Want To Make A Million In The Gun Business? Start With Two Million.

If you decided to invest in the stock market on June 15, the Dow that day stood at 21,359. The day after Thanksgiving it closed at 23,557. In other words, just about any stock you would have bought in June was probably up at least 10% over the following five months. Unless you made the mistake of buying Smith & Wesson stock, which was selling for $24 on June 15 and closed on November 24 at $13 a share. You would have done a little better with Sturm, Ruger, which was at $68 a share in mid-June and ended last week at $50, a nosedive of ‘only’ 25 percent.
stock prices

Talk about a Black Friday! The old joke used to be that if you wanted to make a million in the gun business, start with two million. That old joke seems to be coming true in spades! But if that’s the case, and I thank our good buddy Shaun Dakin for pointing this out, how come the FBI-NICS background check system set a new, single-day record for the number of received calls? They claim they were ‘flooded’ with 203,086 calls on Friday, which broke the single-day record of calls – 185,713 – set on Black Friday in 2016.
Before all my friends in the gun violence prevention (GVP) community start lamenting that America is once again becoming awash with guns, let’s remember that on average, more than 40% of the calls received by NICS are for license verifications, private sales and other issues which have nothing to do with the over-the-counter movement of guns. And when the FBI publishes their total monthly stats for November, I’ll take the short odds that retail gun sales will continue to show the same 15% slide that has been going on all year.
Want to see a really great investment opportunity in guns? Add some corporate debt bonds issued by Remington Arms, which has dropped from $65 to $14 over the last six weeks. And it appears that this trend will not only continue but may get worse, with Remington broadly hinting that a default on their debt may not be far behind. And the reason why their bonds are turning into junk is the same reason that prices for Ruger and S&W stock continue to fall, namely, that nobody’s buying their guns.
Incidentally, Remington happens to be the ‘flagship’ company for an outfit known as the Freedom Group, which was the brainchild of an amateur gun nut named Steve Feinberg who cobbled Remington together with Bushmaster, DPMS, Marlin and a couple of smaller companies to create what was described as the leading “innovator, designer, manufacturer and marketer of guns and ammunition” anywhere, anytime, anyplace. I’m quoting from the press release for what was supposed to be a big $200 million IPO in 2010. Now they can’t pay off their $275 million debt. Oh well, oh well.
I don’t follow the ins and outs of the stock market but I do know something about the price of guns. Right now I can buy a Smith & Wesson Shield pistol from Bud’s Gun Shop for $299. I can buy the same gun from the Grab-A-Gun website for $279. I’ll have to pay my local dealer a few bucks to do the transfer, but a year ago that gun was selling for $379. I can pick up a Ruger AR-15 for under 600 bucks; that man-killer used to sell for $899 or more.
In my lifetime I remember when every, single American kitchen had a Mixmaster next to the stove. I also remember when I first put my hands on the keyboard of an electric typewriter made by IBM. If the stock prices of S&W and Ruger continue to slide, those company names will wind up like Studebaker, Philco and Trump Air. Remember something called a pay phone?

 

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Don’t Worry – The NRA Isn’t Losing Any Sleep Over ‘Fix NICS.’

Want to start your day off with a good laugh? Take a look at Wayne-o LaPierre blasting off into outer space in 2016 with a video message about the FBI-NICS background check system which came out two years before last week’s Fix-NICS bill was introduced by Senators Chris Murphy (D-CT), a long-time ‘enemy’ of the 2nd Amendment and John Cornyn (R-TX), one of the NRA’s best friends.

wayne              Everyone loves this bill.  The NRA and the NSSF jumped on board; ditto Gabby Giffords and Everytown – Moms.  Well, almost everyone. The group which claims it’s the only group standing between freedom and fascism, a.k.a. Gun Owners of America, told its members to demand that we stop trying to ‘fix an unconstitutional system’ because background checks of any kind are an ‘infringement on 2nd-Amendment ‘rights.’

But back to Wayne-o patting himself on the back for being a champion of FBI-NICS.  Ultimately the NRA had no choice but to support the Brady bill because the idea of an instant background check enjoyed wide public support back then, just as an extension of background checks to secondary transfers appears to enjoy the same degree of public support now.  But as a detailed report from the Brady Campaign points out, the moment that the Brady bill became law, the NRA began attacking its constitutional validity even before the system went online.

So when Wayne-o states that the NRA has ‘fought for 20 years’ to put the records of persons adjudicated to be mentally incompetent into the NICS system, what he should have said is that America’s oldest civil-rights organization has fought to keep the FBI-NICS system as far away from being an effective tool for reducing gun violence as it can. But when you watch this video and the phrase ‘the truth about background checks’ flashes across the screen, you can be sure that ol’ Wayne is getting ready to blast off into outer space.

But now that Congress appears ready to do exactly what the NRA claims should have always been done, namely, to make sure that the data sent to NICS really includes the names of every individual whose background, under current law, does not allow them to own a gun, what should the boys from Fairfax be doing to prove their commitment to 2nd-Amendment ‘rights?’ Because if this bill gets a positive vote and the Trumpster signs it into law, the NRA’s rationale for not expanding background checks to secondary sales disappears.

I’m not saying that the process of widening background check procedures to go beyond over-the-counter sales would be a walk in the park or a day at the beach. But the good news is that the NRA has been forced to support the idea that only ‘law-abiding citizens’ should be able to own guns. And if NICS is fixed to everyone’s satisfaction in a way that really prevents the criminals, the drug abusers and the mentally ill from walking into a gun shop and buying a gun, the idea that private gun transfers requiring background checks is a violation of the 2nd Amendment wouldn’t pass muster in any court.

When all is said and done, the NRA’s opposition to background checks boils down to one, simple thing; namely, that government regulation of the gun industry is a bad and unnecessary thing. In that respect, the gun industry’s opposition to regulation is no different from every other industry – banks, financial services, energy, you-name-it – who want to lessen the regulatory burden because one way or another, regulations drive up costs.

The NRA, the 2nd-Amendment Foundation, Sean Hannity and every other pro-gun noisemaker can talk about gun ownership as a Constitutional ‘right’ all they want. But it’s simply a convenient catch-phrase for obscuring a basic truth. And that truth happens to be the unalterable fact that if someone aims a loaded gun at themselves or someone else and then pulls the trigger, the damage can be immense.  And only government has the resources and the authority to prevent such acts from taking place.

FIX NICS? Not A Bad Idea.

              The Mountain Shakes and Out Comes A Mouse ~ AESOP’S FABLES.

Is this how we should view the ‘FIX NICS’ bill introduced in the Senate today sponsored by Senators Murphy (D-CT) and John Cornyn (R-TX), the latter who’s also shepherding the national CCW-reciprocity bill through Congress and onto Trump’s Oval Office desk?

NICS

Or perhaps we should refer to this bill as ‘Better Late Than Never’ because it plugs some holes in a process which is only twenty-five years old.

Figures that the Wise Men and Women of the U.S. Senate would come up with something after the recent spate of mass shootings which seem to be breaking out with almost weekly regularity after almost a year’s peace and quiet following the inauguration of You-Know-Who. And by the way, don’t think for one second that John Cornyn didn’t get his marching orders from the folks he represents who work in Fairfax, VA even though he’s supposedly the senior senator from the Lone Star State. Because what the NRA doesn’t want their Faithful to know is that they have quietly supported laws which strip domestic abusers of their guns in Oregon, South Carolina, Wisconsin and several other states.

In short, what the Cornyn-Murphy bill creates is a process that will providing funding to states which develop and implement a better fail-safe system for sending relevant information to FBI-NICS, and also require the Justice Department to evaluate the extent to which every federal agency (read: Department of Defense), and state meets the compliance goals.  It also creates a new program which (I quote from the Press Release which accompanied the bill makes sure that, “states have adequate resources and incentives to share all relevant information with NICS showing that a felon or domestic abuser is excluded from purchasing firearms under current law.”

The phrase, ‘under current law’ obviously refers to the questions which must be answered prior to a background check by everyone who walks into a gun store and buys a gun. If you reply in the affirmative to any of these questions about your legal background, you fall into what is called a ‘prohibited category’ and in theory, the FBI will find you in their database and the purchase or transfer will be denied.  The whole point of the FIX-NICS law is to make sure that every jurisdiction sends forward all the information in their possession to keep the names of all ‘prohibited person’ accurate and up to date.

Generally speaking, you cannot get a gun if you are “under indictment or have ever been convicted in any court for a felony, or any other crime for which a judge could imprison you for more than one year.  You also are a ‘prohibited person’ if you have been convicted of a misdemeanor crime of domestic violence.  But here’s where things get tricky. The NICS approval goes through if you were convicted of a misdemeanor other than domestic violence punishable by ‘’two years or less.”  And how many state felonies are plea bargained down to misdemeanors?  Plenty.

The good news about this bill is that any time the word gets around Gun Land that the government is ‘cracking down,’ don’t ask me how, don’t ask me why, but people become more serious about complying with the law.  I’m not saying that gun owners aren’t law-abiding. Of course they are. But if you live in state which doesn’t require a background check for a private gun sale, all of a sudden the number of such checks starts going up. If you have lots of guns lying around the house, maybe you buy a safe and start locking the bangers away.

The FIX-NICS won’t put the fear of God into anyone who wants to use a gun in an illegal or improper way. But it does bring government back into the issue of gun safety, and that is exactly where the government belongs.

 

Are We Finally Getting Sick Of Guns?

Thanks to a note from Mark Bryant, who founded and runs the awesome Gun Violence Archive, I remembered this morning to go and look at the monthly report from FBI-NICS, which details the number of background checks for every gun transferred over the counter by a federally-licensed dealer anywhere in the United States. I know, I know, background checks still don’t cover most private gun transfers, but since NICS does cover every sale of a new gun, the month-to-month comparison is a very exact way to understand the state of the gun industry and, by extension, the degree to which Americans want to own guns.

texas             The NICS numbers for October are probably the most important monthly numbers of the entire year because the hunting season gets going in the Fall and even though a majority of American gun-owners don’t engage in hunting, this is when big-box stores like Cabela’s start running sales, this is when the Outdoor Channel starts showing hunters trekking through the Great Outdoors (although most of them go out to their blind in an ATV) so this is when the talk about guns is in the air.  Bottom line: if you are a gun dealer and you don’t have a good monthly sales in October, you can kiss the year goodbye.

Ready for the October numbers? Hold on to the seat of your pants. Not only do the numbers for October show a remarkable lack of gun sales, the drop is much greater than what has been going on throughout the year. Everybody assumed that gun sales under Trump would never match what went on under the Kenyan, but to the great surprise of Gun-nut Nation, the drop-off following Trump’s inauguration was only about 10 percent. And given the extent to which sales during the Obama ‘regime’ were somewhat inflated due to the irrational fears pumped up by the boys in Fairfax about how all guns were going to disappear, dropping back to 90% of sales levels recorded in pre-Trump years wasn’t seen as all that bad.

On January 22, Smith & Wesson’s stock price was $20 bucks a share, yesterday it closed at $13.65.  The old joke is that if you want to make a million in the gun business, start with two million. The joke seems to be coming back – this time in spades!

Now here are the actual numbers from NICS. Total background checks in October 2016 were 1,267,000.  Background checks for last month were 1,037,628.  For the nine months ending September 30, 2017 the overall drop in NICS was somewhere around 10 percent.  For October it’s more like 20 percent!  And remember that October is the beginning of the gun season; yea, some season.  And by the way, the decline was greater in handguns than in long guns, and it’s handguns which now determine the health of the gun industry because everyone is supposed to be walking around armed, remember?

What the NICS numbers tell us is not just that the bloom is off the rose for the gun industry, but more important, that the attempt to promote gun sales by appealing to fears about crime and violence may be falling flat.  And I have to assume until someone tells me otherwise, that what happened in Las Vegas last month and in Sutherland Springs this week may have finally been a game-changer when it comes to believing that someone, anyone is safer if they’re walking around with a gun.

Gun-nut Nation can celebrate all they want about the ‘good guy’ in Texas who stood outside the First Baptist Church, put a couple of slugs into Kelley as he was driving away. What about inside the Church which, by the way, certainly wasn’t a gun-free zone? As horrible as it seems, it may take deaths and injuries to hundreds of people in Vegas and Texas to finally convince Americans that ‘good guys with guns’ don’t offer any real protection against violence or crime. Is this worth the lives that have just been lost?

Thanks again Mark.

Everyone Supports Universal Background Checks. So What?

As a member of the NRA (I’m actually an endowment member so they can’t throw me out no matter what I say) I get emails from the NRA-ILA alerting me to state and federal gun laws which either weaken or strengthen gun ‘rights’ and the NRA’s response to such laws on both sides. The NRA has never bumped into a law which might make it more difficult for red-blooded Americans to exercise those precious 2nd-Amendment ‘rights,’ but as a follower of don Corleone’s admonition to Michael about keeping friends close but enemies closer, I always read what the NRA-ILA has to say.

NICS   The last missive I received contained a summary of laws recently introduced in Congress which represent “longstanding proposals that would burden innocent Americans at every turn.”  Chief among these proposals is the old bugaboo about ‘universal’ background checks which the NRA characterizes as a “perennial favorite of the gun control crowd,” because it “seeks to interpose the government (and expensive fees) into every exchange of firearms, including between trusted neighbors, close friends, and even family members,”  This warning is then followed by the NRA’s coup de grace statement about all GVP-backed legislation, namely, that it will “chip away at the right to keep and bear arms until it becomes out of reach to the average American.” The same, old, slippery-slope argument which is used against ‘responsible’ gun regulations every, single time.

The gun violence prevention (GVP) community always cites the endless public surveys which allegedly show that a solid majority of Americans, even gun-owning Americans, even NRA, gun-owning Americans, are in favor of some extension of background checks beyond the initial, over-the-counter sale. I don’t believe these polls not just because the NRA is totally against such an idea, but because those survey results don’t square with anything I ever experienced in selling more than 12,000 rifles, shotguns and handguns in my own retail gun store.

I can guarantee you that every time I sold a gun in my shop, the purchaser filled out an ATF Form 4473 which I then used to contact the FBI-NICS examiners in West Virginia in order to get an approval for the sale.  When the ATF audited my shop in 2013, they couldn’t find one, single instances in which we failed to get FBI-NICS approval before completing a sale. But I can tell you that at least half the customers made overt and nasty comments about the ‘goddamn government,’ or the ‘goddamn Kennedys,’ or the ‘goddamn Clintons’ while they were filling out the 4473 form.  And I can also say without fear of contradiction that had the instant FBI-NICS check been voluntary, those same customers would have turned it down.

Nobody likes the government when it comes to be told what we must do.  We pay taxes because we have to pay them, we (usually) drive at the speed limit because otherwise we might end up adding points to our license, paying a fine and seeing our insurance rates go up. In fact, many of us wouldn’t even bother to buy automobile insurance except we don’t have a choice. So why would anyone believe that just because people say that FBI-NICS is a ‘good thing,’ that those same folks can’t wait for the imposition of universal background checks?

Last month more than 26,000 guns were purchased in New York. How many private gun transfers took place? Less than 700. In New York State every gun transfer now requires a NICS background check, and it is simply not possible that in a state as big as New York that less than 3% of all gun transfers go between private hands. And yet many of the same folks who can’t be bothered to walk into a gun shop to give a gun to someone else will say they support universal NICS checks.

Know why the NRA opposes NICS checks? Because they know how gun owners really think, which is still something of a mystery for the GVP.

The NRA Tilts Loony Right Or Nobody Will Buy Guns.

I received an email yesterday from someone who read my Huffington column on the NRA and white supremacists and he wanted to know why the NRA leadership continues to tilt further and further not just to the Right, but to the loony Right. And a quick glance at the latest FBI-NICS background checks might contain an answer that both he and the gun violence prevention (GVP) community should consider with interest and care.

wayne             While obviously background checks can’t give totals for all transfers of guns, what they can give is an indication of the trend of new guns coming into the market each year. And when all is said and done, this is really the most important number which needs to be followed because there is simply no getting away from the fact that the more guns out there, the more people get hurt with guns. And please, please don’t send me an email telling me that it’s bot the gun, it’s the person holding the gun, okay?

Back in March, some gun-sellers were reporting that sales were still strong, others said sales were off – it was a mixed bag and nobody was sure which way the gun market would eventually go. But that was March and this is now August, and if this month turns out to be as lousy as last month, the fall-off in demand for guns may turn out to be much worse than even the most pessimistic analysts have projected to date.

For July 2016, the FBI-NICS phone bank racked up 1,143,824 calls covering gun transfers, including 628,725 handgun transfers, which from the perspective of gun violence is the most important category of all. Last month, July 2017, the total gun transfer number was 845,007, with handguns comprising 480,124 of the total calls. That’s a month-to-month drop of 26%, with handguns sales dropping slightly less by 24%.

Historically, July and August are always the slowest months in the gun business because despite the necessity to always have that gun around to protect yourself from thugs, terrorists and God knows what else, guns just can’t compete with the beach. Which is why a same-month comparison from one year to the next is a potent indicator of the overall health and outlook of the industry as a whole.

Let’s take a somewhat longer view.  From January 1, 2016 through July 31, 2016 the FBI rang up 4,712,334 calls for background checks on handguns; for the same period in 2017 the total was 4,257,132, a decline of roughly 10%. As for long guns, the slippage was also 10%, from 2,913,489 to 2,607,137. In the last two months, the drop in handguns sales year-to-year was nearly 20%.

If the more recent trends continue, the bloom is not only off the rose, the whole rose bush might be starting to dry up and wither away. Which means that not only will revenues within the gun industry collapse, but revenues for gun organizations like the NRA will also begin to decline.

The little secret which the NRA doesn’t want you to know is that for all their recent forays into television and video, the truth is that most people come into contact with America’s ‘oldest civil rights organization’ only when they walk into a place that sells guns. Ask yourself this question: ever seen an advertisement or logo for the NRA in the local convenience store, Walmart or CVS?

The problem for the NRA is simply this: in order to augment or even maintain their financial base the only thing that really works is to keep people buying guns. They can peddle concealed-carry insurance or holsters that fit inside bras or t-shirts which proclaim your 2nd-Amendment ‘rights,’ but nobody’s going to buy any of that crap unless they already own a gun. And how do you get more people to buy guns when no matter what you say, a gun simply doesn’t represent a necessary part of everyday existence like your car keys or your droid?

A New Monthly Chart On NICS Background Checks.

I have decided to keep a running record of FBI-NICS checks to help keep our friends in Gun-nut Nation at least somewhat honest, although as John Feinblatt has just reminded us, keeping that bunch honest is about as easy as keeping me on a diet. But be that as it may, with certain caveats that I am going to quickly list, the monthly background check numbers published by the FBI are still an effective measurement of the health and welfare of the gun industry, which usually stands in direct opposition to the health and welfare of the general population.

The caveats about using the NICS numbers as an industry measurement are as follows:

  • Only a handful of states require that all gun transfers go through NICS, so a large number of guns move from one person to another without any paper trail being created at all.
  • On the other hand, what NICS does indicate is the number of new guns that are added to the civilian arsenal each month, and that’s the most important number of all.
  • Of course NICS doesn’t capture the new gun transfers in any universal sense, because many states opt out of the NICS system when a resident holding a concealed-carry license buys a gun.

nicsBut the bottom line is that what we do get from NICS is a very clear trend of the degree to which America is or isn’t arming up. And basically this is the trend which is most important for determining the extent to which America will continue to suffer from gun violence, because without guns, there is no gun violence – it’s as simple as that. And please, please don’t give me the bromide about all we have to do is keep the guns out of the ‘wrong hands.’ Enough already, okay?

The total NICS number for each month is comprised of 24 different categories, of which only 4 categories – handguns, long guns, other guns, multiple sales – represent contacts with the FBI call center to get authorization to sell or transfer a gun. The other categories represent either checking the validity of gun licenses, or redeeming previously-pawned guns, or transfers between individuals rather than between a dealer and a customer; in other words, background checks which don’t represent any new guns being added to the civilian arsenal at all.

I am going to start publishing a monthly NICS chart which will compare numbers over time and will cover the following categories: handguns, other guns and personal transfers of hand guns. Why only handguns and other guns? Because these are the guns we need to worry about since handguns are usually what are used in gun violence of all kinds, and other guns are assault-rifle receivers to which the owner then attaches a bolt and a barrel and he’s got a very lethal gun.

Here’s our very first chart:

Jun-17 Jun-16 2017 to date 2016 to date.
Handguns 569,149 582,821 3,777,008 4,083,589
Other Guns 29,730 49,220 195,537 218,023
Private transfers 1,884 1,198 11,845 8,231

 

These are some interesting numbers, and they fly in the face of comments from various Gun-nut noisemakers that there hasn’t been any ‘Trump slump’ on guns.  Well, I guess a drop of more than 306,000 new handguns hitting the market between January and June isn’t anything to worry about, and a 30% increase in background checks between private buyers and sellers clearly indicates that gun owners just won’t go along with private NICS checks. Incidentally, I’m not going to track long gun transfers, but you should know that long gun checks dropped from 2.5 million in 2016 to 2.3 million so far this year. As handguns go so does the whole gun market, oh well, oh well.

If I had to estimate, I would say that a drop in handgun and long gun sales of roughly 500,000 units means a loss of revenue for the gun industry of somewhere around $150 million bucks. I don’t think that really makes up for Wayne-o going to the White House for the Easter Egg roll.