And all of a sudden- The empty bottle next to me on the table is gone. Some clever bit of sleight-of-hand? Did he knock the bottle off the table when I wasn't paying attention? Lose it in the shadows and smoke? But then he clicks those scissors again... And the smoke is gone. The room is as clean as if a team of maids have been in here for hours. He clicks again, and the raincoat is gone. Now the old man, the cutter, is sitting in a 3 piece suit, still wearing his giant sunglasses. And an even bigger grin. Did I mention I was drunk? And maybe a little high if I’m being completely honest. And in this crazy blur of drunkenness I’m utterly captivated when the Cutter finally explains the stakes. He tells me that If I win... He'll click those scissors of his, and wipe away that nasty little fraternity prank gone wrong. But if he wins, he gets my firstborn son. It’s a bad joke - but not uncommon at the Harrah’s $1 - $3 poker game - about all I can afford these days. (Maybe that’s where I’ve seen this guy. Smoking outside the Harrah’s poker room?) And I don’t even have a son... But it’s way too late… and I’m way too drunk to process what’s going on. This is something I've fantasized - obsessed about FAR more than any woman. The ability to snip that nasty little passage from my life. Hell the ability to snip just a few seconds - maybe a single shot of whiskey would be enough. And I deserve it right? The universe conspired to make those events unfold. I didn't pick the roommates who forced the shots down my throat as part of the hazing... Hell I didn't even pick Tulane. I wanted to go somewhere colder for a change. Get out of the swamp. But Tulane was the only place that let me in... And those roommates were the only ones available... One things clear through the drunken haze - I didn't have a choice then - and I don't have a choice now. (Have I ever truly had a choice?) So I grab the old mans hand- And I shake hard. If the parts before were a blur, now things really get muddy. But in the drunken blur - one thing is abundantly clear: I lost. I lost big. Why stop now, right? Just another loss in a string of hundreds.. maybe thousands. And when I wake up the next morning in the kitchen of Bayou Barry with a dish towel for a pillow… (For what I wish I could say was the first time...) I don’t think about the haze from the night before. I don’t think about it at all for three years... Until I’m back in North Carolina, standing next to my new girlfriend, filled with dread, staring down at a positive pregnancy test... And hearing the faint sound of scissors clicking in my ear.
STORY OF THE HUNT BROTHERS AND SILVER SHORT LONG READ
Story Time: Silver short squeeze
How the Hunt Brothers Cornered the Silver Market and Then Lost it All
TL:DR: yes its long. Grab a beer.
Until his dying day in 2014, Nelson Bunker Hunt, who had once been the world’s wealthiest man, denied that he and his brother plotted to corner the global silver market. Sure, back in 1980, Bunker, his younger brother Herbert, and other members of the Hunt clan owned roughly two-thirds of all the privately held silver on earth. But the historic stockpiling of bullion hadn’t been a ploy to manipulate the market, they and their sizable legal team would insist in the following years. Instead, it was a strategy to hedge against the voracious inflation of the 1970s—a monumental bet against the U.S. dollar. Whatever the motive, it was a bet that went historically sour. The debt-fueled boom and bust of the global silver market not only decimated the Hunt fortune, but threatened to take down the U.S. financial system. The panic of “Silver Thursday” took place over 35 years ago, but it still raises questions about the nature of financial manipulation. While many view the Hunt brothers as members of a long succession of white collar crooks, from Charles Ponzi to Bernie Madoff, others see the endearingly eccentric Texans as the victims of overstepping regulators and vindictive insiders who couldn’t stand the thought of being played by a couple of southern yokels. In either case, the story of the Hunt brothers just goes to show how difficult it can be to distinguish illegal market manipulation from the old fashioned wheeling and dealing that make our markets work. The Real-Life Ewings Whatever their foibles, the Hunts make for an interesting cast of characters. Evidently CBS thought so; the family is rumored to be the basis for the Ewings, the fictional Texas oil dynasty of Dallas fame. Sitting at the top of the family tree was H.L. Hunt, a man who allegedly purchased his first oil field with poker winnings and made a fortune drilling in east Texas. H.L. was a well-known oddball to boot, and his sons inherited many of their father’s quirks. For one, there was the stinginess. Despite being the richest man on earth in the 1960s, Bunker Hunt (who went by his middle name), along with his younger brothers Herbert (first name William) and Lamar, cultivated an image as unpretentious good old boys. They drove old Cadillacs, flew coach, and when they eventually went to trial in New York City in 1988, they took the subway. As one Texas editor was quoted in the New York Times, Bunker Hunt was “the kind of guy who orders chicken-fried steak and Jello-O, spills some on his tie, and then goes out and buys all the silver in the world.” Cheap suits aside, the Hunts were not without their ostentation. At the end of the 1970s, Bunker boasted a stable of over 500 horses and his little brother Lamar owned the Kansas City Chiefs. All six children of H.L.’s first marriage (the patriarch of the Hunt family had fifteen children by three women before he died in 1974) lived on estates befitting the scions of a Texas billionaire. These lifestyles were financed by trusts, but also risky investments in oil, real estate, and a host of commodities including sugar beets, soybeans, and, before long, silver. The Hunt brothers also inherited their father’s political inclinations. A zealous anti-Communist, Bunker Hunt bankrolled conservative causes and was a prominent member of the John Birch Society, a group whose founder once speculated that Dwight Eisenhower was a “dedicated, conscious agent” of Soviet conspiracy. In November of 1963, Hunt sponsored a particularly ill-timed political campaign, which distributed pamphlets around Dallas condemning President Kennedy for alleged slights against the Constitution on the day that he was assassinated. JFK conspiracy theorists have been obsessed with Hunt ever since. In fact, it was the Hunt brand of politics that partially explains what led Bunker and Herbert to start buying silver in 1973. Hard Money The 1970s were not kind to the U.S. dollar. Years of wartime spending and unresponsive monetary policy pushed inflation upward throughout the late 1960s and early 1970s. Then, in October of 1973, war broke out in the Middle East and an oil embargo was declared against the United States. Inflation jumped above 10%. It would stay high throughout the decade, peaking in the aftermath of the Iranian Revolution at an annual average of 13.5% in 1980. Over the same period of time, the global monetary system underwent a historic transformation. Since the first Roosevelt administration, the U.S. dollar had been pegged to the value of gold at a predictable rate of $35 per ounce. But in 1971, President Nixon, responding to inflationary pressures, suspended that relationship. For the first time in modern history, the paper dollar did not represent some fixed amount of tangible, precious metal sitting in a vault somewhere. For conservative commodity traders like the Hunts, who blamed government spending for inflation and held grave reservations about the viability of fiat currency, the perceived stability of precious metal offered a financial safe harbor. It was illegal to trade gold in the early 1970s, so the Hunts turned to the next best thing. 📷
As an investment, there was a lot to like about silver. The Hunts were not alone in fleeing to bullion amid all the inflation and geopolitical turbulence, so the price was ticking up. Plus, light-sensitive silver halide is a key component of photographic film. With the growth of the consumer photography market, new production from mines struggled to keep up with demand. And so, in 1973, Bunker and Herbert bought over 35 million ounces of silver, most of which they flew to Switzerland in specifically designed airplanes guarded by armed Texas ranch hands. According to one source, the Hunt’s purchases were big enough to move the global market. But silver was not the Hunts' only speculative venture in the 1970s. Nor was it the only one that got them into trouble with regulators. Soy Before Silver In 1977, the price of soybeans was rising fast. Trade restrictions on Brazil and growing demand from China made the legume a hot commodity, and both Bunker and Herbert decided to enter the futures market in April of that year. A future is an agreement to buy or sell some quantity of a commodity at an agreed upon price at a later date. If someone contracts to buy soybeans in the future (they are said to take the “long” position), they will benefit if the price of soybeans rise, since they have locked in the lower price ahead of time. Likewise, if someone contracts to sell (that’s called the “short” position), they benefit if the price falls, since they have locked in the old, higher price. While futures contracts can be used by soybean farmers and soy milk producers to guard against price swings, most futures are traded by people who wouldn’t necessarily know tofu from cream cheese. As a de facto insurance contract against market volatility, futures can be used to hedge other investments or simply to gamble on prices going up (by going long) or down (by going short). When the Hunts decided to go long in the soybean futures market, they went very, very long. Between Bunker, Herbert, and the accounts of five of their children, the Hunts collectively purchased the right to buy one-third of the entire autumn soybean harvest of the United States. To some, it appeared as if the Hunts were attempting to corner the soybean market. In its simplest version, a corner occurs when someone buys up all (or at least, most) of the available quantity of a commodity. This creates an artificial shortage, which drives up the price, and allows the market manipulator to sell some of his stockpile at a higher profit. Futures markets introduce some additional complexity to the cornerer’s scheme. Recall that when a trader takes a short position on a contract, he or she is pledging to sell a certain amount of product to the holder of the long position. But if the holder of the long position just so happens to be sitting on all the readily available supply of the commodity under contract, the short seller faces an unenviable choice: go scrounge up some of the very scarce product in order to “make delivery” or just pay the cornerer a hefty premium and nullify the deal entirely. In this case, the cornerer is actually counting on the shorts to do the latter, says Craig Pirrong, professor of finance at the University of Houston. If too many short sellers find that it actually costs less to deliver the product, the market manipulator will be stuck with warehouses full of inventory. Finance experts refer to selling the all the excess supply after building a corner as “burying the corpse.” “That is when the price collapses,” explains Pirrong. “But if the number of deliveries isn’t too high, the loss from selling at the low price after the corner is smaller than the profit from selling contracts at the high price.” 📷
The Chicago Board of Trade trading floor. Photo credit:Jeremy Kemp
Even so, when the Commodity Futures Trading Commission found that a single family from Texas had contracted to buy a sizable portion of the 1977 soybean crop, they did not accuse the Hunts of outright market manipulation. Instead, noting that the Hunts had exceeded the 3 million bushel aggregate limit on soybean holdings by about 20 million, the CFTC noted that the Hunt’s “excessive holdings threaten disruption of the market and could cause serious injury to the American public.” The CFTC ordered the Hunts to sell and to pay a penalty of $500,000. Though the Hunts made tens of millions of dollars on paper while soybean prices skyrocketed, it’s unclear whether they were able to cash out before the regulatory intervention. In any case, the Hunts were none too pleased with the decision. “Apparently the CFTC is trying to repeal the law of supply and demand,” Bunker complained to the press. Silver Thursday Despite the run in with regulators, the Hunts were not dissuaded. Bunker and Herbert had eased up on silver after their initial big buy in 1973, but in the fall of 1979, they were back with a vengeance. By the end of the year, Bunker and Herbert owned 21 million ounces of physical silver each. They had even larger positions in the silver futures market: Bunker was long on 45 million ounces, while Herbert held contracts for 20 million. Their little brother Lamar also had a more “modest” position. By the new year, with every dollar increase in the price of silver, the Hunts were making $100 million on paper. But unlike most investors, when their profitable futures contracts expired, they took delivery. As in 1973, they arranged to have the metal flown to Switzerland. Intentional or not, this helped create a shortage of the metal for industrial supply. Naturally, the industrialists were unhappy. From a spot price of around $6 per ounce in early 1979, the price of silver shot up to $50.42 in January of 1980. In the same week, silver futures contracts were trading at $46.80. Film companies like Kodak saw costs go through the roof, while the British film producer, Ilford, was forced to lay off workers. Traditional bullion dealers, caught in a squeeze, cried foul to the commodity exchanges, and the New York jewelry house Tiffany & Co. took out a full page ad in the New York Times slamming the “unconscionable” Hunt brothers. They were right to single out the Hunts; in mid-January, they controlled 69% of all the silver futures contracts on the Commodity Exchange (COMEX) in New York. 📷
But as the high prices persisted, new silver began to come out of the woodwork. “In the U.S., people rifled their dresser drawers and sofa cushions to find dimes and quarters with silver content and had them melted down,” says Pirrong, from the University of Houston. “Silver is a classic part of a bride’s trousseau in India, and when prices got high, women sold silver out of their trousseaus.” According to a Washington Post article published that March, the D.C. police warned residents of a rash of home burglaries targeting silver. Unfortunately for the Hunts, all this new supply had a predictable effect. Rather than close out their contracts, short sellers suddenly found it was easier to get their hands on new supplies of silver and deliver. “The main factor that has caused corners to fail [throughout history] is that the manipulator has underestimated how much will be delivered to him if he succeeds [at] raising the price to artificial levels,” says Pirrong. “Eventually, the Hunts ran out of money to pay for all the silver that was thrown at them.” In financial terms, the brothers had a large corpse on their hands—and no way to bury it. This proved to be an especially big problem, because it wasn’t just the Hunt fortune that was on the line. Of the $6.6 billion worth of silver the Hunts held at the top of the market, the brothers had “only” spent a little over $1 billion of their own money. The rest was borrowed from over 20 banks and brokerage houses. At the same time, COMEX decided to crack down. On January 7, 1980, the exchange’s board of governors announced that it would cap the size of silver futures exposure to 3 million ounces. Those in excess of the cap (say, by the tens of millions) were given until the following month to bring themselves into compliance. But that was too long for the Chicago Board of Trade exchange, which suspended the issue of any new silver futures on January 21. Silver futures traders would only be allowed to square up old contracts. Predictably, silver prices began to slide. As the various banks and other firms that had backed the Hunt bullion binge began to recognize the tenuousness of their financial position, they issued margin calls, asking the brothers to put up more money as collateral for their debts. The Hunts, unable to sell silver lest they trigger a panic, borrowed even more. By early March, futures contracts had fallen to the mid-$30 range. Matters finally came to a head on March 25, when one of the Hunts’ largest backers, the Bache Group, asked for $100 million more in collateral. The brothers were out of cash, and Bache was unwilling to accept silver in its place, as it had been doing throughout the month. With the Hunts in default, Bache did the only thing it could to start recouping its losses: it start to unload silver. On March 27, “Silver Thursday,” the silver futures market dropped by a third to $10.80. Just two months earlier, these contracts had been trading at four times that amount. The Aftermath After the oil bust of the early 1980s and a series of lawsuits polished off the remainder of the Hunt brothers’ once historic fortune, the two declared bankruptcy in 1988. Bunker, who had been worth an estimated $16 billion in the 1960s, emerged with under $10 million to his name. That’s not exactly chump change, but it wasn’t enough to maintain his 500-plus stable of horses,. The Hunts almost dragged their lenders into bankruptcy too—and with them, a sizable chunk of the U.S. financial system. Over twenty financial institutions had extended over a billion dollars in credit to the Hunt brothers. The default and resulting collapse of silver prices blew holes in balance sheets across Wall Street. A privately orchestrated bailout loan from a number of banks allowed the brothers to start paying off their debts and keep their creditors afloat, but the markets and regulators were rattled. Silver Spot Prices Per Ounce (January, 1979 - June, 1980) 📷
In the words of then CFTC chief James Stone, the Hunts’ antics had threatened to punch a hole in the “financial fabric of the United States” like nothing had in decades. Writing about the entire episode a year later, Harper’s Magazine described Silver Thursday as “the first great panic since October 1929.” The trouble was not over for the Hunts. In the following years, the brothers were dragged before Congressional hearings, got into a legal spat with their lenders, and were sued by a Peruvian mineral marketing company, which had suffered big losses in the crash. In 1988, a New York City jury found for the South American firm, levying a penalty of over $130 million against the Hunts and finding that they had deliberately conspired to corner the silver market. Surprisingly, there is still some disagreement on that point. Bunker Hunt attributed the whole affair to the political motives of COMEX insiders and regulators. Referring to himself later as “a favorite whipping boy” of an eastern financial establishment riddled with liberals and socialists, Bunker and his brother, Herbert, are still perceived as martyrs by some on the far-right. “Political and financial insiders repeatedly changed the rules of the game,” wrote the New American. “There is little evidence to support the ‘corner the market’ narrative.” Though the Hunt brothers clearly amassed a staggering amount of silver and silver derivatives at the end of the 1970s, it is impossible to prove definitively that market manipulation was in their hearts. Maybe, as the Hunts always claimed, they just really believed in the enduring value of silver. Or maybe, as others have noted, the Hunt brothers had no idea what they were doing. Call it the stupidity defense. “They’re terribly unsophisticated,” an anonymous associated was quoted as saying of the Hunts in a Chicago Tribune article from 1989. “They make all the mistakes most other people make,” said another. p.s. credit to Ben Christopher
TEKK - Tekkorp Digital Acquisition Corp: Who's Who of Gaming Mgmt Teams!
Team has been involved in a substantial number of the digital media, sports, entertainment, leisure and gaming industries’ most significant merger and acquisition transactions, holding key positions at, and transacting with Scientific Games Corp, Inspired Gaming Group, FOX Bets, Ocean Casino Resort, Resorts International Holdings, PokerStars, DraftKings, Mohegan Sun, Caesars Entertainment Corporation, Harrah’s Entertainment,Tropicana Entertainment, Inc., TSG/Sky Betting & Gaming, Facebook, Inc, Wynn Resorts, Dubai World/MGM Resorts Here's all the Bios. These guys are stellar! TEKK closed at $10.30 today. Still cheap! If you don't like to read... you don't like to make money!!!! ---------------------------------------------------------------------------------------- Matthew Davey — Chief Executive Officer and Director Mr. Davey has over 25 years of experience within the digital media, sports, entertainment, leisure and gaming ecosystems, as well as experience in the public sector. He is an experienced public company executive officer and board member. He has served in executive management positions across the gaming technology arena. Over the course of Mr. Davey’s career, he oversaw more than ten mergers and acquisitions and over $1.2 billion in debt and equity capital raised to support the companies he has led. Most recently, Mr. Davey was Chief Executive Officer of SG Digital, the Digital Division of Scientific Games Corp. (“Scientific Games”) (Nasdaq: SGMS). SG Digital was established following the purchase by Scientific Games of NYX Gaming Group Limited (“NYX”) (formerly TSXV: NYX), where Mr. Davey served as Chief Executive Officer and Director. The NYX acquisition provided Scientific Games with a vehicle to significantly accelerate the scale and breadth of its existing digital gaming business, including the strategic expansion into sports betting. In his capacity as Chief Executive Officer of NYX, Mr. Davey developed and implemented a corporate strategy that generated strong revenue growth. Mr. Davey shaped company strategy to focus on digital gaming supplier platforms and content that provided various gaming operators with the underlying gaming and sports betting systems for their online gaming business. In 2014, Mr. Davey oversaw the initial public offering of NYX, and his experience in the digital media, sports, entertainment, leisure and gaming industries helped NYX recognize momentum as a public company. After the public offering, from 2014 to 2018, Mr. Davey oversaw seven acquisitions which helped establish NYX as one of the fastest growing global B2B real-money digital gaming and sports betting platforms. These acquisitions included: • OpenBet: In 2016, NYX completed the $385 million acquisition of OpenBet. This was one of the more complex and transformative acquisitions that Mr. Davey oversaw at NYX. Through securing co-investments from William Hill (LSE: WMH), Sky Betting & Gaming and The Stars Group (formerly Nasdaq: TSG, TSX: TSGI), Mr. Davey was able to get the acquisition from Vitruvian Partners completed successfully, winning the deal against much larger and well capitalized competitors. By combining two established and proven B2B betting and gaming suppliers, NYX was well positioned to provide customers with exciting player-driven solutions across all major product verticals and distribution channels. This allowed NYX to become the leading B2B omni-channel sportsbook platform in the market and the supplier to over 300 gaming operators globally with an extensive library of desktop and mobile game titles, including more than 700 on NYX platforms and more than 2,000 on the OpenBet platform. • Cryptologic/Chartwell: In 2015, NYX completed the $119 million acquisition of Cryptologic and Chartwell. The acquisition provided NYX with more than 400 titles of additional leading gaming content, a broader customer base, and direct exposure to PokerStars and Intercasino, part of the Gamesys Group (LSE: GYS) — two of the world’s largest online casino offerings. • OnGame: In 2014, NYX completed the distressed acquisition of OnGame, a premier poker content, platform and service provider. This acquisition provided NYX with one of the best poker products in the industry, access to several regulated jurisdictions, and a valuable talent pool that was instrumental in the growth of NYX. The addition of OnGame further established a path for NYX to continue its growth in both European and U.S. markets. These acquisitions, together with meaningful organic growth, increased NYX’s revenue from $24 million in 2014 to $184 million annualized in 2017. During that time, Mr. Davey helped build NYX to have over 200 customers in the global gaming industry and a team of 1,000 employees. Mr. Davey’s success at NYX ultimately led to its sale to Scientific Games for $631 million in 2018. Mr. Davey joined Next Gen Gaming, the predecessor to NYX, in 2000 as the Vice President of Technology, was appointed as Executive Director in 2003 and named Chief Executive Officer in 2005. Prior to that, he was the Senior Consultant for Access Systems, a company that specializes in the provision of back-end software for licensed online casinos. Prior to joining Access, Mr. Davey worked for the Northern Territory Government specializing in matters pertaining to the internet and e-commerce along with roles in the Department of Racing and Gaming. Mr. Davey received a Bachelor of Electrical & Electronic Engineering from Northern Territory University, Australia (also known as Charles Darwin University). Robin Chhabra — President Mr. Chhabra has been at the forefront of corporate acquisition activity within the digital gaming landscape for over a decade. His prior experience includes leading corporate strategy, M&A, and business development at two of the global leaders in the digital gaming industry, The Stars Group (“TSG”) and William Hill, and a leading supplier, Inspired Gaming Group (Nasdaq: INSE). Mr. Chhabra served on the Group Executive Committees of each of these companies. From 2017 to May 2020, Mr. Chhabra served as Chief Corporate Development Officer at TSG and, from 2019 to August 2020, he also served as the Chief Executive Officer of Fox Bet, a leading U.S. online gaming business which is the product of a landmark partnership between TSG and FOX Sports, a transaction which he led. During that period, Mr. Chhabra led several transactions which transformed TSG into the largest publicly listed online gambling operator in the world by both revenue and market capitalization and one of the most diversified from a product and geographic perspective with revenues of over $2.5 billion. Mr. Chhabra’s M&A experience is extensive and covers multiple global geographies across the digital gaming value chain and includes the following: • TSG/Flutter Entertainment Merger: In 2019, Mr. Chhabra led the TSG M&A team that was responsible for TSG’s $12.2 billion merger with Flutter Entertainment (LSE: FLTR). The merger between TSG and Flutter Entertainment is the largest transaction in the digital gaming industry to date. The combination created the largest publicly listed online gaming company with approximately 13 million active customers and leading product offerings, which include sports betting, online casino, fantasy sports and poker. The combined entity includes some of the world’s most iconic digital gaming brands such as Fanduel, Fox Bet, Sky Bet, PaddyPower, Betfair, PokerStars and SportsBet. TSG/Flutter Entertainment is one of the most geographically diverse digital gaming and media companies with leading positions in the United States, United Kingdom, Australia, Ireland, Italy, Spain, Germany and Georgia. • TSG/Sky Betting and Gaming (“SBG”): In 2018, Mr. Chhabra led the acquisition of SBG from CVC Capital Partners and Sky plc, Europe’s largest media company, in a transaction valued at $4.7 billion. At the time of the acquisition SBG was the largest mobile gambling operator in the United Kingdom and one of the fastest growing of the major operators having doubled its online market share in three years. The acquisition of SBG provided TSG with (a) greater revenue diversification, significantly enhanced expertise and exposure to sports betting just ahead of the judicial overturn of The Professional and Amateur Sports Protection Act of 1992 (PASPA) by the U.S. Supreme Court, (b) a leading position within the United Kingdom, the world’s largest regulated online gaming market, (c) improved products and technology as a result of the addition of SBG’s innovative casino and sports book offerings and a portfolio of popular mobile apps, and (d) expertise in deeply integrating sports betting with leading sports media companies, positioning TSG to create more engaging content, deliver faster growth and decrease customer acquisition costs. • William Hill (LSE: WMH): At William Hill, from 2010 to 2017, Mr. Chhabra served as Group Director of Strategy and Corporate Development where he led several transactions which contributed to William Hill’s transformation from a land-based gambling operator in the United Kingdom to a leading online-led international business. Mr. Chhabra led William Hill’s entry into the U.S. sports betting and online lottery markets with the acquisition of four businesses, including the simultaneous acquisitions of three U.S. sportsbooks, Cal Neva, American Wagering and Brandywine Bookmaking, in 2011 for an aggregate purchase price of $55 million. These businesses ultimately led William Hill to achieve a leading position in the U.S. sports betting market with a market share of 24% in 2019. Additionally, Mr. Chhabra played a key role in structuring William Hill’s successful joint venture with PlayTech Plc (LSE: PTEC) in 2008. The combined entity created one of the largest online gambling businesses in Europe at the time of its formation and led to William Hill’s buyout of Playtech’s interest for $637 million in 2013. Prior to the transaction, William Hill had struggled in its attempt to establish a strong online gaming platform and a meaningful presence outside the United Kingdom. Mr. Chhabra has also successfully completed four transactions worth over $1.2 billion in Australia, the world’s second largest regulated online gambling market, and various partnerships in Asia. Additionally, he completed several technology and media related transactions, including William Hill’s investment in NYX, where he worked with Mr. Davey on NYX’s transformational acquisition of OpenBet. Prior to working in the gaming sector, Mr. Chhabra was an equities analyst and a management consultant. Mr. Chhabra received a Bachelor of Science in Economics from the London School of Economics and Political Science. Eric Matejevich — Chief Financial Officer Mr. Matejevich is a seasoned gaming executive with extensive experience in both the online gaming and traditional casino industries. From February to August 2019, he served as Trustee and Interim-Chief Executive Officer of Ocean Casino Resort (“Ocean”) (formerly Revel Casino, which had a construction cost of $2.4 billion) in Atlantic City, where he successfully led the management team through an ownership change and operational turnaround effort. Over the course of seven months, Mr. Matejevich managed to reduce the property’s weekly cash burn of $1.5 million to an annualized cash flow run rate in excess of $20 million. Prior to Ocean, from 2016 to 2018, Mr. Matejevich served as the Chief Financial Officer of NYX. At NYX, he focused his efforts on integrating the company’s many acquisitions and multiple debt refinancings to simplify its capital structure and provided liquidity for growth initiatives. Additionally, Mr. Matejevich was instrumental to the executive team that sold NYX to Scientific Games for $631 million. Prior to NYX, from 2004 to 2014, Mr. Matejevich was the Chief Financial Officer of Resorts International Holdings and later, from 2011, also the Chief Operating Officer of the Atlantic Club Casino, a property under the Resorts International Holdings umbrella — a Colony Capital (NYSE: CLNY) entity. As Chief Financial Officer, he provided managerial oversight for all finance functions for a six-property casino company with annual gaming revenue exceeding $1.3 billion, 10,000 gaming positions, 7,000 hotel rooms and over 11,000 staff members during his tenure. Mr. Matejevich led the transition effort to integrate a four-casino, $1.3 billion acquisition from Harrah’s Entertainment and Caesars Entertainment (Nasdaq: CZR). As Chief Operating Officer of Atlantic Club, he lobbied for and was successful in obtaining the first internet gaming legislation passed in the United States. The Atlantic Club was the sole New Jersey casino proponent of the legislation. Prior to serving in various gaming positions, Mr. Matejevich was a Vice President of High Yield Research for Merrill Lynch, where he managed the corporate bond research effort for the gaming and leisure sectors and marketed high yield and other debt transactions totaling $4.8 billion. Mr. Matejevich received a Bachelor of Science in Economics from The Wharton School and a Bachelor of Arts in International Relations from The College of Arts and Sciences at the University of Pennsylvania. Our Board of Directors Morris Bailey — Chairman Over the past 10 years, Mr. Bailey has been a leader in turning around Atlantic City, as well as being among the first gaming executives to embrace online gaming and sports betting in the United States. In his efforts, Mr. Bailey partnered with two of the largest digital gaming companies in the world, PokerStars, part of the Stars Group, and DraftKings (Nasdaq: DKNG). In 2010, Mr. Bailey bought Resorts Atlantic City (“Resorts”) and initiated a comprehensive renovation which allowed for the property to be rebranded and repositioned. In 2012, Mr. Bailey signed an agreement with Mohegan Sun to manage the day-to-day operations of the casino. In addition to Mohegan Sun’s operational expertise and ability to reduce costs via economies of scale, Resorts gained access to their robust customer database. Soon thereafter, Mr. Bailey and his team focused on bringing online gaming to the property. In 2015, Resorts established a platform to engage in online gaming by partnering with PokerStars, now part of the $24 billion Flutter Entertainment, PLC (LSE: FLTR), to operate an online poker room in Atlantic City. In 2018, Resorts announced deals with DraftKings and SBTech to open a sportsbook on-property and online. For 2020 year-to-date, Resorts has performed in the top quartile in internet gross gaming revenue in New Jersey. Mr. Bailey’s efforts in New Jersey helped set the framework for expansion of online sports and gaming throughout the United States. In addition to his gaming interests, Mr. Bailey has over 50 years of experience in all facets of real estate development, asset M&A, capital markets and operations and is the founder, Chief Executive Officer and Principal of JEMB Realty, a leading real estate development, investment and management organization. Mr. Bailey has notable investment experience within the energy, finance and telecommunications sectors through investments in the Astoria Energy Plant, Basis Investment Group and Xentris Wireless. Tony Rodio — Director Nominee Mr. Rodio has nearly four decades of experience in the gaming industry. Most recently, Mr. Rodio served as the Chief Executive Officer and director of Caesars Entertainment Corporation (“Caesars”) (Nasdaq: CZR), one of the world’s most diversified casino-entertainment providers and the most geographically diverse U.S. casino-entertainment company, from April 2019 until its acquisition by Eldorado Resorts, Inc. in July 2020. Mr. Rodio led Caesars through its $17.3 billion merger with Eldorado Resorts, one of the largest transactions in the gaming industry to date. Additionally, Mr. Rodio was instrumental to Caesars’ expansion into the digital gaming industry and oversaw the implementation of new digital segments such as its Scientific Games powered retail sportsbook solution that now operates in various states throughout the U.S. From October 2018 to May 2019, Mr. Rodio served as Chief Executive Officer of Affinity Gaming. Prior to Affinity Gaming, he served as President, Chief Executive Officer and a director of Tropicana Entertainment, Inc. (“Tropicana”) for over seven years, where he was responsible for the operation of eight casino properties in seven different jurisdictions. During his time at Tropicana, Mr. Rodio oversaw a period of unprecedented growth at the company, improving overall financial results with net revenue that increased more than 50% driven by both operational improvements and expansion across regional markets. Mr. Rodio led major capital projects, including the complete renovation of Tropicana Atlantic City and Tropicana’s move to land-based operations in Evansville, Indiana. Each of these initiatives, among others, generated substantial value for Tropicana. Ultimately, Mr. Rodio’s efforts at Tropicana led to its sale to Eldorado Resorts in 2018 for $1.85 billion. Prior to Tropicana, Mr. Rodio held a succession of executive positions in Atlantic City for casino brands, including Trump Marina Hotel Casino, Harrah’s Entertainment (predecessor to Caesars), the Atlantic City Hilton Casino Resort and Penn National Gaming. He has also served as a director of several professional and charitable organizations, including Atlantic City Alliance, United Way of Atlantic County, the Casino Associations of New Jersey and Indiana, AtlantiCare Charitable Foundation and the Lloyd D. Levenson Institute of Gaming Hospitality & Tourism. Mr. Rodio brings extensive knowledge of and experience in the gaming industry, operational expertise, and a demonstrated ability to effectively design and implement company strategy. Mr. Rodio received a Bachelor of Science from Rider University and a Master of Business Administration from Monmouth University. Marlon Goldstein — Director Nominee Mr. Goldstein is a licensed attorney with nearly 20 years of experience in the gaming space. He joined The Stars Group (Nasdaq: TSG)(TSX: TSGI) in January 2014 as its Executive Vice-President, Chief Legal Officer and Secretary until his retirement from the company in July 2020 following the merger of TSG with Flutter Entertainment, PLC (LSE: FLTR). Mr. Goldstein also previously served as the Executive Vice-President, Corporate Development and General Counsel of TSG. Mr. Goldstein was also the senior TSG executive based in the United States and was one of the primary architects of TSG’s strategic vision for its U.S.-facing business. During his tenure, TSG grew from an approximately $500 million market-cap company to an approximately $7 billion market-cap company through a combination of organic growth and strategic mergers and acquisitions. Mr. Goldstein participated in numerous M&A transactions and capital markets offerings at TSG, including several transformational transactions in the digital gaming industry. Notable transactions in which Mr. Goldstein was involved include: • TSG/Flutter Merger: In 2019, TSG merged with Flutter for a $12.2 billion transaction value, the largest transaction in the digital gaming industry to date. • TSG/Fox Bet Partnership: In 2019, TSG entered into a partnership with FOX Sports to create FOX Bet in the U.S., a leading U.S. online gaming business. Wall Street Research estimates an approximate $1.1 billion valuation for Fox Bet post-partnership with The Stars Group. • TSG/Sky Betting & Gaming: In 2018, TSG acquired Sky Betting & Gaming, the largest mobile gambling operator in the United Kingdom at the time, for $4.7 billion. • TSG/CrownBet and William Hill: In 2018, TSG simultaneously acquired CrownBet and William Hill, two Australian operators, for a total of $621 million in a multi-part transaction. • TSG/PokerStars and Full Tilt Poker: In 2014, TSG acquired The Rational Group, which operated PokerStars and Full Tilt and was the world’s largest poker business, for $4.9 billion. Through his ability to legally structure large and complex transactions, Mr. Goldstein was integral to TSG’s vision of becoming a full-service online gaming company. Additionally, he assisted in structuring TSG’s capital markets activity, which generated liquidity for acquisitions and strengthened its balance sheet. Prior to joining TSG, Mr. Goldstein was a principal shareholder in the corporate and securities practice at the international law firm of Greenberg Traurig P.A., where he practiced for almost 13 years. Mr. Goldstein’s practice focused on corporate and securities matters, including mergers and acquisitions, securities offerings, and financing transactions. Additionally, Mr. Goldstein was the founder and co-chair of the firm’s Gaming Practice, a multi-disciplinary team of attorneys representing owners, operators and developers of gaming facilities, manufacturers and suppliers of gaming devices, investment banks and lenders in financing transactions, and Indian tribes in the development and financing of gaming facilities. Mr. Goldstein brings experience and insight that we believe will be valuable to a potential initial business combination target business. Mr. Goldstein received a Bachelor of Business Administration with a concentration in accounting from Emory University and a Juris Doctorate with highest honors from the University of Florida, College of Law. Sean Ryan — Director Nominee Mr. Ryan is a digital media and technology operator with extensive global experience in online payments, e-commerce, marketplaces, mobile ad networks, digital games, enterprise collaboration platforms, blockchain, real money gaming and online music. Since 2014, Mr. Ryan has been serving as Vice President of Business Platform Partnerships at Facebook, Inc. (“Facebook”) (Nasdaq: FB), where he leads a more than 500 person global organization that manages the Payments, Commerce, Novi/Blockhain, Workplace and Audience Network businesses. Prior to his current role, Mr. Ryan was hired in 2011 as the Director of Games Partnerships to lead and grow the global Games business at Facebook. While the Director of Games Partnerships, Mr. Ryan focused on re-shaping Facebook’s games and monetization strategies to derive more value for Facebook, its users and its partners, including the addition of a Real Money Gaming offering in regulated markets. Mr. Ryan’s team helped accelerate a major trend in engagement through cross-platform games and therefore the opportunity to increase users through establishing games on multiple platforms. Prior to joining Facebook, Mr. Ryan created the new social and mobile games division at News Corp, an American multinational mass media corporation controlled by Rupert Murdoch. While at News Corp, Mr. Ryan led the acquisition of Making Fun, a San Francisco social-game start-up, that created News Corp’s games publishing division. Before joining News Corp., Mr. Ryan founded multiple digital businesses such as Twofish, Meez, Open Wager and SingShot Media. Mr. Ryan co-founded Twofish in 2009, a virtual goods and services platform that provided developers with data analytics and insights for individual application’s digital economies. Twofish was later sold to online payments provider Live Gamer, where Mr. Ryan served on the board of directors. From 2005 to 2008, Mr. Ryan founded and led Meez.com, a social entertainment service combining avatars, web games and virtual worlds. The white label social casino gaming company Open Wager was spun out of Meez and was later sold to VGW Holdings, Mr. Ryan also co-founded SingShot Media, an online karaoke community, which was sold to Electronic Arts (Nasdaq: EA) and merged into its Sims division. We believe Mr. Ryan’s experience will be valuable to a potential initial business combination target and would provide an expanded perspective on the digital gaming landscape. Mr. Ryan received a Bachelor of Arts from Columbia University and a Master of Business Administration from the University of California, Los Angeles. Tom Roche — Director Nominee Mr. Roche has more than 40 years of experience in the gaming industry as a regulator, advisor and independent auditor. Mr. Roche joined Ernst & Young (“EY”) as a partner in 2003 and opened its Las Vegas office. He was subsequently appointed as the Office Managing Partner and Global Gaming Industry Market Leader. In 2016, Mr. Roche relocated to the EY Hong Kong office to supervise the expansion of the EY Global Gaming Industry practice in the Asia Pacific region. Mr. Roche has been integral to numerous transactions that have shaped the current gaming landscape, including: • Wynn Resorts (Nasdaq: WYNN) initial public offering: Mr. Roche was the lead partner on Wynn Resort’s initial public offering, which raised $450 million in 2002. • Harrah’s Entertainment/Apollo Management Group & Texas Pacific Group: Mr. Roche headed the regulatory advisory services on the buyout of Harrah’s Entertainment, the world’s largest casino company at the time, for $17.1 billion. • Dubai World/MGM Resorts: Mr. Roche headed the regulatory and due diligence advisory services to Dubai World in its approximately $5.1 billion investment in MGM. Dubai World bought 28.4 million MGM shares, or 9.5 percent of the casino operator, for $2.4 billion. It then invested $2.7 billion to acquire a 50% stake in MGM’s CityCenter Project, a $7.4 billion 76-acre Las Vegas development of hotels, condos and retail outlets. • MGM Growth Properties (NYSE: MGP) initial public offering: Mr. Roche provided tax and structural transaction services to MGM Resorts in the creation of MGM Growth Properties, a publicly traded REIT engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts. MGM Growth Properties raised $1.05 billion in its 2016 initial public offering. Mr. Roche also directed EY advisory services to boards and management teams for profit improvement and technology related initiatives. In addition, Mr. Roche provided advisory support to the American Gaming Association on several research projects, including those specifically related to sports betting, the revocation of The Professional and Amateur Sports Protection Act of 1992 (PASPA) and anti-money laundering best practices in the gaming industry. Equally, he has assisted government agencies in numerous international locations with enhancing their regulatory approach to governing the industry especially in the online gambling sector. Prior to joining Ernst & Young, Mr. Roche served as Deloitte’s National Gaming Industry Leader and as the co-head of Andersen’s Gaming Industry Practice in Las Vegas. In 1989, Mr. Roche was appointed by then Governor of the State of Nevada, Robert Miller, to serve as one of three members of the Nevada State Gaming Control Board for a four-year term, where he was directly responsible for the Audit and New Games Lab Divisions. As a board member, he spent a substantial amount of time assisting global jurisdiction regulators enact gaming legislation in the design of their regulatory structure. During his career, Roche has been involved in numerous public and private offerings of equity and debt securities. His background includes providing casino regulatory consulting services to casino licensees and to federal and state agencies including the National Indian Gaming Commission and the Nevada State Gaming Control Board, and industry associations such as the Nevada Resort Association and the American Gaming Association. We believe Mr. Roche’s highly regarded reputation as a gaming auditor and advisor in the gaming industry will be valuable for us and a potential business combination target. Mr. Roche is a member of the American Institute of Certified Public Accountants and is licensed by the Nevada State Board of Accountancy and Mississippi State Board of Public Accountancy. He received his Bachelor of Science degree in Accounting from the University of Southern California.
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Who is Scott Borgenson? Profile from 2016 in “Institutional Investor”
(Note the connections) CargoMetrics Cracks the Code on Shipping Data Scott Borgerson and his team of quants at hedge fund firm CargoMetrics are using satellite intel on ships to identify mispriced securities. By Fred R. Bleakley February 04, 2016 Link to article One late afternoon last November, as a ping-pong game echoed through the floor at CargoMetrics Technologies’ Boston office, CEO Scott Borgerson was watching over the shoulder of Arturo Ramos, who’s responsible for developing investment strategies with astrophysicist Ronnie Hoogerwerf. At Ramos’s feet sat Helios, his brindle pit-bull-and-greyhound mix. All three men were staring at a computer screen, tracking satellite signals from oil tankers sailing through the Strait of Malacca, the choke point between the Indian Ocean and the South China Sea where 40 percent of the world’s cargo trade moves by ship. CargoMetrics, a start-up investment firm, is not your typical money manager or hedge fund. It was originally set up to supply information on cargo shipping to commodities traders, among others. Now it links satellite signals, historical shipping data and proprietary analytics for its own trading in commodities, currencies and equity index futures. There was an air of excitement in the office that day because the signals were continuing to show a slowdown in shipping that had earlier triggered the firm’s automated trading system to short West Texas Intermediate (WTI) oil futures. Two days later the U.S. Department of Energy’s official report came out, confirming the firm’s hunch, and the oil futures market reacted accordingly. “We nailed it for our biggest return of the year,” says Borgerson, who had reason to breathe more easily. His backers were watching closely. They include Blackstone Alternative Asset Management (BAAM), the world’s largest hedge fund allocator, and seven wealthy tech and business leaders. Among them: former Lotus Development Corp. CEO Jim Manzi, who also had a long career at IBM Corp. Compelling these investors and Borgerson to pursue the shipping slice of the economy is the simple fact that in this era of globalization 50,000 ships carry 90 percent of the $18.5 trillion in annual world trade. That’s no secret, of course, but Borgerson and CargoMetrics’ backers maintain that the firm is well ahead of any other investment manager in harnessing such information for a potential big advantage. It’s why Borgerson has kept the firm in stealth mode for years. In its earlier iteration, from 2011 to 2014, CargoMetrics was hidden in a back alley, above a restaurant. Now that he’s running an investment firm, Borgerson declines to name his investors unless, like Manzi and BAAM, they are willing to be identified. “My vision is to map historically and in real time what’s really going on in economic supply and demand across the planet,” says the U.S. Coast Guard veteran, who prides himself and the CargoMetrics team on not being prototypical Wall Streeters. “The problem is enormous, but the potential reward is huge.” According to Borgerson, CargoMetrics is building a “learning machine” that will be able to automatically profit from spotting any publicly traded security that is mispriced, using what he refers to as systematic fundamental macro strategies. He calls the firm a new breed of quantitative investment manager. In unguarded moments he sees himself as the Steve Jobs or Elon Musk of portfolio management. Though his ambitions may sound audacious, one thing is certain: Borgerson doesn’t lack in self-confidence. Over the past six years, he has secretly and painstakingly built a firm heavy in Ph.D.s that can manage a database of hundreds of billions of historical shipping records, conduct trillions of calculations on hundreds of computer servers and systematically execute trades in 28 different commodities and currencies. For his part, Borgerson seems an unlikely architect of such a serious, ambitious endeavor. Easygoing and fond of joking with his colleagues, he is a hands-off manager who credits CargoMetrics’ investment prowess to his team. His brand of humor comes through even when he’s detailing the series of challenges he had starting the firm. After using the phrase “It was hard” several times, he pauses and adds, “Did I mention it was hard?” Although Borgerson declines to provide any specifics about CargoMetrics’ portfolio, citing the advice of his lawyers, performance during the three years of live trading apparently has been strong enough to keep his backers confident and his team of physicists, software engineers and mathematicians in place. “Hopefully, it won’t be too long before we can make a more significant investment,” says BAAM CEO J. Tomilson Hill. Former Lotus CEO Manzi is optimistic about the firm’s prospects: “It has an unbelievable edge with its historical data.” CargoMetrics was one of the first maritime data analytics companies to seize the potential of the global Automatic Identification System. Ships transmit AIS signals via very high frequency (VHF) radio to receiver devices on other ships or land. Since 2004, large vessels with gross tonnage of 300 or more are required to flash AIS positioning signals every few seconds to avoid collisions. That allows CargoMetrics to pay satellite companies for access to the signals gleaned from 500 miles above the water. The firm uses historical data to identify cargo and aggregation of cargo flow, and then applies sophisticated analysis of financial market correlations to identify buying and selling opportunities. “We’re big-data junkies who could not have founded CargoMetrics without the radical breakthroughs of this golden age of technology,” Borgerson says. The revolution in cloud computing has been instrumental. CargoMetrics leverages the Amazon Web Services platform to run its analytics and algorithms on hundreds of computer servers at a fraction of the cost of owning and maintaining the hardware itself. At his firm’s headquarters — where the lobby displays a series of colored semaphore signal flags that spell out the mathematical equation for the surface area of the earth —Borgerson leads the way to his server room. It’s the size of a closet; inside, a thick pipe carries all the data traffic and analytic formulas CargoMetrics needs. That computing power alone would have cost $30 million to $40 million, Manzi says. CargoMetrics is pursuing a modern version of an age-old quest. Think of the Rothschild family’s use in the 19th century of carrier pigeons and couriers on horseback to bring news from the Napoleonic Wars to their traders in London, or, in the 1980s, oil trader Marc Rich’s use of satellite phones and binoculars for relaying oil tanker flow. Other quant-focused Wall Street firms are latching onto the satellite ship-tracking data. But, Borgerson says, “I would bet my life on a stack of Bibles that no one in the world has the shipping database and analytics we have.” The reason he’s so convinced is that from late 2008 he was an early client of the satellite companies that had begun collecting data received from space and on land to build a large database of all the world’s vessel movements in one place. That’s what caught Hill’s eye at Blackstone when he learned of CargoMetrics a few years ago. BAAM now has a managed account with the firm. “If anyone else tries to replicate what CargoMetrics has, they will be years behind [Borgerson] on data analytics,” Hill says. “We know that a number of hedge fund data scientists want his data.” But too much reliance on big data can go wrong, say many academicians. “There is a huge amount of hype around big data,” observes Willy Shih, a professor of management practice at Harvard Business School. “Many people are saying, ‘Let the data speak; we don’t need theory or modeling.’ I argue that even with using new, massively parallel computing systems for modeling and simulation, some forces in nature and the economy are still too big and complex for computers to handle.” Shih’s skepticism doesn’t go as far as to say the data challenge on global trade is too big a puzzle to solve. When informed of the CargoMetrics approach, he called it “very valid and creative. They just have to be careful not to throw away efforts to understand causality.” Another big-data scholar, Massachusetts Institute of Technology professor of electrical engineering and computer science Samuel Madden, also urges caution. “What worries me is that models become trusted but then fail,” he explains. “You have to validate and revalidate.” Borgerson grew up in Southeast Missouri, in a home on Rural Route 5 between Festus and Hematite. His father was a former Marine infantry officer and police official, and his mother a high school French and Spanish teacher. The family traveled 15 miles to Crystal City to attend Grace Presbyterian Church, which was central to young Borgerson’s upbringing: There he was a youth elder, became an Eagle Scout and received a God and Country Award. The church was across the street from the former home of NBA all-star and U.S. senator Bill Bradley, whose backboard Borgerson used for basketball practice. When it came to choosing what to do after high school, Borgerson was torn between becoming a Presbyterian minister and accepting an appointment to the U.S. Coast Guard Academy or West Point. He went with the Coast Guard because, he says, “the humanitarian mission really appealed to me, and I had never been on a boat before.” At the academy, in New London, Connecticut, Borgerson played NCAA tennis and was also a cutup, racking up demerits for such antics as placing a sailboat on the commandant of cadets’ front lawn and leading bar patrons in a rendition of “Semper Paratus,” the school’s theme song. Still, he graduated with honors and spent the next four years piloting a 367-foot cutter — which seized five tons of cocaine in the Caribbean — then captaining a patrol boat that saved 30 lives on search-and-rescue missions. From 2001 to 2003 the Coast Guard sent Borgerson to the Fletcher School at Tufts University to earn his master’s of arts in law and diplomacy. While at Tufts he volunteered at a Boston homeless shelter for military veterans and founded a Pet Pals therapy program for senior citizens. Following graduation, from 2003 to 2006, Borgerson taught U.S. history, foreign policy, political geography and maritime studies at the Coast Guard Academy, and co-founded its Institute for Leadership. While there he would get up at 4:00 each morning to work on his Ph.D. thesis exploring U.S. port cities’ approaches to foreign policy. He would also travel to Boston to complete his course work at Tufts and meet with his adviser, John Curtis Perry. Borgerson’s military allegiance runs deep. One weekend last fall he played football in a service academy alumni game. On another he attended the Army-Navy game. Still militarily fit at age 40, the 6-foot-5 Borgerson works out regularly at an inner-city gym aimed at helping youths find an alternative to gang violence; a few weeks ago he was there boxing with ex-convicts and lifting weights. Leaving the Coast Guard was a hard decision for Borgerson, resulting in part from his frustration with the military bureaucracy’s stymieing of his bid to get back to sea for security missions. With his degrees in hand, he applied for a fellowship at the Council on Foreign Relations. During the application process he met Edward Morse, now global head of commodities research at Citigroup. Morse was on the CFR selection committee in 2007 and recommended Borgerson as a fellow. Morse introduced Borgerson to commodities, and to trading terms like “contango” and “backwardation.” Morse himself had, earlier in career, gotten the jump on official oil supply data by hiring planes to take photos of the lid heights of oil tanks in Oklahoma’s Cushing field. Working for the CFR in New York reconnected Borgerson with his Missouri roots. Bill Bradley’s aunt called the former senator to say: “The son of a family who went to our church in Crystal City is in New York. Would you welcome him?” Bradley did — and would later play a part in Borgerson’s career development. While at the CFR, Borgerson became an expert on the melting of the North Pole ice cap, writing numerous published articles on its implications; this led him to co-found, with the president of Iceland, the Arctic Circle, a nonprofit designed to encourage discussion of the future of that region. Borgerson recently spoke to 50 international generals and admirals about the Arctic and is co-drafting a proposal for a treaty between the U.S. and Canada that would help resolve the differences the two countries have in allowing international ship and aircraft travel through the Northwest Passage. His Arctic research led to an aha moment early in 2008, while he was still with the CFR, on a visit to Singapore and the Strait of Malacca with his Fletcher School classmate Rockford Weitz and their former Ph.D. adviser, Perry. Seeing the mass of ships sailing through the strait, Borgerson and Weitz decided to build a data analytics firm using satellite tracking of ships. Like many successful entrepreneurs, the two struggled to find financing before reaching out to a network of friends and their contacts. One was Randy Beardsworth, who had sat with Borgerson at a 2007 Coast Guard Academy dinner, where Beardsworth, then the Coast Guard’s chief of law enforcement in Miami, was the guest speaker. Borgerson “made references to history and literature, and I thought, ‘Here is a sharp guy,’” recalls Beardsworth. “We have been friends ever since.” But Borgerson didn’t turn to his new friend in his initial fund-raising. “He came to me in 2009, after he had been turned down by 17 VCs, was maxed out on his credit card, was married and had a newborn son,” says Beardsworth, who was reviewing the Department of Homeland Security as part of the Obama administration’s transition team. Beardsworth came to the rescue, not only committing to invest a small amount but introducing his friend to Doug Doan. A West Point graduate and Washington-based angel investor, Doan took to Borgerson right away. “To be honest, it wasn’t his idea, it was Scott I invested in,” says Doan, who provided $100,000 in capital and introduced Borgerson to a few friends, who added $75,000. Manzi came on board as an investor in 2009, having been asked by Bradley to check out Borgerson’s plan for a data metrics firm. (Manzi knew Bradley from the late 1990s, when the latter was considering a run for U.S. president.) With Doan, Doan’s friends and Manzi as investors, CargoMetrics was finally able to garner its first venture capital commitment in early 2010, from Boston-based Ascent Venture Partners. That gave the start-up the capital it needed to hire a bevy of data scientists to build an analytics platform that it could sell to commodity-trading houses and other commercial users. In 2011, CargoMetrics added Summerhill Venture Partners, a Toronto-based firm with a Boston office, to its investor roster, raising roughly $18 million from venture capital and angels for its data business. By then Borgerson had already begun to contemplate converting CargoMetrics from an information provider into a money manager; he saw the potential to extract powerful trade signals from its technology rather than share it with other market participants for a fee. Among those he consulted was serial entrepreneur Peter Platzer, a friend of one of CargoMetrics’ original investors. Platzer, a physicist by training, had spent eight years as a quantitative hedge fund manager at Rohatyn Group and Deutsche Bank before co-founding Spire Global, a San Francisco–based company that uses its own fleet of low-orbit satellites to track shipping, in 2012. “We had lengthy conversations on how to set up quant trading systems and how [commodities giant] Cargill had made a similar decision to set up its own in-house hedge fund to trade on the information it was gathering,” recalls Platzer. So Borgerson reset his course. Doan describes the decision as a “transformative moment” for the CargoMetrics co-founder. “The military trains you to be a strategic thinker,” Doan explains. “Scott had been tactical until then, making small pivots, and like a general who sees the theater of war, he moved into strategic mode.” Borgerson’s ambition to succeed was in no small part fueled by the early turndowns by many venture capital firms and a fierce determination to best the Wall Street bunch at their own game. “There’s a lot that motivates me, including — if I’m honest — I have a big chip on my shoulder to beat the prep school, Ivy League, MBA crowd,” he says. “They’re bred to make money, but they’re not smarter than everyone else; they just have more patina and connections.” (Bred differently, he spent last Thanksgiving visiting his parents in rural Missouri. After breakfast he and his father were in the woods, shooting assault guns at posters of terrorists, with Gunny, his father’s Anatolian shepherd dog.) Borgerson’s plan was not met with enthusiasm from the company’s then co-CEO, Weitz. CargoMetrics had been gaining clients and meeting its goals, and was on its way to becoming a successful data service provider. Weitz, who now is president of the Gloucester, Massachusetts–based Institute for Global Maritime Studies and an entrepreneur coach at Tufts’ Fletcher School, did not return e-mails or phone calls asking for comment. For his part, Borgerson says: “A ship cannot have two captains. The company simply matured and evolved into a streamlined management structure with one CEO instead of two.” Eventually, Doan went along with Borgerson’s plan. “We believe in Scott and that shipping holds the no-shit, honest truth of what the economy is doing,” he says. But buying out the venture capital firms several years ahead of the usual exit time would require a hefty premium over what they had invested. Once again Borgerson’s early supporters played a key role. Manzi, a fellow Fletcher School grad who had mentored Borgerson since the company’s early days, put up more money (making CargoMetrics one of his single largest investments) and introduced him to a powerful group of wealthy investors. Separately, the CFR’s Morse suggested that Borgerson meet with Daniel Freifeld, founder of Washington-based Callaway Capital Management and a former senior adviser on Eurasian energy at the U.S. Department of State. Impressed by Borgerson’s “intellectual honesty, vigor and more than four years of historical data,” Freifeld brought the idea to a billionaire third-party investor, who took his advice and became one of CargoMetrics’ largest backers. “I would not have suggested the investment if CargoMetrics had not done the hard part first,” adds Freifeld, declining to name the investor. A chance encounter in the fall of 2012 gave the CargoMetrics team its first taste of real Wall Street trading. Attending an Arctic Imperative conference in Alaska, Borgerson met the CIO of a large investment firm, whom he declines to name. When Borgerson confided his ambition and that CargoMetrics had developed algorithms to trade on its shipping data once it was legally structured to do so, the CIO suggested CargoMetrics provide the analytical models for a separate portfolio the money manager would trade. Live trading using CargoMetrics’ models began in December 2012. Manzi brought in longtime banker Gerald Rosenfeld in 2013 to craft and negotiate the move to make CargoMetrics a limited liability investment firm. Rosenfeld acted in a personal role rather than in his position as vice chairman of Lazard and full-time professor and trustee of the New York University School of Law. The whole process took a year and a half. During that time Blackstone checked in as an investor. Bradley, now an investment banker, has yet to invest in CargoMetrics, explaining that he is unfamiliar with quantitative investing. But he may eventually invest in Borgerson’s firm, he says, because “we are homeboys. I believe in him and that things are going to work out ” — pausing to add with a smile, “based on my vast quant experience, of course.” Borgerson has been in stealth mode since CargoMetrics’ early days, when he moved the firm from an innovation lab near MIT because the shared space was too open. He is much more forthcoming when boasting of the firm’s “world-class talent.” The team includes astrophysicists, mathematicians, former hedge fund quants, electrical engineers, a trade lawyer and software developers. Hoogerwerf, who has a Ph.D. in astrophysics from the Netherlands’ Leiden University, built distributed technical environments for scientists and engineers at Microsoft Corp. Solomon Todesse, who works on quant investment strategies, was head of asset allocation at State Street Global Advisors. Aquil Abdullah, a team leader in the engineering group, was a software engineer in the high-performance-computing group at Microsoft. And senior investment strategist Charles Freifeld (Daniel’s father) has 40 years’ experience in futures and commodities markets, including nine with Boston-based commodity trading adviser firm AlphaMetrics Capital Management. “All were self-made people; none were born with a silver spoon,” Borgerson notes. One of his blue-collar-background hires was James (Jess) Scully, who joined as chief operating officer in 2011, after his employer Interactive Supercomputing was acquired by Microsoft. “The team we built treasures team success, which is Scott’s motto,” Scully says. “We want shared resources, one P&L, not ‘How much money did my unit make?’” Both Scully and Borgerson say CargoMetrics is like the Golden State Warriors, a leading NBA basketball team known for putting aside personal glory and playing as a band of brothers having fun. Borgerson says he fosters a no-ego policy with “lots of play because investment teams are built on trust, and playing together builds trust.” Team building at CargoMetrics includes pub crawls, picnics at Borgerson’s house, poker nights, volunteer work in a soup kitchen for the homeless, Red Sox games and visits to museums. Trips to the Boston docks or Coast Guard base are intended to remind the CargoMetrics team of the real economy. There are also occasional “touch a tanker” days. On one visit to a tanker, everyone was amazed that the ship was the size of a city building, Borgerson says. “They could smell the salt on the deck,” he recalls. “Wall Street can lose sight of the real fundamentals in the world. I don’t want that to happen here.” Unlike the Rothschilds 200 years ago, only a small percentage of the trades that CargoMetrics makes relate to beating official government data. Most simply are aimed at identifying mispricings in the market, using the firm’s real-time shipping data and proprietary algorithms. At a whiteboard in his conference room, Borgerson sketches out CargoMetrics’ general formula. He draws a “maritime matrix” of three dynamic data sets: geography (Malacca, Brazil, Australia, China, Europe and the U.S.), metrics (ship counts, cargo mass and volume, ship speed and port congestion) and tradable factors (Brent crude versus WTI, as well as mining equities, commodity macro and Asian economic activity). Using satellite data with hundreds of millions of ship positions, CargoMetrics makes trillions of calculations to determine individual cargoes onboard the ships and then to aggregate the cargo flows and compare them with historical shipping data. All that leads to the final comparisons with historical financial market data to find mispricings. If CargoMetrics observes an appreciable decline in export shipping activity in South Africa, for example, its trading models will determine whether that is a significant early-warning sign by considering that information alongside other factors, such as interest rates. If CargoMetrics believes a decline in the rand is forthcoming, it might short it against a basket of other currencies. “This is like a heat map showing opportunity,” Borgerson says, noting that CargoMetrics is not trading physical commodities. “We are agnostic on whether to be long or short, and let the computers spot where there is a mispricing and liquidity in the markets.” He sums up his simple, but still less than revealing, process by writing on the whiteboard “Collect, Compute, Trade.” Borgerson says CargoMetrics is building a systematic approach that will work even when cargo cannot be identified — on containerships, for instance. It already knows a large percentage of the daily imports and exports into and out of China and island economies such as Japan and Australia. And although the firm cannot glean from its calculations on satellite AIS data the type of cargo, such as iPhones from China, it can measure total flow, which shows present economic activity. CargoMetrics’ data scientists are working on linking such activity to the firm’s data set of the past seven years to measure the evolving global economy. That will lead, Borgerson maintains, to more trades on currencies and equity index futures and, eventually, trades on individual equities. “Uncorrelated” is a mantra of Borgerson and his team. Well aware that correlated assets sent the performance of most asset managers, including hedge funds, plunging in the financial crisis, CargoMetrics is determined to come up with an antidote. Careful not to say too much, Borgerson lays out the simple principle that the process starts with placing many bets among uncorrelated strategies in different asset classes, like commodities, currencies and equities. The goal is diversification, staying as market neutral as possible and remaining sensitive to tail risk in different scenarios. CargoMetrics’ analytic models help find asset classes that are outliers. Those may include a publicly traded instrument such as oil, another commodity or an equity for which shipping information was a leading indicator during times when other asset classes marched in lockstep. The historical ship data is then blended with this new information to seek opportunities. Identifying mispriced spreads among different trades within an asset class is another way of avoiding the calamity of correlation. Borgerson says the firm’s models will find instances where one type of oil should be a short trade and another a long one. The same goes for whole asset classes — shorting one that will benefit if virtually all asset prices plunge and buying another that will rise when oil prices gain. “We’re counting cards with the goal of being right maybe 3 percent more than we are wrong, as a way of making profits during good times and staying afloat during times of sudden, unpredictable but far-reaching events,” Borgerson says. The key, he adds, “is to know your edge and spread your risk.” CargoMetrics’ uncorrelated approach worked during the dismal first three weeks of this year, says Borgerson. Dialing down risk as volatility in the markets soared, the firm was on track in January to have its best month since it began trading. To improve the firm’s models, eight of its data scientists hold a weekly strategy meeting, nicknamed “the Shackleton Group” after the band of sailors shipwrecked in the Antarctic from 1914 to 1917. Hoogerwerf and Ramos co-lead the group. At one recent meeting they were deciding how much risk, including how much liquidity, there was in a possible strategy; reviewing whether to keep previous strategies; and assigning who would research new ones. The Shackleton Group’s meetings are free-form, with a lot of “I’ve got an idea” interjections that disregard official roles. “We hit the restart button a lot,” says Ramos, a former director of business intelligence and a quantitative economist at law firm Dewey & LeBoeuf who joined CargoMetrics in late 2010. “That’s why our motto is ‘Never lose hope.’” A bet on oil, related to Russia’s production, was stopped at the last minute in 2014, when Russia invaded Ukraine. Some currency-trading strategies have been abandoned in theory or after failing. Strategies the Shackleton Group likes are passed on to the firm’s investment committee of Borgerson, Scully and Ramos for a final decision. CargoMetrics has a unique set of big-data challenges. Historical shipping patterns may not be as useful in the new global economy now that shipping freight prices are plunging, a sign that trade growth rates may be changing. And analysts point out how hard identifying oil cargo can be in certain locations and instances, even in more-predictable economic times. “While it may be easy to say that ships leaving the Middle East Gulf are typically carrying crude oil, knowing the type of crude is sometimes quite difficult,” says Paulo Nery, senior director of Europe, Middle East and Asia oil for Genscape, a Louisville, Kentucky–based company that analyzes satellite tracking of ships. Borgerson maintains his team is well aware of the dangers of data mining and getting swamped by noise. “If you run computers hard enough, you can convince yourself of anything,” he says. To make sure CargoMetrics’ algorithms for identifying cargo are valid, the firm spot-checks manifest data filed at ports and imposes statistical confidence checks to guard against spurious correlations. Getting the jump on official government statistics is likely to become tougher too thanks to the recently formed High-Level Group for the Modernization of Official Statistics. Although the U.S. is not a member, Canada is a key player helping to lead the mostly European nation group (including South Korea) in coming up with a global blueprint for measuring and reporting economic activity. Reflecting on his journey to Wall Street — raising money, hiring employees with different skill sets, making changes to CargoMetrics’ culture, overcoming legal and regulatory hurdles — almost gives Borgerson second thoughts about whether he would do it again. “I’ve sailed ships through tropical storms, captured cocaine smugglers and testified before Congress [on his Arctic research],” he says, “but this was the hardest.”
From PRAY FOR MY CHILD: Republican city councilman Mark Harris, who is described as a “good military man” and “churchgoer,” was convicted of repeatedly having sex with an 11-year-old girl and sentenced to 12 years in prison. Republican businessman Jon Grunseth withdrew his candidacy for Minnesota governor after allegations surfaced that he went swimming in the nude with four underage girls, including his daughter. Republican director of the “Young Republican Federation” Nicholas Elizondo molested his 6-year old daughter and was sentenced to six years in prison. Democratic California Congressman, Tony Cárdenas, is being sued in LA County for allegedly sexually abused a 16-year-old girl. Democratic aide to Senator Barbara Boxer, Jeff Rosato, plead guilty to charges of trading in child pornography. Democratic Alaskan State Representative, Dean Westlake, resigned from his seat after the media published a report alleging he fathered a child with a 16-year-old girl when he was 28. Republican benefactor of conservative Christian groups, Richard A. Dasen Sr., was charged with rape for allegedly paying a 15-year old girl for sex. Dasen, 62, who is married with grown children and several grandchildren, has allegedly told police that over the past decade he paid more than $1 million to have sex with a large number of young women. Democratic donor and billionaire, Jeffrey Epstein, ran an underage child sex brothel and was convicted of soliciting underage girls for prostitution. Democratic New York Congressman, Anthony Weiner, plead guilty to transferring obscene material to a minor as part of a plea agreement for sexted and sending Twitter DMs to underage girls as young as 15. Democratic donor, activist, and Hollywood producer Harvey Weinstein is being criminally prosecuted and civilly sued for years of sexual abuse (that was well known “secret” in Hollywood) including underage sexual activities with aspiring female actresses. Democratic activist and #metoo proponent, Asia Argento, settled a lawsuit for sexual harassment stemming from sexual activities with an underage actor. Democratic Mayor of Racine, Wisconsin, Gary Becker, was convicted of attempted child seduction, child pornography, and other child sex crimes. Democratic Seattle Mayor Ed Murray resigned after multiple accusations of child sexual abuse were levied against him including by family members. Democratic activist and aid to NYC Mayor De Blasio, Jacob Schwartz was arrested on possession of 3,000+ child pornographic images. Democratic activist and actor, Russell Simmons, was sued based on an allegation of sexual assault where he coerced an underage model for sex. Republican legislative aide Howard L. Brooks was charged with molesting a 12-year old boy and possession of child pornography. Republican Senate candidate John Hathaway was accused of having sex with his 12-year old baby sitter and withdrew his candidacy after the allegations were reported in the media. Republican preacher Stephen White, who demanded a return to traditional values, was sentenced to jail after offering $20 to a 14-year-old boy for permission to perform oral sex on him. Republican talk show host Jon Matthews pleaded guilty to exposing his genitals to an 11 year old girl. Republican anti-gay activist Earl “Butch” Kimmerling was sentenced to 40 years in prison for molesting an 8-year old girl after he attempted to stop a gay couple from adopting her. Republican Party leader Paul Ingram pleaded guilty to six counts of raping his daughters and served 14 years in federal prison. Democratic Governor of Oregon, Neil Goldschmidt, after being caught by a newspaper, publicly admitted to having a past sexual relationship with a 13-year-old girl after the statute of limitations on the rape charges had expired. Democratic Illinois Congressman, Mel Reynolds resigned from Congress after he was convicted of statutory rape of a 16-year-old campaign volunteer. Democratic New York Congressman, Fred Richmond, was arrested in Washington D.C. for soliciting sex from a 16-year-old boy. Democratic activist, donor, and director, Roman Polanski, fled the country after pleading guilty to statutory rape of a 13-year-old girl. Democrats and Hollywood actors still defend him to this day, including, Whoopi Goldberg, Martin Scorcese, Woody Allen, David Lynch, Wim Wenders, Pedro Almodovar, Tilda Swinton and Monica Bellucci. Democratic State Senator from Alaska, George Jacko, was found guilty of sexual harassment of an underage legislative page. Democratic State Representative candidate for Colorado, Andrew Myers, was convicted for possession of child pornography and enticing children. Democratic Illinois Congressman, Gus Savage was investigated by the Democrat-controlled House Committee on Ethics for attempting to rape an underage female Peace Corps volunteer in Zaire. The Committee concluded that while the events did occur his apology was sufficient and took no further action. Democratic activist, donor, and spokesperson for Subway, Jared Fogle, was convicted of distribution and receipt of child pornography and traveling to engage in illicit sexual conduct with a minor. Democratic State Department official, Carl Carey, under Hillary Clinton’s state department, was arrested on ten counts of child porn possession. Democratic Maine Assistant Attorney General, James Cameron, was sentenced to just over 15 years in federal prison for seven counts of child porn possession, receipt and transmission. Democratic State Department official, Daniel Rosen, under Hillary Clinton’s state department, was arrested and charged with allegedly soliciting sex from a minor over the internet. Democratic State Department official, James Cafferty, pleaded guilty to one count of transportation of child pornography. Democratic radio host, Bernie Ward, plead guilty to one count of sending child pornography over the Internet. Democratic deputy attorney general from California, Raymond Liddy, was arrested for possession of child pornography. Republican activist Marty Glickman (a.k.a. “Republican Marty”), was taken into custody by Florida police on four counts of unlawful sexual activity with an underage girl and one count of delivering the drug LSD. Republican election board official Kevin Coan was sentenced to two years probation for soliciting sex over the internet from a 14-year old girl. Republican politician Andrew Buhr was charged with two counts of first degree sodomy with a 13-year old boy. Republican politician Keith Westmoreland was arrested on seven felony counts of lewd and lascivious exhibition to girls under the age of 16 (i.e. exposing himself to children). Republican anti-abortion activist John Allen Burt was charged with sexual misconduct involving a 15-year old girl. Republican County Councilman Keola Childs pleaded guilty to molesting a male child. Republican activist John Butler was charged with criminal sexual assault on a teenage girl. Republican candidate Richard Gardner admitted to molesting his two daughters. Republican Councilman and former Marine Jack W. Gardner was convicted of molesting a 13-year old girl. Republican County Commissioner Merrill Robert Barter pleaded guilty to unlawful sexual contact and assault on a teenage boy. Republican City Councilman Fred C. Smeltzer, Jr. pleaded no contest to raping a 15 year-old girl and served 6-months in prison. Republican activist Parker J. Bena pleaded guilty to possession of child pornography on his home computer and was sentenced to 30 months in federal prison and fined $18,000. Republican parole board officer and former Colorado state representative, Larry Jack Schwarz, was fired after child pornography was found in his possession. Republican strategist and Citadel Military College graduate Robin Vanderwall was convicted in Virginia on five counts of soliciting sex from boys and girls over the internet. Republican Tim Nolan, chairman of Donald Trump’s presidential campaign in Kentucky, pled guilty to child sex trafficking and on February 11, 2018 he was sentenced to serve 20 years in prison. Republican state Senator Ralph Shortey was indicted on four counts of human trafficking and child pornography. In November 2017, he pleaded guilty to one count of child sex trafficking in exchange for the dropping of the other charges. Republican anti-abortion activist Howard Scott Heldreth is a convicted child rapist in Florida. Republican County Commissioner David Swartz pleaded guilty to molesting two girls under the age of 11 and was sentenced to 8 years in prison. Republican judge Mark Pazuhanich pleaded no contest to fondling a 10-year old girl and was sentenced to 10 years probation. Republican anti-abortion activist Nicholas Morency pleaded guilty to possessing child pornography on his computer and offering a bounty to anybody who murders an abortion doctor. Republican legislator Edison Misla Aldarondo was sentenced to 10 years in prison for raping his daughter between the ages of 9 and 17. Republican Mayor Philip Giordano is serving a 37-year sentence in federal prison for sexually abusing 8- and 10-year old girls. Republican campaign consultant Tom Shortridge was sentenced to three years probation for taking nude photographs of a 15-year old girl. Republican Senator Strom Thurmond, a notable racist, had sex with a 15-year old black girl which produced a child. Republican pastor Mike Hintz, whom George W. Bush commended during the 2004 presidential campaign, surrendered to police after admitting to a sexual affair with a female juvenile. Republican legislator Peter Dibble pleaded no contest to having an inappropriate relationship with a 13-year-old girl. Republican Congressman Donald “Buz” Lukens was found guilty of having sex with a female minor and sentenced to one month in jail. Republican fundraiser Richard A. Delgaudio was found guilty of child porn charges and paying two teenage girls to pose for sexual photos. Republican activist Mark A. Grethen convicted on six counts of sex crimes involving children. Republican activist Randal David Ankeney pleaded guilty to attempted sexual assault on a child. Republican Congressman Dan Crane had sex with a female minor working as a congressional page. Republican activist and Christian Coalition leader Beverly Russell admitted to an incestuous relationship with his step daughter. Republican congressman and anti-gay activist Robert Bauman was charged with having sex with a 16-year-old boy he picked up at a gay bar. Republican Committee Chairman Jeffrey Patti was arrested for distributing a video clip of a 5-year-old girl being raped. Democratic Illinois State Representative, Keith Farnham, has resigned and was charged with possession of child pornography and has been accused of bragging at an online site about sexually molesting a 6-year-old girl. Democratic spokesperson for the Arkansas Democratic Party, Harold Moody, Jr, was charged with distribution and possession of child pornography. Democratic Radnor Township Board of Commissioners member, Philip Ahr, resigned from his position after being charged with possession of child pornography and abusing children between 2 and 6 years-old. Democratic activist and BLM organizer, Charles Wade, was arrested and charged with human trafficking and underage prostitution. Democratic Texas attorney and activist, Mark Benavides, was charged with having sex with a minor, inducing a child under 18 to have sex and compelling prostitution of at least nine legal clients and possession of child pornography. He was found guilty on six counts of sex trafficking. Democratic Virginia Delegate, Joe Morrissey, was indicted on charges connected to his relationship with a 17-year-old girl and was charged with supervisory indecent liberties with a minor, electronic solicitation of a minor, possession of child pornography and distribution of child pornography. Democratic Massachusetts Congressman, Gerry Studds, was censured by the House of Representatives after he admitted to an inappropriate relationship with a 17-year-old page. Democratic Former Mayor of Stillwater, New York, Rick Nelson was plead guilty to five counts of possession of child pornography of children less than 16 years of age. Democratic Former Mayor of Clayton, New York, Dale Kenyon, was indicted for sexual acts against a teenager. Democratic Former Mayor of Hubbard, Ohio, Richard Keenan, was given a life sentence in jail for raping a 4-year-old girl. Democratic Former Mayor of Winston, Oregeon, Kenneth Barrett, was arrested for setting up a meeting to have sex with a 14-year-old girl who turned out to be a police officer. Democratic Former Mayor of Randolph, Nebraska, Dwayne L. Schutt, was arrested and charged with four counts of felony third-degree sexual assault of a child and one count of intentional child abuse. Democratic Former Mayor of Dawson, Georgia, Christopher Wright, was indicted on the charges of aggravated child molestation, aggravated sodomy, rape, child molestation and statutory rape of an 11-year-old boy and a 12-year-old girl. Democratic Former Mayor of Stockton, California, Anthony Silva, was charged with providing alcohol to young adults during a game of strip poker that included a 16-year-old boy at a camp for underprivileged children run by the mayor. Democratic Former Mayor of Millbrook, New York, Donald Briggs, was arrested and charged with inappropriate sexual contact with a person younger than 17. Democratic party leader for Victoria County, Texas, Stephen Jabbour, plead guilty to possession and receiving over half a million child pornographic images. Democratic activist and fundraiser, Terrence Bean, was arrested on charges of sodomy and sex abuse in a case involving a 15-year-old boy and when the alleged victim declined to testify, and the judge dismissed the case. Democratic Party Chairman for Davidson County, Tennessee, Rodney Mullin, resigned amid child pornography allegations. Democratic activist, Andrew Douglas Reed, pleaded guilty to a multiple counts of 2nd-degree sexual exploitation of a minor for producing child pornography. Democratic official from Terre Haute, Indiana, David Roberts was sentenced to federal prison for producing and possessing child pornography including placing hidden cameras in the bedrooms and bathrooms at a home he shared with two minor female victims. And there are probably many more well-known artists, activists and government official child molesters. If you know have more names, comment below and I will add them to the list. How is it in your country? Are politicians also molesting children?
Our entire government body has been infiltrated by sickos
Republicans:
Republican Speaker of the House Dennis Hastert was indicted on federal charges of structuring bank withdrawals after prosecutors alleged Hastert had molested at least four boys as young as 14 and attempted to compensate his victims and subsequently conceal the transactions. Hastert eventually admitted that he sexually abused the boys whom he had coached decades earlier, and was sentenced to fifteen months in prison. Republican Tim Nolan, chairman of Donald Trump’s presidential campaign in Kentucky, pled guilty to child sex trafficking and on February 11, 2018 he was sentenced to serve 20 years in prison. Republican state Senator Ralph Shortey was indicted on four counts of human trafficking and child pornography. In November 2017, he pleaded guilty to one count of child sex trafficking in exchange for the dropping of the other charges. Republican anti-abortion activist Howard Scott Heldreth is a convicted child rapist in Florida. Republican County Commissioner David Swartz pleaded guilty to molesting two girls under the age of 11 and was sentenced to 8 years in prison. Republican judge Mark Pazuhanich pleaded no contest to fondling a 10-year old girl and was sentenced to 10 years probation. Republican anti-abortion activist Nicholas Morency pleaded guilty to possessing child pornography on his computer and offering a bounty to anybody who murders an abortion doctor. Republican legislator Edison Misla Aldarondo was sentenced to 10 years in prison for raping his daughter between the ages of 9 and 17. Republican Mayor Philip Giordano is serving a 37-year sentence in federal prison for sexually abusing 8- and 10-year old girls. Republican campaign consultant Tom Shortridge was sentenced to three years probation for taking nude photographs of a 15-year old girl. Republican Senator Strom Thurmond, a notable racist, had sex with a 15-year old black girl which produced a child. Republican pastor Mike Hintz, whom George W. Bush commended during the 2004 presidential campaign, surrendered to police after admitting to a sexual affair with a female juvenile. Republican legislator Peter Dibble pleaded no contest to having an inappropriate relationship with a 13-year-old girl. Republican Congressman Donald “Buz” Lukens was found guilty of having sex with a female minor and sentenced to one month in jail. Republican fundraiser Richard A. Delgaudio was found guilty of child porn charges and paying two teenage girls to pose for sexual photos. Republican activist Mark A. Grethen convicted on six counts of sex crimes involving children. Republican activist Randal David Ankeney pleaded guilty to attempted sexual assault on a child. Republican Congressman Dan Crane had sex with a female minor working as a congressional page. Republican activist and Christian Coalition leader Beverly Russell admitted to an incestuous relationship with his step daughter. Republican congressman and anti-gay activist Robert Bauman was charged with having sex with a 16-year-old boy he picked up at a gay bar. Republican Committee Chairman Jeffrey Patti was arrested for distributing a video clip of a 5-year-old girl being raped. Republican activist Marty Glickman (a.k.a. “Republican Marty”), was taken into custody by Florida police on four counts of unlawful sexual activity with an underage girl and one count of delivering the drug LSD. Republican legislative aide Howard L. Brooks was charged with molesting a 12-year old boy and possession of child pornography. Republican Senate candidate John Hathaway was accused of having sex with his 12-year old baby sitter and withdrew his candidacy after the allegations were reported in the media. Republican preacher Stephen White, who demanded a return to traditional values, was sentenced to jail after offering $20 to a 14-year-old boy for permission to perform oral sex on him. Republican talk show host Jon Matthews pleaded guilty to exposing his genitals to an 11 year old girl. Republican anti-gay activist Earl “Butch” Kimmerling was sentenced to 40 years in prison for molesting an 8-year old girl after he attempted to stop a gay couple from adopting her. Republican Party leader Paul Ingram pleaded guilty to six counts of raping his daughters and served 14 years in federal prison. Republican election board official Kevin Coan was sentenced to two years probation for soliciting sex over the internet from a 14-year old girl. Republican politician Andrew Buhr was charged with two counts of first degree sodomy with a 13-year old boy. Republican politician Keith Westmoreland was arrested on seven felony counts of lewd and lascivious exhibition to girls under the age of 16 (i.e. exposing himself to children). Republican anti-abortion activist John Allen Burt was charged with sexual misconduct involving a 15-year old girl. Republican County Councilman Keola Childs pleaded guilty to molesting a male child. Republican activist John Butler was charged with criminal sexual assault on a teenage girl. Republican candidate Richard Gardner admitted to molesting his two daughters. Republican Councilman and former Marine Jack W. Gardner was convicted of molesting a 13-year old girl. Republican County Commissioner Merrill Robert Barter pleaded guilty to unlawful sexual contact and assault on a teenage boy. Republican City Councilman Fred C. Smeltzer, Jr. pleaded no contest to raping a 15 year-old girl and served 6-months in prison. Republican activist Parker J. Bena pleaded guilty to possession of child pornography on his home computer and was sentenced to 30 months in federal prison and fined $18,000. Republican parole board officer and former Colorado state representative, Larry Jack Schwarz, was fired after child pornography was found in his possession. Republican strategist and Citadel Military College graduate Robin Vanderwall was convicted in Virginia on five counts of soliciting sex from boys and girls over the internet. Republican city councilman Mark Harris, who is described as a “good military man” and “church goer,” was convicted of repeatedly having sex with an 11-year-old girl and sentenced to 12 years in prison. Republican businessman Jon Grunseth withdrew his candidacy for Minnesota governor after allegations surfaced that he went swimming in the nude with four underage girls, including his daughter. Republican director of the “Young Republican Federation” Nicholas Elizondo molested his 6-year old daughter and was sentenced to six years in prison. Republican benefactor of conservative Christian groups, Richard A. Dasen Sr., was charged with rape for allegedly paying a 15-year old girl for sex. Dasen, 62, who is married with grown children and several grandchildren, has allegedly told police that over the past decade he paid more than $1 million to have sex with a large number of young men and women.
Imagine thinking this was a right only problem, and not a deep state problem and sitting there thinking you were smart. Democratic New York Congressman, Anthony Weiner, plead guilty to transferring obscene material to a minor as part of a plea agreement for sexted and sending Twitter DMs to underage girls as young as 15. Democratic donor, activist, and Hollywood producer Harvey Weinstein is being criminally prosecuted and civilly sued for years of sexual abuse (that was well known “secret” in Hollywood) including underage sexual activities with aspiring female actresses. Democratic activist and #metoo proponent, Asia Argento, settled a lawsuit for sexual harassment stemming from sexual activities with an underage actor. Democratic Mayor of Racine, Wisconsin, Gary Becker, was convicted of attempted child seduction, child pornography, and other child sex crimes. Democratic Seattle Mayor Ed Murray resigned after multiple accusations of child sexual abuse were levied against him including by family members. Democratic activist and aid to NYC Mayor De Blasio, Jacob Schwartz was arrested on possession of 3,000+ child pornographic images. Democratic activist and actor, Russell Simmons, was sued based on an allegation of sexual assault where he coerced an underage model for sex. Democratic Governor of Oregon, Neil Goldschmidt, after being caught by a newspaper, publicly admitted to having a past sexual relationship with a 13-year-old girl after the statute of limitations on the rape charges had expired. Democratic Illinois Congressman, Mel Reynolds resigned from Congress after he was convicted of statutory rape of a 16-year-old campaign volunteer. Democratic New York Congressman, Fred Richmond, was arrested in Washington D.C. for soliciting sex from a 16-year-old boy. Democratic activist, donor, and director, Roman Polanski, fled the country after pleading guilty to statutory rape of a 13-year-old girl. Democrats and Hollywood actors still defend him to this day, including, Whoopi Goldberg, Martin Scorcese, Woody Allen, David Lynch, Wim Wenders, Pedro Almodovar, Tilda Swinton and Monica Bellucci. Democratic State Senator from Alaska, George Jacko, was found guilty of sexual harassment of an underage legislative page. Democratic State Representative candidate for Colorado, Andrew Myers, was convicted for possession of child pornography and enticing children. Democratic Illinois Congressman, Gus Savage was investigated by the Democrat-controlled House Committee on Ethics for attempting to rape an underage female Peace Corps volunteer in Zaire. The Committee concluded that while the events did occur his apology was sufficient and took no further action. Democratic activist, donor, and spokesperson for Subway, Jared Fogle, was convicted of distribution and receipt of child pornography and traveling to engage in illicit sexual conduct with a minor. Democratic State Department official, Carl Carey, under Hillary Clinton’s state department, was arrested on ten counts of child porn possession. Democratic Maine Assistant Attorney General, James Cameron, was sentenced to just over 15 years in federal prison for seven counts of child porn possession, receipt and transmission. Democratic State Department official, Daniel Rosen, under Hillary Clinton’s state department, was arrested and charged with allegedly soliciting sex from a minor over the internet. Democratic State Department official, James Cafferty, pleaded guilty to one count of transportation of child pornography. Democratic radio host, Bernie Ward, plead guilty to one count of sending child pornography over the Internet. Democratic deputy attorney general from California, Raymond Liddy, was arrested for possession of child pornography. Democratic Illinois State Representative, Keith Farnham, has resigned and was charged with possession of child pornography and has been accused of bragging at an online site about sexually molesting a 6-year-old girl. Democratic spokesperson for the Arkansas Democratic Party, Harold Moody, Jr, was charged with distribution and possession of child pornography. Democratic Radnor Township Board of Commissioners member, Philip Ahr, resigned from his position after being charged with possession of child pornography and abusing children between 2 and 6 years-old. Democratic activist and BLM organizer, Charles Wade, was arrested and charged with human trafficking and underage prostitution. Democratic Texas attorney and activist, Mark Benavides, was charged with having sex with a minor, inducing a child under 18 to have sex and compelling prostitution of at least nine legal clients and possession of child pornography. He was found guilty on six counts of sex trafficking. Democratic Virginia Delegate, Joe Morrissey, was indicted on charges connected to his relationship with a 17-year-old girl and was charged with supervisory indecent liberties with a minor, electronic solicitation of a minor, possession of child pornography and distribution of child pornography. Democratic Massachusetts Congressman, Gerry Studds, was censured by the House of Representatives after he admitted to an inappropriate relationship with a 17-year-old page. Democratic Former Mayor of Stillwater, New York, Rick Nelson was plead guilty to five counts of possession of child pornography of children less than 16 years of age. Democratic Former Mayor of Clayton, New York, Dale Kenyon, was indicted for sexual acts against a teenager. Democratic Former Mayor of Hubbard, Ohio, Richard Keenan, was given a life sentence in jail for raping a 4-year-old girl. Democratic Former Mayor of Winston, Oregeon, Kenneth Barrett, was arrested for setting up a meeting to have sex with a 14-year-old girl who turned out to be a police officer. Democratic Former Mayor of Randolph, Nebraska, Dwayne L. Schutt, was arrested and charged with four counts of felony third-degree sexual assault of a child and one count of intentional child abuse. Democratic Former Mayor of Dawson, Georgia, Christopher Wright, was indicted on the charges of aggravated child molestation, aggravated sodomy, rape, child molestation and statutory rape of an 11-year-old boy and a 12-year-old girl. Democratic Former Mayor of Stockton, California, Anthony Silva, was charged with providing alcohol to young adults during a game of strip poker that included a 16-year-old boy at a camp for underprivileged children run by the mayor. Democratic Former Mayor of Millbrook, New York, Donald Briggs, was arrested and charged with inappropriate sexual contact with a person younger than 17. Democratic party leader for Victoria County, Texas, Stephen Jabbour, plead guilty to possession and receiving over half a million child pornographic images. Democratic activist and fundraiser, Terrence Bean, was arrested on charges of sodomy and sex abuse in a case involving a 15-year-old boy and when the alleged victim declined to testify, and the judge dismissed the case. Democratic Party Chairman for Davidson County, Tennessee, Rodney Mullin, resigned amid child pornography allegations. Democratic activist, Andrew Douglas Reed, pleaded guilty to a multiple counts of 2nd-degree sexual exploitation of a minor for producing child pornography. Democratic official from Terre Haute, Indiana, David Roberts was sentenced to federal prison for producing and possessing child pornography including placing hidden cameras in the bedrooms and bathrooms at a home he shared with two minor female victims. Democratic California Congressman, Tony Cárdenas, is being sued in LA County for allegedly sexually abused a 16-year-old girl. Democratic aide to Senator Barbara Boxer, Jeff Rosato, plead guilty to charges of trading in child pornography. Democratic Alaskan State Representative, Dean Westlake, resigned from his seat after the media published a report alleging he fathered a child with a 16-year-old girl when he was 28. Democratic New Jersey State Assemblyman, Neil Cohen, was convicted of possession and distribution of child pornography. Democratic donor and billionaire, Jeffrey Epstein, ran an underage child sex brothel and was convicted of soliciting underage girls for prostitution. These are just the ones we know about. "Birds of a feather flock together" and these birds are infiltrating our government offices (on both sides), and using their power to cruelly and unjustly treat our fellow Americans. Until we stand, divided we fall. We have not yet began to fight. If we don't hang together, we'll all hang separately.
A week in the life of your favorite firearm dealer 8/10/2020 PLUS ADDED PANDEMIC GUN SHOW COVERAGE!
Monday 8/10/2020 to Thursday 8/13/2020 I won't do the play by play. It's more fun to just amalgamate the highlight reel of the week. I get call after call from people looking for 380 and 9mm ammo. One notable dialogue at 8PM 1: You have any 380 ammo? Me: Yes, I have 7 boxes yet 1: How much? Me: 20 to a box, 50 each 1: Great we can come pick it up now! Me: It's 8PM and I've already left for the day. Come in tomorrow 1: But we need it now. Me: I'm not heading back to work to sell a box of ammo. 1: Oh come on! I called you! You should be able to help me! Me: I am, during normal business hours. But if you really want 2 boxes - $100 bill and I'll head back in. 1: ONE HUNDRED DOLLARS? YOU JUST TOLD ME IT WAS TWENTY! Me: Twenty to a box, 50 bucks each box times two boxes 1: That's highway robbery! That's price gouging! Me: Go look online. Nobody has any 380 ammo. And if they do it is $1 or $2 per round. 1: That's ridiculous! You're not the only guy in town that has 380 ammo! (Editors note: She calls back the next day asking for 380 ammo. Apparently I am the only guy in town that has 380 ammo. I tell her there's a new policy. No ammo sales to people who have not bought firearms.) One of my surgeon customers calls me telling me his lead nurse who hates guns wants to buy a gun. I tell them to come on down. Her whole family and the doc come in and I have this dialogue. 1: Can you suggest a gun for someone who hates guns? Me: That's like a vegan walking into a steakhouse and saying "whats a good steak for a vegan?" - there's no real good way to do it and everything I can suggest you is sold out and then some. 1: Well what do you have here? Me: That's a Glock 17, here take a look. (Unload and show clear, hand her a Glock 17) 1: OH MY GOD THIS IS SO HEAVY! Me: That's one of the lightest full size firearms ever made. 1: Do you have something with a safety? I love safeties. The more the better. If you have a gun with 150 safetys, that's something I would be interested in. (I glare at the doc) Me: I've only got three or four different model pistols left in stock. Here try out this springfield XD-S..... 1: I don't like this thing in the grip here the bump.... Me: You mean the grip safety? 1: yes 1: What happened to "I love safties the more the better" (Doc nearly inhales his surgical mask from laughing) She hates guns and wants to go rent a bunch of guns before buying any guns but I explain the problem is you can go rent something, fall in love with it and the dealer can't get one for a year. Case in point: Glock 19's, Sig 365's and Springfield Hellcats. She believes she is not ready to buy a gun until she rents one. I tell her go to a range and go rent one and find out what she likes. She has just taken a "safety course" offered by the local girl and a gun chapter. The local girl and a gun chapter is run by a middle aged woman who has NRA instructor creds that is the WORST FIREARM INSTRUCTOR I HAVE EVER MET IN MY LIFE with the possible exception of James Yaeger. The last time I was at one of her events she was using the "mugger in a hoodie" paper targets and she instructed all the women to shoot him in the balls during one course of fire. Now, I wasn't wearing my Caltech shirt that day but the fast math and trig is as follows. Person shooting at a target 10 feet from the bench at a downward angle with a backstop of dirt 50 feet behind the bench... I was trying to fix someone's gun before I could do anything. I am concentrated on fixing this pistol and the first volley of gunfire breaks my concentration. I then hear the sound of dozens of 9mm projectiles hitting the concrete and skipping off the property. I drop the pistol and shout at the top of my lungs a cease fire and evetyone looks at me funny Me: KAREN! WHAT THE HELL ARE YOU DOING? 1: Oh they're just girls, let them have their fun! Me: ALL THE BULLETS ARE LEAVING THE PROPERTY! 1: What? No! How? (I point at all the ricochet gouges on the concrete of the gun club) 1: Ohhhhhh This woman is barely qualified to run a dairy queen much less instruct neophyte gun owners. Holy fucking shit. Why are people going to her? She's open, and she's a woman that has credentials that "can teach". Yeah. One day I head to lunch at the local pizza joint for lunch with Megan. Eddie makes a nice pizza and I sit down and have a pie. We rap about business as I eat my antipasato and wait for my freshly prepared clam pie to cool down a bit. It's not on the menu but he makes it special for us. Me: hey eddie how's business? ed: It's steady, lots of takeout. Me: Its a tough economy I'd take it! ed: Hey now! Me: You doing okay? ed: yeah I found that derringer I wanted at the last gun show! Me: Oh really? ed: Yeah! Someone ceracoted it tiffany blue and magenta Me: Whoa whoa whoa! Please! I'm trying to eat here! Disgusting! (Megan is drinking water and nearly does a spit take) This is the world we're living in now. Speaking of the new world... I wind up working a deal with a friend and we split 100k pcs of once fired lake city 5.56 brass. A local military contractor was doing some testing and they had a fucking ton of it and this is what was left. We got it for the cost of manpower to scrape it up and load it, clean it, tumble it and sort it and deprime and resize it. My friend has two kids that are doing online learning with school, so he made them a deal. He cut the kiddos a deal to help him clean and resize and deprime the brass as labor. We're into this stuff CHEAP. So we can sell it cheap or whatever the fuck we want in this market. I tell Ray I've got the perfect ad. We get some projectiles, some powder and primers and we run an ad. "5.56 ammo! $275/thousand! Some assembly required!" and Ray laughs his ass off. The we got it was it was loaded into some wooden ammo crates that were left over at the contractors facility. They're heavy, not cost effective to ship and came with 5000 pcs of brass each. Ray gets an idea. He has discovered that if we portion it out and throw out or sell the wooden crates, we save a ton of money on shipping. I wonder where he got this idea from. https://www.youtube.com/watch?v=nozIkRy0v-M The kiddos load all the brass into USPS flat rate boxes in no time flat and we've got ourselves loaded ready to roll product that can ship immediately. His kids did the legwork in the loading on account of my bad back and I'm tasked with lining up buyers. No problem. I start working the local gun boards, my customers, myspace, etc. You know the usual spots. This is where the wheels come off the wagon. I get a guy who comes right out the gate asking for 9k and then he blurts out "How much do you have, I'm interested in all of it" Little hint for the readers. Anyone that says they're interested in everything you have are interested in nothing you have. They're blowing smoke 99% of the time and the 1% of the time that someone does buy everything you have, you're making a killing off them or they're making a killing off you. You know the old saying in poker - if you sit down at the table and you can't find the sucker in 5 minutes, you're the sucker? It's like that. Anyhow, my ad reads as follows: $125/thousand 5.56 Brass Lake City cleaned, sorted, resized, trimmed and polished - DILLON 1050 READY! The guy calling me wanting 9k then asked how much I had left - he lines up 9 of his friends and they want to take ALL of it and divvy it up. Pick up today or when the guys can get off of work and come get it, they're working back asswards logistics as to who's truck is going to haul all of it, who's loading it and unloading and they plan to show up at 630 tonight after work to come get it. At 445 I get a message - hey can you send me a picture again one of my friends wants to check something and I send it over. And that's when the entire deal falls apart because this butthead read 5.56 brass lake city NATO headstamp $125/thousand and thought he was getting loaded 5.56 NATO spec ammo for 12.5 cents a round in 2020, told all his friends about it and shot his mouth off like a damn fool. Now he has to explain to every single one of his friends that no you're not getting 10,000 rds of 5.56 NATO ammo for $1250. Wasting my fucking time. That was my Thursday. All these people begging for ammo are driving me nuts. Yes, I have 250,000 rds of ammo. No I am not going to bend over backwards and sell it to you cheap just to be a nice person/earn your business/because your sister gave me a handjob in high school. God damn. Lady calls me looking for 380 ammo. She needs some for her CCW class that Karen is teaching and I tell her I have some left. She comes in and I tell her it's $50 a box. She leaves without buying anything. There's other miscellany but you get the gist of it. NOW here's the meat and potatoes you've wanted! The tale of the gun show! Friday 8/14/2020 I take inventory. I'm down to about 500 guns in stock and I pack as much as I can and get it ready for the show. I've got some Sigs left, a handful of Glock and a mishmash of everything else. I head to bed early knowing full well the next show will be a total shitshow. I have not done a show in a big city for nearly six months. This will be epic or epic fail. Saturday 8/15/2020 I pull chocks at 430AM, hit the flying J for diesel and pull into the local grocery store for a sandwich at 7AM right around the corner from the gun show. They fuck up my sandwich. Serves me right for buying morning of. Fuck me to tears. I start loading into the show and the entire front of the building is set up with crowd control barriers and it takes me an extra 40 minutes to thread the needle of my hand truck and loadout. I get the table setup as fast as I can and by 9AM the doors are open and we are off to the races. I will do hour blocks instead of my previous play by play for simplicity. 9AM: Right out the gate I have people asking me for Sig 365's. I have a used one with three mags and a holster I have tagged at $650. The guy asks me if I can do any better. I ask him if he's feeling lucky. I run the 4473 bet with him. He fills out the form straight on the first shot, no corrections - and he gives me $650, he gets $50 back with his ID. If there's a correction to be made, I keep half a yard. He says its a bet. He loses. As I write that up at $650, I have another guy snag a regular 365 for $700. Both their background checks clear quickly. The morning is not off to a bad start, I think to myself. I'm about to be proven wrong massively. One of my old friends from high school asked me to liquidate some of his collection and I told him that I would selectively cherry pick some stuff and haul it to the show since I didn't want to commit large amounts of table space for other people's guns. He's got a super clean Century M70 underfolder. It's clean even by century standards but I don't want to buy that gun. I have it out on the table and an old romanian guy starts checking it out. 1: What country is this from? FC: I'm not a big AK guy, it's a century so I'm guessing maybe yugoslavia or maybe romania - I don't think that its a bulgarian one, but you're welcome to take a look 1: Does it say cugir? FC: It does not 1: How do you know it does not say cugir? FC: I can see the side of it it does not say that 1: Where does it not say? FC: If you look at the side of the receiver, Century has shitty electropencil that is parkerized over that you can barely read 1: Do you have some oil I can put on there to rub on it so I can read it? FC: Look, I'll read it. What do you want to know? 1: Does it say cugir? FC: it does not. 1: What does it say? FC: Century M70 AB2 7.62 x 39 Georgia Vermont 1: it does not say cugir? I am romanian if it says cugir is romanian FC: It does not say that 1: Come on then make me a deal! (1 taps the price tag marked at $850) FC: It's the first 20 minutes of the show, I'm not making anything on the deal it's a favor for a friend of mine. I think that gun sells down here for top dollar. 1: I give you 600 cash FC: Come see me at the end of the show maybe I'll be amenable to discounting but not this early 1: You know problem with topcover right? (FC looks at topcover, it's slightly off from the hole and detent. Why? IT'S A CENTURY! WHAT DID YOU FUCKING EXPECT?!?! The care and attention to detail that only Jim Fuller from Rifle Dynamics or maybe a Bulgarian Arsenal offers? Fuck you.) FC: This gun is gonna sell this weekend as is where is, even if you think it's not right. 1: Come on make me deal! FC: I don't negotiate with terrorists or people spending under $10k. This ain't over $10k. 1: I have cash! FC: Got $850? We'll write it up right now. (1 walks away and comes back 3 minutes later) 1, while holding a wad of cash: Come on make me a deal! FC: What's your offer? 1: I will go $700 FC: Come see me at the end of the show on Sunday and I'll see what I can do. (1 gets yelled at by the county exhibition authority for not wearing a face mask correctly and he adamantly refuses to adjust his mask and starts a full blown screaming match with the poor county employee who VERY politely asked him to wear his face mask properly. As he is engaged in this animated debate, two individuals who I will call 2 and 3 show up. 2 and 3 want the underfolder AK. 2 and 3 are what we would call hip hop/droopy jean enthusiasts, their dialogue is presented word for word without adjustment. They were dropping the hard r, not me so please don't call me names for reporting the truth.) 2: ohhhhh snapppp this is what I came here lookin for! 3: damn nigga thats a straight up choppa right there you should buy that 1: HEY I WAS HERE FIRST I AM MAKING DEAL! BACK OFF! FC: No, you walked away - these two gentlemen are here and now they're interested in that gun and I'm giving them my time. 1: BUT I WAS HERE FIRST HOLDING CASH! 2: back off nigga I'm here to check out stuff motherfucker i'm gonna mess you up 3: yeah man back the fuck off before my nigga messes you up god damn shieeeeeeit 1: I AM HERE! HOLDING CASH! YOU GOING TO DO BUSINESS WITH ME? FC: You walked away. This is what happens when you walk away. It's their turn...... 1: BUT I AM HERE WE ARE MAKING DEAL (FC does an ACTUAL facepalm and presses his forehead and feels a headache beginning. A deep sigh) FC: You two.....you're killing me here. 1: I WAS IN THE MIDDLE OF MAKING DEAL AND YOU DON'T WANT TO DEAL! FC: You want to see deal? I'll show you deal! (FC grabs AK from the hip hop enthusiasts and looks right at them while holding an order pad in right hand and rifle in other) FC: You got $750 cash? 2: nigga I got $750 cash right here (pulls out wad of 100's) 3: oh shit that guy gonna get fuckin SWOOPED FC: You want me to write this up right now? $750 cash. And I'll throw in 4 mags (I pull out 4 mags loaded with x39 brown bear) 2: I GET THE MAGS AND THE AMMO FOR THAT PRICE? FUCK NIGGA YOU GOT A DEAL! (he counts out $800 in c-notes and drops his ID on the table) FC: You got yourself a rifle. (I look back at angry romanian) FC: That's a deal. You passed. Move faster next time. 1: I AM STANDING HERE! HOLDING CASH! (1 throws down a stack of cash on the table, some falls behind on my table. I pick it back up and place it on his stack) FC: You dropped some back here, don't want you thinking I shorted you or stole your money. I've got to write up these gentlemen, we're here until 5 today if you need anything else 1: (shouts at me in angry romanian while gesticulating like George Costanza complaining to Elaine about taking credit for the big salad) FC: I'm sorry about that guy, he's got some issues. That man needs therapy not another gun 2: all good nigga all good that mofo gonna get his ass beat someday FC: Today I didn't even have to use my AK, I got to say it was a good day 3: sheeeeeit he knows ice cube! this nigga og! FC: Catholic school for the win! (we fist bump) I piss off at least one person every show. Sometimes it's good to get it out of the way in the first hour, lets you concentrate on the bigger picture things. Three down. 10AM: Guy points at a green Glock 43 and Glock 19 Gen 4 that I have. They're each tagged at $725. Cash comes out and I write up the sale. Three women in a row snag black Glock 43's from me at $700 each. We are cranking now! Eight down before lunch. This is getting wild. 11AM: Colt Lightweight Commander - tagged at $1050. Sells for cash. Colt Combat Unit - tagged at $1450 Sells for cash. Glock 19 MOS Gen 4 - tagged at $825. Sells for cash. Two of them back to back. Gen 4 straight 19 tagged at 775 sells on Amex. Background checks begin to start bogging down. Thirteen down before I can even touch my sammich. 12PM: I write up three ruger LCP's in a row at $300 each. I eat half my sandwich as I sell a Kel Tec Sub 2000 at $825. Springfield Hellcat tagged at $735 goes out on a mastercharge. Eighteen before I'm done with lunch. Sheeeeit. 1PM: My old buddy Rusty Shackleford sends me some of his collection he does not want the hassle with selling. Three ugly as sin Glock 21's, three semi clean Glock 17's and two super like new 17's. 1PM is profitable as I manage to sell everything except for a 21 and 17. People are paying $650 for PD trade 21's and $700+ on trade in Glock 17's. Why? They're the only ones in the show. Not glocks in general, I mean 21's and 17's. Twenty four down and I have yet to finish my sandwich. 2PM: I have an immigrant from another country come over and try to buy a gun. He's super patient waiting for me to finish with customers that DO NOT STOP. Springfield XD goes out at $600. That's 25. He hands me the clipboard and I immediately stop everything I'm doing and I look down at the form. Not only has he forgotten 10A and 12.d.2 but he's put the city in the county box and answered the firearm is not for him and he's been convicted of misdemeanor DV. I sigh and hand the form back to him for corrections. FC: Okay, what county are we in? 1: (names city) FC: What COUNTY are we in? 1: oh! USA! FC: What COUNTY is this city in? 1: (names city) FC: We're in (names county) 1: Ohhhhh thats right FC: Who's this gun for? You or someone else? 1: Me FC: Is there any reason you've indicated you are NOT the actual purchaser? 1: Not good at reading the form I guess FC: Strike out intiial and date the change 1: Okay FC: Have you been convicted of a misdemanor crime of domestic violence? 1: No it was just a misdemeanor FC: Is there a reason why you said "yes I have been convicted of a misdemeanor crime of domestic violence?" 1: oh man I screwed that up FC: Initial and date the change (He fixes the front of the form and signs on 14 and dates on 15. I turn the page. He's written his passport number expiration date in the ID field and indicated that NICS has denied him) FC: Is there any reason you wrote your passport expiration date and number here? 1: Well I'm supposed to do that, right? (FC points to line that says SECTION B MUST BE COMPLETED BY SELLER) 1: Oh man FC: Is there any reason you checked DENIED on the NICS result box? 1: did I do that? (FC points to the box where he's put a big bold X under DENIED) 1: Was I not supposed to do that? (FC hands him another form to complete) 3PM: It is now over an hour to get this 4473 done. His wife and child have to help him with the form. I finish my sammich as I look at the front of his form and it is still marked "firearm is being purchased for someone not me" and he has to correct it. I turn the page. The date is marked 9/8/2020. FC: What day is today? 1: Saturday FC: No I mean what day is today, what calendar day? (1 pulls out his phone) 1: Oh. You want me to do another form? FC: No, strike out using a single line. And using WORDS - write the date. 1: gotcha (FC looks down at the form. the date is struck out using a single line. It now reads in words SATURDAY 9/8/2020) FC: What day is it? 1: It's saturday. FC: Saturday the......... 1: Fifteeenth? FC: Then explain why this says 9/8/2020? 1: Oh man you want me to do another form? FC: Just fill it out using WORDS AS THE DATE - MONTH/DAY/YEAR 1: okay I got you (FC hands the form back for correction) 1: I got it now! Man was that hard! (FC looks down at the form. SATURDAY SEPTEMBER 8 2020) FC: Take out your phone (1 takes out his phone and presses the home button) FC: Look at the date. What does it say and look at what you wrote. 1: Oh man FC: Is it possible for us to get the correct date? 1: Yeah man I'm so sorry.... FC: Take out your phone and write out the date in letters and words EXACTLY AS YOUR PHONE DISPLAYS IT 1: Okay I can do that (FC looks down at the form. 3:23 SATURDAY AUGUST 15. Fuck it, this is as good as it gets.) FC: Close enough. Give me your ID. (I write up my last Glock 19. It's tagged at $825. He pays cash without blinking.) I mean, I've seen some shit but WOWWWW. That's 26. 4PM: The rest of my glocks fly off the table. NIB Glock 36 - tagged at $725, gone. NIB Glock 30SF, tagged at $700, gone. NIB Glock 30, tagged at $700, gone. The only thing left on the table are 17 Gen 5 MOS's at $875 and 43X's at $775 and 44's at $400. That's 29 by 4PM. One guy does not have current ID so I have him go on the fish and game website on his phone and get a fishing license that gets me his up to date address. After 20 minutes he emails me a screencap and he's on his way home with his Glock 30. 5PM: Time to go home! I drop a stack of guns off at the local dealer for transfer on my way out the door and I make it home just before 7PM after stopping at the grocery to pick up dinner. I have a platter of fried chicken and mac and cheese. It is delicious. I get to bed early, tomorrow is going to be a long fucking day. Sunday August 16th 737AM. I wake up and get my ass to my desk. I need to replenish some of the table. I grab stacks of more guns and get them loaded up and I swing by the grocery store deli on the way to the show. It's 8AM and they are out of bread. As in the bakery has not baked them any bread for sandwiches. For fucks sake. They make me a wrap instead. And they make it WRONG. I am not happy. 10AM: Get to the show and uncover my tables and get cranking. A millennial wants a Ruger LC380 and her fucking debit card does not work. This is why you bring cash to gun shows. It's fucking useless when technology fails AND YOU HAVE NO BACKUP. She transfers money from wells fargo to her boyfriends account at chase and he tries to use the ATM to get her cash. No dice. I swear to jebus, if you take debit cards away from this generation all of them will starve to death and die alone. Gun number 30 for the weekend is hard fought but it's done. 11AM: Crank off a Sig 1911 for a guy. He sends a stand in to pick it up for him since his son is exempt from waiting period but he isn't. It goes like this. 1: I'm gonna buy this gun instead FC: why? 1: that's none of your business FC: Yes it is. Purchase of firearm with intent to resell is unlawful 1: What I do with the gun after I get it, if I want to sell it to my dad is my business not yours FC: No dice. Take a hike Dad: Lets just do it his way, he wants to give it to the other dealer that's what we'll do. Sorry for the misunderstanding. I write up 31 for the weekend. My jack sack is full of cash. 12PM: I got a guy come over, former law enforcement wanting to buy his kid a gun. He wants to do the paperwork and pay me and the gun is for his kid. I say if the gun is for the kid, he needs to do it. I shake off the forms and get the kid on the clipboard and everything goes smooth and I rack up a sale for a trade in FN FNS. That's 32. 1PM: Old school NYPD beat cop comes over wanting a deal on a springfield 1911 Long Beach Operator 1: They're 1911's! They're not popular anymore! Make me a deal! FC: ANYTHING with a barrel and a trigger is popular right now. Best deal you're getting is on the tag, which is 1250 plus tax and call in that puts you right near 1350. 1: Come on, hook a brother up! FC: That's the rate on everything, we're selling it out as fast as we can get it! Excuse me as I help these other people...... 2PM: Lady comes by and says she wants a shield EZ. I ask her why. She says her man and her firearm instructor says she cant rack the slide. I pick up a Sig 220 off the table and tell her to show me. She racks the slide. I ask her how does it feel to rack a slide properly? She spends the rest of the day wondering why they lied to her. Another lady asks me for suggestions for a first gun. I ask her what she's shot before. Answer: Nothing. She cannot rent guns and try them out because every range is booked for firearm rentals for the next 2 months out. Yeah......... Brooklyn 99 comes back over and taps on the LB operator 1: Come on man, hook a brother up! FC: That's the price, the LB operators are a sexy gun and they're not coming out of the warehouse very often 1: Come on brother! I'm just looking for a deal! How about 1200 all in? FC: Cash or card? 1: Card FC: No dice. 1: Come on brother! (more pleading for a discount) At this point the crowd at the table has heard this guy trying to get a discount for a few minutes and I've had enough. FC: Let me ask you a question 1: Sure thing FC: Do you have pictures of my nephews on your phone? 1: No FC: Did you spend thanksgiving dinner at my house? 1: No FC: Are you a named beneficiary on my will? 1: No FC: Then guess what? You're not my brother. Hell, without your money you're not even my customer. You could hear the snickers from the peanut gallery as I gave the guy a dressing down. I wasn't about to let him off the hook. I still had an out in the deck to play and I was going to use it. FC: Now, if you want this gun - you want it at a discount, I respect that. Here's what I"ll do. You feeling lucky? 1: Always! FC: Here's the clipboard. Give me a straight form, no strike outs, no errors, no mistakes, NOTHING that needs correction - I'll give it to you for 1200 on a card flat. I hand the pen back to you to fix something, I write it at 1400 all in. $200's the action, you in or you out? 1: getoutttahere FC: I'm serious. You want the discount, get the form right and you got what you want. If there's even one error, I keep the two bills. 1: It's a bet! Lets go! I've done this hundreds of times without a problem! I hand him the clipboard and he starts filling out the form. The peanut gallery is now fervently watching for the results as if it were not already a foregone conclusion. The fans had no idea but they were watching a fixed horse race. My dealer neighbor at the next table over chimes in. Neighbor: hey, are you seriously taking action? FC: ALWAYS! Neighbor: What's the money? FC: two bucks Neighbor: High stakes! FC: You haven't seen high stakes yet. Neighbor: You're a character. I'm glad that romanian guy didn't get that rifle yesterday, he was such a pain in the ass. Like even I was annoyed by it and it wasn't even my stuff. FC: I know, right? You snooze, you lose. Neighbor: But really, can I get in on the 4473 bet? FC: You can take the bookmaker out of the catholic school but..... NYPD: I'm all done! Lets see my new $1200 gun! (I pick up the forms and his ID and credit card and look at the forms. 12.d.2. is blank. I hand pen back to him and point at 12.d.2.) FC: Forgot 12.d.2. That's $1400 on your Amex, sign here. NYPD: MOTHERFUCKER THAT WASN'T ON THERE LAST TIME! FC: When was the last time you filled out that form? NYPD: 2012 FC: That's why. Here's your new gun, thank you for your action. Neighbor: How often does that bet win? FC: My house edge on that bet is 100%. Neighbor: Shit. That's fucking hilarious. Now I know how you got that watch. I just picked up a 50th anniversary sub myself (he shows me his sub and we rap about horology for a bit.) 33 down. 3PM: ONE HOUR TO GO! I write up a shield 2.0 9mm for a lady and her hubs for $650. One lady gets unhinged when I tell her she's not going to get her gun today on account of background check volume. She starts terrorizing me with WHY CANT I GET MY GUN TODAY?!?!?!??!?! This isn't dealing with Al-Quaeda, this is Al-Karen. Last minute sale 10 minutes before the show closes cleans me out of Ruger LC9's tagged at $450. 35 down. One guy snags a Glock 43X from me for $775. 36 for the weekend makes me a happy boy. I look at all the sales in cash and credit cards and I've booked quite the fat stack of cash. I've done a month's worth of business in TWO DAYS. 4PM: Show is closed. I start packing up. The dealer across from me has Gen 5 Glock 34's tagged at $1000, 9mm at $575/thousand and 380 at $750/thousand. We rap about the state of the industry. It's just gonna get worse closer to the election. I pack up and get all my stuff loaded up. 530PM: Homeward bound........I wish I was........HOMEWARD BOUND.............. 730PM: I get back to my desk and dump off a fucking STACK of 4473's. I make a bank drop for the cash and I unload and head back home. I'm starving, so I decide to have the deli re-make their culinary abortion of a wrap. 8PM: The deli is out of bread AGAIN. Are you fucking kidding me? The deli is out of bread at 8AM and 8PM? What is this bullshit..... the deli clerk takes an entire loaf of italian sandwich bread and uses it to make me a single sandwich. My colon is about to hate me. I'm waiting in line to have the cashier comp me as I see a big tall gun guy from the gun club walk in. I yell and wave since I'm wearing a mask and he comes over. 815PM: Tim O'Toole is a big giant irish gun nut criminal defense attorney that I know from the gun club. He is an aggressive and in your face about how wrong you are if you are wrong and at 6'6" he cuts an imposing presence on any courtroom he walks into. He's just bought a house in my neighborhood and we start chatting guns. He asks me if I have a Glock 17 Gen 3 9mm barrel for his latest build and I tell him that I've probably got 3 sitting on my desk. I jump on my phone and check pricing. Wholesale + $5 for him since he helps out a lot out at the gun club and he says it's a deal. He goes and gets groceries and I eat my meat tornado of a sandwich at home. Monday August 17th 10AM: Tim comes by right on time for his barrel and asks what else I have. I have a Glock 43 come off layaway and go back into rotation and he snaps up that and a 43X and a whole litany of extra parts, glock 17 gen 3 firing pin, channel liner, trigger bars, extra mags, etc. My 1 item sale I set up in line at the grocery store is now a 15 item $2500 sale. And he wants even more stuff that I can't get! We rap about the best legal film ever made, My Cousin Vinny. He gets every judge to approve his demand to videotape depositions and witness statements. Why? "I shot the clerk" - you have to watch the movie to understand this reference. Every time a judge asks him why he wants it on tape he simply says "I shot the clerk" and since we are in the deep south and every judge that's been stuck in the Louisiana mud knows the film My Cousin Vinny, his motion is approved. I laughed my ass off. I told him I was very much looking forward to regaling the federal judge with some witty banter that went along the lines of "the two utes" and he laughed his ass off. I really wanted to pull that stunt. 11AM: Lady comes in to pick up a layway and she can't fill out the 4473 and wear a mask at the same time. She also cannot stop talking. She drives me nuts but I hold it together long enough to get her stuff worked up. She also asks me to get her a Glock 23 Gen 4. I tell her it won't be cheap and it's probably going to set her back $850 by the time I beat the bushes and line one up. She says no problem, Visa okay? Done. I get a Glock 23 Gen 4 off one of my dealer buddies in NC and get it squared away. 12PM: Lunctime. It's Salmon Hollandaise special at this new market just down the road from me and I stop in and say hi. It's like a small version of Eataly. I went to high school with the owners daughters and he's got 5 million bucks into this concept. Wine bar, cafe, grocery, NY bagels delivered daily, ramen bar, raw bar, restaurant, the whole 9 yards. Amazing. The fish is delish and on the way out I run into a guy I went to ELEMENTARY school with that's now the general manager. He offers me a job managing the seafood department and I am seriously considering it given how screwed up the gun market is. 1PM: Back at my desk, have eaten the salmon and the hollandaise has found a home in my thighs. I am fat and sassy. I sell the remaning 380 I have to a customer picking up a Sig P238 and she's super stoked to get a gun. 2PM: Random walk in. Local restaurant owner that I sold a Sig 227 to a few months ago wants me to put in an SRT kit. He's disassembled the entire frame and wants me to put it togther. I explain that an SRT install is normally 5 minutes. This is easily a 45 minute job to reassemble and that's IF he has all the parts. He says he has all the parts. I begin putting the gun back together. He does not have all the parts. He goes home and says he will look harder for the missing part. 3PM: I look online for the missing part. It's $5 and 4 weeks to ship and in stock at most vendors. This sucks. I call some favors and I know of one in the mid atlantic area I can get here in a week in case he can't find it. As I get off the phone he walks in with the missing part. Just an FYI for the readers. In ten years, I have had "bag o gun" come through the door on three previous occasions. First: Sig 229 from local PD. Chief took it apart, couldn't put it back together. Had no backup gun and had to go on duty in a few hours, I was asked to put it together. Second: My buddy Bruce in PA. He detail stripped his 220 and got it wrong. I put it back together and sent it back to PA. Third: Rusty and his 226. See above. He missed some parts. I put it back together and sent it back to Texas. If anyone thinks they see a pattern here it's because there IS a pattern here. I start work on the 227 and this thing is a bitch and a half. The ejector, which is a 25 cent stamped metal part is not to spec. Sig's QC sucks. Their 3mm hole PRECISELY stamped in one place isn't 3mm and isn't precise. The sear pin that has to go through the left side of the frame, through the ejector, through the left side of the sear, through the sear reset spring, through the other side of the sear, through the safety lever and through the right side of the frame is NOT COOOPERATING because the ejector is too tight. I have to beat on this thing with a drilling hammer to get it to go. 45 minutes of anger and frustration later, 227 is back in action with the garbage one piece E2 grips. For this pain, I bill $100. He tells me he should have had me do it in the first place. I say he's right but it's a tough job doing Sig classic pistols right. They're a very challenging platform. 4PM: I ship off some more 5.56 brass and pay my buddy Ray. I head home. 5PM: Beef jerky time. I hope you all enjoyed these stories. They have not been embellished because they need no embellishment. Stay tuned for my next story where I post about the state of the firearm industry! God bless and have a wonderful Saturday. PS - and this is how you do a "week in the life" thread, you fucking imposter. https://www.reddit.com/guns/comments/i759qj/a_week_in_the_life_of_your_favorite_firearm/
Private poker clubs have been popping up recently all over Texas and their legality is currently under debate. Owners of these clubs claim they are operating in accordance with Texas' gambling laws by only charging membership fees and dues rather than taking a percentage of the pot. Critics claim they are merely exploiting a loophole in the law. Poker clubs aren't illegal in Texas. Anyone can gamble for money in a private place as long as the house doesn't profit from the game. It's a bit of a gray area, according to Guerra Thompson. Is Online Poker Legal in Texas? As a rule of thumb, a poker site that accepts American players will also accept poker players from Texas. It’s NOT illegal to play online poker in Texas. In fact, unlike Washington, Texas poker players can legally play on offshore poker sites, like Bovada. The only illegal activity is owning or operating a poker room. Poker in Texas seems like a no-brainer. After all, the most popular poker game in the world bears the name of the state. However, the unfortunate reality is that Texas is largely hostile to the idea and, at present, seems unlikely to join the ranks of states with legal online poker.. Fans of poker have two major roadblocks working against them when it comes to online poker in Texas. Texas Online Poker Sites - Is Poker Legal In Texas ? - Poker Law. Texas Players Accepted Online Poker Sites. Is it Legal To Play Poker in Texas? The Lone Star State is home to the popular poker games of Texas Hold ‘em, and Omaha, and this legacy is reflected in a pretty fair set of gambling laws. By these definitions, even the game of poker, which by majority of the poker community is considered as a game of skills, is not exempted. Even with all these seemingly restrictive laws, there are equally as many legal loopholes that are constantly exploited by Texas residents.. The most infamous loophole is caused by a combination of the following statutes found in Chapter 47.02, section E of One of the greatest mysteries in the world of poker is the notion that Texas Hold’em – and any other kind of poker game – is illegal in the state of Texas. No matter the mainstream popularity of poker or the many reports showing the level of skill overrides luck in the game, Texas lawmakers have never legalized casinos or card rooms. The state of Texas tends to be a conservative one, and There is only one venue offering indisputably legal live poker in Texas, and it also happens to be the state’s only casino. In spite of Indian tribes being pretty active in operating casinos in other states, they have met with more difficulty in Texas. Texas has a long history with the game of poker. Some of the game’s biggest historic figures, including the original players in the World Series of Poker like Doyle Brunson and Amarillo Slim, began playing back room games throughout Texas.. The biggest game in poker—Texas Hold’em—even gets its name from the state. In fact the Texas Legislature even recognizes the city of Robstown as
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