Hacker News new | past | comments | ask | show | jobs | submit login
America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery (nytimes.com)
298 points by Deinos on May 3, 2019 | hide | past | favorite | 295 comments



Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.


I like Jason Scott's take on it [1]:

"I wonder how many times we're going to keep seeing news media post these sorts of news stories as a 'woah, a tornado hit this landmark' without including one single line about 'the landmark was put in the care of a tornado factory a few years back and never saw another repair'"

https://twitter.com/textfiles/status/1096630478965260289


I get that money is money, but I feel like we desperately need to make conflict of interests prosecutable, so we can kill the self-serving mess that are LBOs.

In what universe is "I borrow a bunch of money, buy a company, then force the company to basically borrow money from me" a value-creating operation? Cuz it sure isn't this one.


The only fix required would be changing slightly the definition of fiduciary duty expanding the concept to ALL stakeholders including customers and the people living where those businesses are based and it would become illegal overnight to do that.

It will never happen.


Forced "public service charter" (class B corp) for repeat, no-regret offenders (like a corporate version of public restitution, but in perpetuity)


The zeroth law?


lol yeah


Do they really buy the whole company, or do they just buy enough to control it?


The alternative to leveraged buyouts is probably not a healthy company, it's more likely a slowly dieing company that goes out with a whimper, not a bang.

Is one way better than the other?


So you're saying these firms are just being rewarded for putting the beast out of is misery and being the one to fire the gun?

The other way is absolutely better. The "bang" you hear is the bursting vacuum of PE sucking all the value out of the company, depositing it in their bank account, and leaving others holding the bag, a bag that's now far bigger because the company now has less to no ability to satisfy its obligations.

But the PE firm made billions for (sometimes, less than a year of) "management and consulting fees".

These kind of leveraged buyouts are perilously close to what Tony Soprano does to Ramsey Sports and Outdoors - take a controlling interest (albeit by a different method), utilize the business' credit lines, assets and collateral to bring in a lot of (temporary) value, transfer it out of the company, and leave the smoldering ashes of a company massively bankrupt with bad debts all over town, including many it didn't have before the buyout happened.


You're leaving out the most common case: a company which is viable not generating enough profit growth to excite Wall Street. Most of these companies had solid businesses until their assets were sold off and other short-term profit maximization measures started to impact their long-term viability.


Those aren't the only possibilities. LBOs don't necessarily strip assets. There are already rules that claw back asset stripping prior to a bankruptcy. Perhaps they need to be strengthened.


We should probably just strip all societal assets that might potentially fail and give the money to the richest guy we can find, they're going to acquire all that money and we're going to die poor anyway, indeed we could just round up the poor people and shoot them and give the proceeds of the sale of any assets to that same guy; optimisation, it's what makes capitalism great, huh.


Interesting ... "money is money". But what exactly is fiat currency? Some would say it is not really money.


https://en.wikipedia.org/wiki/Asset_stripping by any other name, a scourge of business in the 80's. Today, it's less vocally lambasted and less public outrage as in the 80's, which in today's internet times, raises much thought as why that is so. I suspect that it's due to lack of media attention compared to back then.


This wasn't asset stripping. They did a dividend recap. Asset stripping is transferring assets outside of the credit group.


In this instance they transferred debt from outside the company, into the company.

Not sure what terminology you would pick for that - "debt bombing" or "reverse Phoenixing"! The end result is that they stripped it. Then if any liability, they could write that debt off against tax liability and or factor off the debt. Failing that - asset write-off equally works well on tax gaming. Then there are the remaining assets (Like the Brand name for example) that they could sell off cheaply to a company they indirectly own that specialises in licensing... It's a vicious circle at every level when it comes to finance in business. Good news or bad news - somebody profits and a few more people pay.

I will confess - I'm still unclear of the legal and accounting practice aspects that allowed the parent company to push down debt like that. But then debt loading is another way of stripping a company. Though does read a bit like Phoenixing, just in variation that appears to skirt the law and respective regulations in finance and companies. Though, how they could push down debt without raising any flags would be a candidate for root cause in this travisty.


Yeah the article goes through the mechanism, but it's not a new story that private equity firms buy companies with debt that the target company ends up owning. It's a little bit interesting to read about how it's done but it's basically the same thing you can read about in Barbarians At the Gate. It's not that they wanted or didn't care about Remington going bankrupt -- if Remington doesn't pay back those loans, it'll be harder for Cerberus to fund the next LBO, Cerberus would prefer that the hedge funds who loaned the money make back their money -- it's that it's highly leveraged and very risky. They assume it won't work every time, but the law of averages isn't comforting to the people working at Remington.


That's how Mitt Romney got rich


Mitt Romney's deals at Bain Capital were overwhelmingly growth equity oriented


"Corporations are people, my friend"


PS - the owners of these company's are also complicit as they let the PE shops come in in the first place.


Why is it _wrong_ for owners to do what’s best for them? Most people don’t own a business as a charity- they own it to make money. If a PE acquisition is the best path to a lucrative exit, why shouldn’t they do it?


Why is it wrong to hurt other people for your benefit?

If you are an alien learning about humans, you should start with some children's books. I think you're missing some pretty fundamental knowledge here


Who is a founder necessarily hurting when they sell their company to a PE firm?

What I'm hearing you say is that once a founder starts a business and hires a single employee they must operate that company until death. That seems like a ridiculous position to me and perhaps you're missing some fundamental knowledge on life. If that were somehow codified to law, I would've never started a business.


Surely there's a lot of middle ground between "it's wrong to sell your company to a PE firm that will suck out all its money" and "once you hire a single employee you must operate that company until death".


one could also sell their company to the employees[1]; there are many alternatives that doesn’t involve “liquidation” and “selling out”.

[1] http://www.americanbusinessmag.com/2012/03/selling-your-busi...


Because selfish behavior is still wrong even if it's incentivized by a system.


I don’t believe that looking out for one’s own interests (“selfish”) is wrong. My dad taught me a valuable lesson as a child- the world owes you nothing and as long as you understand that you'll be fine. I take that to mean that nobody else will look out for you so you have to do what's best for you.

In my situation, my employees profited nicely from a PE acquisition. They all got a sizeable transaction bonus. Not only that, they received additional job security with the backing of a large company.


Your dad was half right: the world owes you nothing. Unfortunately, there’s no guarantee that you’ll be fine if you understand that.

The universe is a cold, uncaring place. Part of the reason we create societies is to improve on that.


> the world owes you nothing and as long as you understand that you'll be fine

Conversely, without the World you are nothing. You can't survive without the help of others.


I'm sure most of HN is aware of where selfish behavior can go wrong. My favorite personal example would be a "tragedy of the commons."

For certain, groups where individuals all act in their own self interest sometimes come up with the best solutions for everyone. It bothers me that people believe either maxim must always be true for all circumstances. (this is effectively socialism vs. libertarianism) It seems very clear to me that each camp has supporting examples, and that there are very few universal maxims.

Getting back to the main point, I think there have been many instances were selfish private equity has made things worse for people, which does not discount instances where it has made things better.


Sure, the only things in life that are certain is death and taxes. Nothing else is really that black and white.

I still don't believe that a founder doing what's best for them and their family is "wrong". Absolutely, employees should be a concern and a founder looking to be acquired should do whatever possible to ensure a successful future for them as well. But to say that a founder must own a company forever and ever with no chance at ever exiting is not something I can agree with.

No hard feelings, but I hope we can both take away here that there are nuances to this topic (and every other topic) and to say that "selfish behavior is wrong" is too extreme a statement.


No offense taken at all.


Did I ever say it was wrong? I'm just saying pointing at a single cause for a complex issue, is not a great way to address the problem.


Hostile takeovers do happen.


Are you positing that you can just acquire any company without the owners (shareholders) consent? Because that's not how this works...


the owners have to vote for it


> Because private-equity firms appear frequently as villains in the press, many people assume that they cater mostly to the superrich, earning high returns on investments for billionaire clients. They do. But by far the most important piece of their business — 48 percent, according to the data-analytics firm Preqin — is investing capital for American pension funds.

This doesn't get mentioned often enough when talking about the "1-percenters" and the wealth gap in Western countries, i.e. that most of the capital behind all of the current economic and social system is directly or indirectly held by part of the general populace itself.

The issue is of course that the other part of the populace (generally speaking people under 35 who cannot put money towards their retirement funds or who can only get temp jobs) are not part of this financial arrangement and, as it so happens, are also some of the worst affected by the current economic set-up (those temp jobs I was mentioning are not as great as the normal full-time jobs held by people whose pension funds are managed by the companies investing in Cerberus).

Afaik almost no politician has focused on this social and economical contradiction, if I may call it this way, some of them are putting whole of the blame on the 1-percenters, some of them are choosing to ignore it all together, but almost no-one has actually looked at the real numbers. And the real numbers tell the story of a society divided in two, a part that will manage to enjoy its pension and the other part that has no clue how will pay for its old age.


The top 1% own 40% of the wealth and have realized 95% of the increase in wealth over the past decade: https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite... "More recently, in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as half the human race."


The claim that the top 1% have realized 95% of the increase in wealth over the past decade is spurious. I think the original study[1] that claim came from only argued that was the case for percentages of income growth, which is not wealth, and only true from 2009 - 2012.

I think it has been propagated since then as a different claim that the top 1% had 95% of the increase in all the wealth for the past decade. I don't think there is any evidence for this stronger claim.

[1]: https://eml.berkeley.edu/~saez/saez-UStopincomes-2012.pdf


You're absolutely right, I misread that statistic.


And you get an upvote because answers like yours are simply beautiful to read.


Both of these things can be true: that the top 1% own a large fraction of wealth, and that an even larger fraction is owned by the pensions and retirement plans of the non-wealthy.

Wealth comparisons are tricky, e.g they'll show that Americans are some of the poorest people in the world because there's a large fraction with debt (e.g homes, credit cards, student loans). While technically true, that doesn't really match our intuitions for what wealth means.


Well then our intuition is wrong.

If your finances throughout your life are not in order, if you have high debt, regardless if it's because of medical bills, student loans or too big a car and house, you are in a weak position. What good does a nice car do if you worry about bills and if you try to avoid to look at the balance in your banking app?

You don't always know how rich some folks are, but for the most part it's easy to see if someone is living above their means, if you get a little anxienty on those people's behalf, then good!


Well, thought experiment:

John lives in extreme poverty. He's debt free, but is unable to adequately feed himself or his family. Several of his children have died from malnutrition.

Marc lives in a nice suburban home, has 3 square meals a day, so does everyone in his family. However, his debts (including his mortgage, car payments, student loans) exceed his savings.

If our intuition is wrong, then John is winning. He's ahead of Marc financially.

But I can tell you which one of them I'd rather be. It's not John.


They’re both screwed. I’d rather have crippling debt than children dying from malnutrition, but obviously both Marc and John are completely screwed in different ways. They’re both losers in this scenario, there are no winners.


Both you and the poster you're replying to are comparing debt to savings rather than debt to income. Taking the numbers from a downstream reply, the guy with the $120K mortgage on the $150K house is ahead if he can comfortably afford the monthly payment on his mortgage with the $80K annual salary.

The entire point of taking out a loan is that you don't have the assets available to outright buy the thing you're taking out the loan for. Obviously, people can take on too much debt, be trapped by usurious interest rates, and so on; you need to be realistic about how much debt you can afford, and a lot of people aren't (often through no fault of their own). But "my total debt at this moment in time exceeds my savings" is not in and of itself a harbinger of financial doom.


Yes, net worth and cash flow are two very importantly different things.

Negative net worth just means you can declare bankruptcy when necessary. Positive cash flow is what keeps you out. The risk is that an interruption to that cash flow can mean that you have to take the bankruptcy option.


It might be more a matter of accounting.

If you imagine that we are all born in a kind of "debt" where we need a home to live in, then a mortgage is just putting that debt on paper.


If you want to imagine we are all born with a 'debt' then you should also assume we are born with an 'asset'. They should be workign to put that on paper faster than the debt.

As a personal choice, I don't accept any excuse for taking on debt to fund a lifestyle. It is just not a good idea.

I've talked to people who come up with these crazy justifications in their 20s why spending money now is more important than spending money later; I don't know why it is so hard to accept that these decisions have a 20 year time horizons and that they are going to live to be 75. The averages are pretty clear, if you prioritise financial security above incidental expenses you can have both.

Expensive experiences are not worth more than financial security, they don't meaningfully contribute to people's lives or happiness. You can be just as happy playing sports with locals to meet new people as traveling to exotic locations to gawp at nice architecture and meet new people. In 10 years you won't notice if you cooked your own food or had someone else do it for you. An expensive car will not bring a normal person good luck. You can live in a couple of different houses over a lifetime and save much money with little downside.

The pleasure of a purchase is not an urgent need.


"If you want to imagine we are all born with a 'debt' then you should also assume we are born with an 'asset'. They should be workign to put that on paper faster than the debt."

If you take your salary and divide it by a reasonable interest rate, then you get the value of yourself as an asset, or the equivalent amount of capital you would need not to work. It is a large amount if you choose a realistic interest rate.

So, sure, a few hundred thousand in debt for school or a house is not such a big deal when you consider that an ordinary salary is equivalent to a million or two in capital.

The issue is cash flow, which seems to be what you are acknowledging, so how do you get to a fanatical anti-debt stance?


Maybe I didn't emphasis it enough; the key part is on the second line where I said "taking on debt to fund a lifestyle".

I spun a off topic; nickelcitymario's original scenario riled me up. It compared someone with a steady income to someone without an income and concluded that the person with an income had a financial edge because they had debts - that isn't right, the person with the income is ahead because they have an income.

A mortgage, car payments and student loans are luxuries that are not required to make an income; and the people I know with those things tend not to be using them to make money but rather to fund a lifestyle (for reference, I think the wealthiest set of friends I have are not university educated, buy second hand cars and rent - very relaxed lifestyle).

It is a common trope that people misjudge debt, take on too much, turn themselves into debt slaves and then suffer. They misjudge the situation and charge in when they are young and haven't really had time to learn about what makes a person happy. It is annoying that people keep downplaying the costs and risks of debt - it is an expensive, usually long term commitment and it results in ordinary people having less wealth. Wealth is hugely beneficial in strategic and tactical terms.


Didn’t notice this conversation take off.

Just to be clear, I wasn’t saying Marc was better off because of debt. I was saying he was better off despite having debt. I was responding to the specific idea that Americans are poorer than people in other countries because they have more debt. My point was it’s entirely possible (and common) to be better off despite having a negative net worth.

Others spoke to this better than me, though, when discussing cash flow and the like...


In what way is Marc screwed? In the scenario given, even though Marc's debts exceed his current savings, there's every reason to believe his future income will outpace his debts and that he'll be able to maintain his standard of living until he dies.


> ...he'll be able to maintain his standard of living until he dies.

Under the assumption that his wages track with inflation, you might be right. He'll be able to scrape and hustle and pivot right until the day he dies. That's not a "win." When his health inevitably falters, he'll have increasing difficulty finding work, accumulating ever more medical debt. Chances are, his children will be dependent on him well into middle age, but "his" house and assets will vanish to cover debts.

A good outcome is one where we're making enough to save up for a comfortable retirement. That's not the reality for, perhaps, most people born after 1980


In that scenario, Marc has far more options and freedom to escape his instantaneous debt state than John does.


You have to keep in mind the the expected value of lifetime earnings of both. College students from top schools going into consulting/finance aren’t poor coming out of college, even though they may be deep in debt, because the expected value of their labor potential is in the multi-millions.

Not quite the same as having it in-hand, but it’s real unless conditions change drastically.


That doesn't seem even remotely true. Taking on large amounts of debt can be risky in many cases. But consider the following case:

- newly purchased $150k home with down-payment of $30k

- $80k savings / investments

- $20k car

- $80k/yr income

This person is not at risk, but they have a net worth of $[30k + 80k +20k - 150k] = $-20k


Your math is off. The home is an asset worth $150k plus a liability of $120k for the mortgage, for a net positive $30k. That puts your hypothetical person with a net worth of positive $130k, not negative $20k as you calculated.


When valuing a business, you typically look at the discounted future cash flows in addition to assets/debt. Basically, you factor in their profitability and calculate the current value of owning that stream of cash flow. People have cash flows as well. So even though people typically only count assets/debt, Marc effectively has a net worth substantially higher than -$20k if he’s saving more than he’s spending, which jives better with people’s intuition about Marc’s situation.


Debt is just other peoples' money. Being poor isn't just about what you own, it's about what you have access to that you don't own.


Well said.


Your said nothing about Marc's level of income and if he's able to service his debt easily, so we have no information to pass any judgement here.


John isn’t someone of sound mind living in the US.

Both cases are poor examples. Financial health has two components; assets and cash flow. John can be in a better situation if his cash flow is good and he is solvent, but will always be facing more risks if he lacks key assets like a home.


> What good does a nice car do if you worry about bills and if you try to avoid to look at the balance in your banking app?

You have a nice car you can drive around?

I mean, the purpose of money is to do things with it. The balance in your banking app is only relevant because you desire to put it to some purpose. If you stop desiring to put it to some purpose, you're equally equipped whether or not you have a positive balance, and if you already have put it to some purpose like a nice car, you've accomplished the actual goal you wanted and should stop getting distracted by the means. (You should, of course, continue to pay attention to the means if you have other, unfulfilled goals. And perhaps you should think about whether having a nice car is more of a priority than those goals. But the goals are not money in and of itself.)

If you've got debts from student loans or mortgages that are set up such that you can pay those debts slowly and in a way you can afford to pay, and in the meantime you've got money to spend, you are actually fine. A balance sheet that only looks at how much is in the bank and how much you're in debt and not at how much you can afford to hold that debt is not telling the full story.

(This is, incidentally, the same reason the national debt isn't a big concern: nobody is going to demand that we pay that debt right now. So going further into debt gives the ability to do more things with that money, i.e., it gives us the effect of having more money, even though on paper we now have less money.)


Yonatan Zunger's notion of "financial shock wealth" is the most novel and satisfying framing of this question I've seen in years.

...If $5,000 is something you could afford, ask yourself the same question again with $100,000 (fire burn down your house?), with $250,000 (cancer treatment and your health insurance kicked you off?). For everyone, there’s some number which is the largest size of a financial shock they could weather.

This number is probably the truest measure of a person’s real wealth: What is the largest unexpected financial shock you could sustain without the cost of that to you suddenly becoming ten times the original cost or more? That number isn’t something easy to calculate; it depends on whether you have a family that can help you out, on your income, on whether that shock involves losing your job (and thus your health insurance, if you live in the US), on whether you have access to any other sources of security (including public assistance)....

https://shift.newco.co/2017/12/04/your-financial-shock-wealt...


[flagged]


And there is the failure of so much modern thinking, laid out in black and white: your financial picture is your measure of success.

God I hate greed and the profit motive more than anything else in this whole wacky place.

I would love to die in average suburban comfort if it meant the billions I'd made had all gone to deserving causes and not to any flagrant lifestyle of my own.


I don't see how your desire is incompatible with the comment above it. You can give all your money to deserving causes. By the definition of the previous post, you have then succeeded in life, because you have no money left. If you don't give money to deserving causes and happen to have some left, you have been cheated by life. It's pretty similar to what you say (except it gives you more options on what you want to spend on).


Greed and the profit motive are proxies for resources not being infinite and so we have to make hard choices about who gets what.

What doesn't get managed (observe->think->act if needed) gets squandered; and if we squander resources at the societal level that would just be stupid. We don't have the abundance of the modern era because luck is on our side, we have it because our management practices have grown unbelievably efficient over the centuries. Economic forces are the most effective way of triggering the management cycle; and because of that are necessary.

The need to focus on the material (which manifests as greed and profit seeking) is an ugly fact of life in the same way that needing to eat regularly is an ugly fact of life. It'd be better if we could get rid of both, but there are practical considerations to bow to.


You forgot how we (as a society) have been consuming fossil fuel resources (in particular) way above a sustainable rate. Millions of years of accumulated resources gone in tens of years. Possibly 'efficient' in the short term, but most likely problematic in the longer term - even without accounting for climate change.


That assumes that in some way effort ends up being related to your bank balance.


It’s at least somewhat related, all else being equal...


> all else being equal

Let's be honest though - it never is.


If you died rich and have a family to leave the wealth to and the state isn't set up to steal your wealth by taxing you a second time, you've won at life. A big part of life is spreading your genes and making sure that your offspring are well set up to continue spreading your genes. This either requires heirs and wealth at death or at least making sure you transfer wealth to your heirs before you die.


> A big part of life is spreading your genes and making sure that your offspring are well set up to continue spreading your genes.

According to some. Or, you can opt out of this and enjoy your life anyway.

It's troubling to see so many people in this thread concerned with "winning" at life. In the end we all die, then it's game over. Any high score is quickly forgotten.

Life is brief, treasure it while you still draw breath.


The main drive/purpose of life is to continue and spread itself, that’s just fundamental biology. You’re free to opt out of that and define your own goals (it sounds like enjoying yourself is your goal), but without another generation to pass it on to, everything that every human has ever done will have been pointless, because the purpose of most of what we do is to help humans. And what we collectively leave them with is the “score” that will be remembered for as long as there are people to remember it. But sure, your individual score is unlikely to be remembered for very long, except by your direct descendants.


> it sounds like enjoying yourself is your goal

It is one goal of many; there's no reason to limit yourself to a singular goal. I don't claim that my goals have any special meaning though, they are simply how I am driven to act in the world. Each of us is driven in different ways, and although we tend to wrap our drives in elaborate disguises and claim "free will", at the end of the day we are simply elegant (though somewhat squishy) machines.

> without another generation to pass it on to, everything that every human has ever done will have been pointless

Yes, that's exactly it. The very notion that anything has to have a "point" or "meaning" is something that humans dreamed up. It's an unfortunate side effect of our sense-making systems that help us understand the world.


I didn't mean that derisively, btw. I think it's perfectly fine to want to focus on other things besides raising children. We don't need more people being raised by parents who don't want to raise them.

I do think we can modify our drives, though, and that free will isn't quite as much of an illusion as you say. Visualization is pretty powerful.

But you're right that there's not necessarily a real point. If it's a complete fiction, though, I think it's a useful one.


> I do think we can modify our drives, though, and that free will isn't quite as much of an illusion as you say. Visualization is pretty powerful.

I agree that our drives can be modified, but who is modifying them, and based on what drives? And where does the drive to modify ourselves come from? It's turtles all the way down.

To quote Hofstadter: "In the end, we self-perceiving, self-inventing, locked-in mirages are little miracles of self-reference."


Heh fair enough.


As long as enough people reproduce around the world, there is another generation to pass it on to. Someday in the future, there may be a time where not enough children are born. Right now though, the global population is still growing and we're in more danger of overpopulation than underpopulation.

If I base my thinking on actual numbers rather than the theoretical principle, and in addition I stop worrying about my "score", then I can just focus on the actual stated goal, helping humans. When I'm dead, I'm gone. Them remembering me doesn't do shit for my soulless remains.

I might as well do something good for people because I care about people doing well, not because I want people to care about me even after I'm gone.


So having offspring is basically the primary goal of our species?


I'd say the primary purpose of the species is to continue the species. It's not everyone's individual drive, some people not having offspring so that they can focus on other things probably helps the group.


Surely that is secondary to coming up with bad puns.


> Or, you can opt out of this and enjoy your life anyway.

The only reason the "enjoy your life" option is even on the table is because someone selflessly did the work of wealth building and society building that makes it possible for us to have the option of a life of leisure today.

When you die, it's not game over. If that were the case, you wouldn't even exist because it was once game over for all your ancestors, yet here you are enjoying your life.

Culturally, it's a tragedy that we've done an awful job communicating the importance of leaving a legacy for your offspring that enables them to enjoy life like we have. This long chain of people enjoying life only works if we propagate this message.


I’d be interested in hearing you expand on that. Why do you personally identify with your genes, which will be diluted to nothingness in just a few generations? To my mind it seem a bizarre and borderline pathological worldview- something rooted less in actual biology than in an invented teleology.


Taxing a second time? Like what, a sales tax when I make a purchase on my already taxed income?


We see wealth as living in a big house. Not the net value of that house on a balance sheet.

Reality is unimportant. Is perception that matters to society.


That study is super flawed. Its conclusion is directionally correct, but aggregating negative wealth just doesn't make sense in this context, so the numbers "8" and "half" are meaningless except insofar as you interpret them only with the precision "few" and "lots".


So those pensions - representing a large chunk of everyone's lifetime earnings - are in the same order of magnitude as what the "1%" invest? That's pretty much how the "1-percenters" are defined: "this tiny number of people own as much as everyone else combined". If these pensions are used to create harm to the general populace, how does this not aggravate the whole situation?

Do you really think politicians have not focussed on the insane economic and social developments because they somehow failed to obtain those "real numbers"? Oops, we had no idea that people are crushed by student loans and lack of retirement arrangements?


> This doesn't get mentioned often enough when talking about the "1-percenters" and the wealth gap in Western countries, i.e. that most of the capital behind all of the current economic and social system is directly or indirectly held by part of the general populace itself.

I think the keyword there is indirectly. It's still easy to blame the 1-percenters for the proportional lion's share of the blame when the majority of the general populace's influence/control over their investments is intentionally gatekeeped and/or obfuscated by "professional finance" people, many of whom are 1-percenters or wish-they-were.

In the case of legitimate pensions that is top-to-bottom controlled by finance people with almost zero control from the average pension.

In the case of the modern faux-pension, the 401k, while most individuals could take direct control of how they invest those funds, and that's supposedly a feature, very few actually do/will, because the game is rigged (401k providers have a lot of vested interests in promoting their investment products where they make the most fees) and also a full time job that the 401k "owner" doesn't need on top of their existing job that pays into the 401k in the first place (again, giving the 401k providers the benefit of defaulting people their investment products with the most fees).

Even further, the push to "personal responsibility" to the individual in a 401k system also removes a lot of power of the general populace to collectively bargain as investment holders. Under the regime of traditional pension systems a lot of hedge funds were checked by pension managers when employee/pensioner interest was kept in mind (especially in the cases where pensions were managed by Unions rather than employers or outsourced to professional finance firms; there's a good history of hedge funds versus Unions on the books some of which used to stop leverage buyouts).

> And the real numbers tell the story of a society divided in two, a part that will manage to enjoy its pension and the other part that has no clue how will pay for its old age.

Even when federally mandated pensions existed there was always an interesting line between pension-earning work and the rest. It's not an entirely new worry, it's just continuing to get a lot worse.

Even worse is how much the breakdown of the earned pension system to the "privatized" 401k system is creating a weird muddy ground in between the extremes of people that sort of have retirement investments, but no longer have collective bargaining power, often have more middlemen eating their share of the pie, and everything is much more of a gamble.


> the 401k...is also a full time job that the 401k "owner" doesn't need on top of their existing job that pays into the 401k in the first place

Really? I can't imagine how to spend 20 hours per year on 401(k) related topics, let alone 40 hours per week on it. If you're under 40, buy a broad-based stock fund and forget about it. (Probably true if you're under 50.) Use the 40K hours you save by not having this extra "full time job" however you like.


> buy a broad-based stock fund and forget about it

The stock fund is a product designed by a third-party to make money for them, which was the poster's point about you not being in control of your pension in that case.


In my 401K, I have access to FXAIX (broad-based, S&P 500 fund), for which I pay 1.5 bpp of fees (0.00015 of AUM). If I had a million dollars in my 401(k)'s FXAIX (I don't of course), that would come to $150 in fund fees annually.

If I wanted exposure to a broader index of mid-cap stocks, I have FSMAX (Fidelity Extended Market Index), at 4.5bpp (0.00045 of AUM). $1MM in that fund would cost me $450 annually.

As I get closer to retirement, Vanguard's Total Bond Market (VBTLX) is available at 5bpp (0.0005 or $500/year for the notional 401K millionaire).

It's true that mutual funds pay the managers of those funds, but you don't have to pick the 50 or 100 bpp funds. On average, it's unlikely that population of 401K investors will outperform the population of professional money managers before fees. Not that many people have a 7 figure 401K account. Not all 401Ks allow individual share investments.

There's a pretty limited upside to spending even 100 additional hours on 401K investing in an attempt to beat the pros out of their $150-500 in fees.


But circling back to the point from above in the conversation: a broad index fund is still delegating moral authority to the index. How do you lodge a complaint with any company in that index? Do you have any power to voice an opinion against a leveraged buyout? You are not a shareholder of that company, you are a shareholder in an index fund that holds that company. You've delegated whatever possible votes you may have to Fidelity or Vanguard. Do they really have your moral and ethical priorities at heart? Can they?


There are good 401ks and bad 401ks. Many of them offer Vanguard funds, which have almost non-existent fees. And you’re doing it completely wrong if it’s as much work as you’re describing.

Pensions are often formed with unsustainably optimistic assumptions, and many of them will be insolvent at some point in the future. The temptation to mortgage the future for the benefit of the present is too tempting for people. Pensions do have a very nice set of attributes, but guaranteed benefits are hard to guarantee without being extremely conservative, which people have a hard time with.


It's a full time job if you want moral/ethical responsibility and/or voting power, for instance to voice an opinion on something like leveraged buy out. Index funds are great, but you are delegating all moral/ethical responsibility and voting power to Vanguard (or Fidelity or whoever else runs the fund).


w/r/t "almost no politician has focused on this contradiction," I've heard Andrew Yang talk about it tangentially through the (probably a/b tested) talking point of "job loss to automation."

Then when I looked more, I realized, he _wrote explicit policy on his website_. :O

https://www.yang2020.com/what-is-ubi/ , hop into the question that's: > Why does Andrew Yang want to implement Universal Basic Income (UBI) in America?

This might be a stretch. It's where my mind went, and I think it's interesting, so I hope this comment is in good taste!


You have to squint pretty hard to call Andrew Yang a politician and not a person on a vanity/activism project.


>most of the capital behind all of the current economic and social system is directly or indirectly held by part of the general populace itself.

As the system is designed, it doesn't matter so much who's money it is, it's who controls it and collects fees from steering it.


> a part that will manage to enjoy its pension and the other part that has no clue how will pay for its old age.

Quoth Bladerunner: Every civilization was built off the back of a disposable workforce


Having been gainfully employed in corporate IT since I was 19 - and doing max contribution to my 401k every year since - I'm not "in touch" with the predicament of today's kids. Are they alright? Record employment numbers today. Wage growth up. We still have a talent shortage. Being (now) a business owner, my biggest complaint on the talent front isn't a lack of education in candidates, it's a lack of customer focus and inner curiosity (to be aggressively learning in one's spare time and on the job).


Right, you maxed your 401k, your IRA, your HSA, and all it took was a little financial prudence, diligence, and a job paying 60k or more straight out of high school. Anybody could do it.


This sounds like straight-up textbook Just-World[1] logic to me. You appear to be completely discounting structural and systemic forces against economic mobility for certain members of society.

1. https://en.wikipedia.org/wiki/Just-world_hypothesis


many want the trappings of success out of the gate and keep ignoring many of their bosses and superiors at work have a lot of time invested and earnings already. they also confuse what they seen TV for real life.

tell, who doesn't have people in the lower rungs of their IT group with more expensive cars or outfits than you would feel comfortable with at twice their salary? then top off the people who eat out every day who are usually part of the "only contribute to the 401k to the match" crowd.

yes there are people struggling but many who are gainfully employed struggle too because they have no discipline and worse some don't want help.

the education system needs to concentrate more of teaching children to take time in acquiring things and first get a safe financial base to work from. politicians needs to stop pandering to people's jealously and blaming it all on the rich, here's a clue the real one percent outside the odd billionaire are the politicians who write the rules and sell favors through their law making work (tax code, occupational regulations, and property zoning)


I tell this to my college age kids. One of them is off touring Europe right now. I asked her how she is paying for it (and pointed out that I've never been to Europe because I can't afford it). She says she is going into debt to do it, but it is okay because experiences are more important than money. She is studying anthropology and non-profit management. I've pointed out that there aren't very well paying jobs with those kind of degrees. She dismisses this and says she isn't in it for the money. How many other Gen-Z kids are also in it for the experiences and not the money? Judging by her and her friend group, she's not the only one. I tried teaching her financial prudence, but social media exerts more of an influence on her thinking than all my example and talk every could.


Oh man. If money isn't important then why borrow it? There's a disconnect there -- one that, I might add, I suffered from to some degree at that age. What everybody tried to tell me, and what I would say to your kid if there were a chance in hell she would ever read this, is, "Money isn't everything" only when you have enough. Although her net worth is now negative so in a way she's poorer than someone who has nothing. And she'll soon get to experience what paying that off feels like. Money might not feel important, but it's important to the people who are gonna be demanding payment.

But that's not really even it. Spending tons of money (especially money you don't have, which always costs more) is not what you do if you care more about experience than money. Someone who values experience over money spends time learning different ways of cooking beans & vegetables - delicious, nutritious. She gets a bike, learns to maintain it, and rides it everywhere, including to the farmer's market. After some advanced practice maybe she even learns to make her own clothes. These are all fulfilling and empowering experiences that deprioritize the spending of money. It even feels a little bit rebellious, because you don't have to earn tons of money, and can be somewhat less dependent on a consumerist lifestyle and all the hidden burdens that go with that. Like credit card debt servitude for instance.

That's what "money is less important" looks like. Whereas if the "experiences" you like are flying to Europe and shit, you like money. You're a Davos-ass mothafucka, with a Sasquatch carbon footprint, to boot. Life isn't Instagram. Glory lies in all directions and experience comes no matter what. Everything is an experience and most of the good ones are free. Don't fall for advice from your ignorant-ass peers, or from influencer/manipulators, or from lazy shallow journalists who want to characterize your whole generation in one wildly-inaccurate sentence!


Your daughter is more financially prudent than you think: she realized that, no matter how much of her young life she lived on ramen, she will never have much in her name as most of her income will be wasted away on rents, transportation and food. So she decides to f..k it and at least have fun. Better die poor and having lived a fruitful life than die poor and having lived on ramen the entire time.

With many of my generation spending upwards of 50%, sometimes even 70% or more, only on housing, how on earth are we expected to build savings? With six figure student loans that aren't dischargeable in bankruptcy and medical bills at similar conditions? We will be the explosion that finally shows how fucked up pension systems and wealth allocation have become, and this bubble will explode in about 40-50 years, if not earlier.

Add climate change to the mix which our politicians won't do anything for the coming 10, 20 years and which will inevitably and unpreventably explode at the same time... yes, definitely, I rather have a life now, I won't be able to make it to retirement anyway, no matter what I do.


Meh, there is a difference between not having much to your name and having a fat debt collector sitting on your neck.

"sure, there is no way you can walk over that pile of broken glass without cutting your feet, so fuck it, lets get naked and roll around in it, at least you'll feel the breeze gently waving your nether parts for the first half of the process"


She's one medical emergency or expensive treatment (cancer) away from bankruptcy anyway, which can wipe out her savings in an instant. No matter what, there will always be debt collectors looming over her head.


I never understood this line of reasoning -- sure you are one big disaster away from bankruptcy, why not pile on and be _also_ at risk of moderate mishaps sending you into bankruptcy spiral.

A meteor can kill me in the next five minutes, why would I ever bother going to the gym? In fact, w


Insurance is a thing... you do have to build up enough savings to survive while not working, but that’s doable if you don’t blow everything on traveling and other luxuries.


I doubt this. Even as a German I regularly get healthcare gofundme's in my twitter feed. HN frontpage regularly has horror stories about billing, including "out of network" hospitals in emergencies.

There is no way one can build up savings to shoulder such shit, much less are savings to be used for medical issues!


As an American currently working with healthcare data, I’m familiar with the abundant failings of the US healthcare system. But I think it’s a mistake to think that it’s completely unavoidable and take a fatalistic attitude and feel like you always have a sword hanging over your head. As far as I can tell, it’s avoidable, but you need to get decent insurance before you’re sick, and to save up money to help you ride out times when you’re not making money (as well as pay the deductible/out of pocket portion). This is definitely expensive, and if you make no money, it can be difficult (though you'd then likely qualify for Medicaid). But many Americans do make quite a lot, and spend everything they make (and more) during the good times, even if they pull in >$100k/yr. Consumerism has a much stronger hold here than it does in Europe.

EDIT: A bit more, since I didn't really address your comment about out of network charges.

In the event that you get balance billed for some surprise out of network charge despite going to an in-network facility, you likely don't have to pay it, even though they're invoicing you. Contacting your insurer about it will likely take care of it. And if it turns out that you do need to pay it, hospitals are generally willing to accept $0.10-0.20 on the dollar for self-payers who can't pay, before they send it to collections. You don't have to pay the retail price, which is totally made up and has very little relation to what they'd accept. This is largely due to their adversarial relationship with the insurance companies, which force them to accept the lesser of their retail price and their contracted rate. Think of the high prices as the starting point in their negotiations.

I fully agree that the US healthcare system is very messed up, and that what I'm saying sounds insane and unnecessary. I wish we had a single-payer system in the US (with optional private insurance on the side). Fortunately, it seems like people are getting sick of this, and we're getting closer to getting that. I just wouldn't take the attitude that the world is totally fucked, so you should live for today.


> Fortunately, it seems like people are getting sick of this, and we're getting closer to getting that. I just wouldn't take the attitude that the world is totally fucked, so you should live for today.

That depends if the US gets another four years of Trump, or a repeat of the final Obama years with a sane President blocked by a Republican-dominated congress.

I would not be so certain that the outcome of the 2020 election is a Democrat president, a Democrat controlled House and a Democrat controlled Senate - and even if all three end up in Democrat hands (which I hope for!) those in power should rather not be bought off by the insurance industry.

To make it worse, even if all stars align and all of this happens, there still remains the problem of exploding rents preventing anyone who rents (=99% of the young population) to make meaningful savings or retirement contributions, and to top that one off student loans also are in dire need of reform and hell will freeze over before the US will even consider the German model of tax-funded world class universities.


You want to have the time of your life when you're young and healthy to enjoy it! All the money in the world can't turn back the clock. Of course there is an in-between way: delay that trip for a year and save money for it. But that's HARD.


How is she planning on living afterwards with debt and no earnings potential? If it’s to rely on you, you might want to disabuse her of that notion so that she starts taking life a bit more seriously.


Nah, we tell them from the time they are young that we will help them with the first year of college and after that they are on their own. They know that we are serious so none of them have ever asked for help after the first year of college.


[flagged]


>unlikely you'll ever collect from that 401k friend!

Like WillPostForFood, I'm baffled about where you're even getting this idea.

The 401k is their money. Right now they could withdraw all the money. If their employer goes bankrupt, the 401k balance didn't change at all. The only part that could potentially go away would be unvested company contributions (I'm not sure on this - it's all I can think of though).

If we were talking about a pension, Social Security, or a 457b deferred compensation plan - I get it. There's uncertainty. Pensions get underfunded routinely, private equity shenanigans occur etc. Social Security will likely see big changes in the next 40 years. In the case of the 457b plans, it's not your money until you leave the employer and start withdrawing money.

Please clarify your statement if you have something productive to add.


I think he's inferring to the government being able to get to it in the future. Whether it be by future legislation of extended early withdrawal penalties, or new tax laws. Yes, it is your money but is still subject to federal and state laws. It's different than a bank account.


Not really that much different with respect to their exposure to future laws; your bank account balance is subject to federal and state laws as well. Yes, future laws could affect your 401(k) balance, but the same holds true for your bank account balance (e.g., wealth taxes, etc..).

But what else can you do, really? Best to put your savings into the most cost effective / tax efficient vehicle that is currently available.


It is a huge disservice to take a cheap shot at 401ks. There is almost no case where someone who has the opportunity to contribute shouldn't do so.


There's plenty of companies that do not provide financial match to a 401k. For people making average income for a 25 year old or so, they are better off putting it in a Roth IRA then.


Invest in a Roth IRA first is good advice. However there are limits, you really should max out both in your early years. While you are at it you should max out your HSA (pay medical expenses in cash)

Of course as others have pointed you are now investing $30,000 before you have paid for any other life expense.


Eh, after fees most standard 401Ks are only marginally better than a bank account at this point.


I doubt 1%+ expense ratio funds across the board is the average case, but I could be wrong. Perhaps if you let your 401k provider manage your money.

In my 401k, I pay 1.5 bps/yr on 80% of my portfolio, a Fidelity S&P 500 fund (FXAIX), or $0.15 per $1,000 per year.

My other two funds are a Fidelity Small-Cap and Fidelity Mid-Cap funds (FSSNX and FSMDX), I pay 2.5 bps/yr on the other 20% between these two funds, or $0.25 per $1,000 per year.

If my balance was $100,000 right now, I would pay 80x0.15+20x0.25, or about $17/year for each $100k. $170 per million, and so on.

These 401k mutual funds have better expense ratios than my Roth IRA holding, VTI (Total Market ETF), which is at 3 bps/yr, and the mutual fund couterpart of VTI, VTSAX is 4 bps.

There is absolutely no possible way for a high-yield savings acct that yields (Fed Funds rate minus 15-25 bps) in interest (Goldman's marcus.com pays 2.23% APY, for instance, fed funds is ~2.40%) will ever approach my portfolio after 40 years of returns, barring total societal collapse.


Due to compound returns, a marginal advantage makes a huge difference over a 40 year career.


You'd hope, but a number of smaller plans have that entire advantage eaten, so you end up with no growth. Getting out of a lot of 401K plans and into something like an IRA is... advisable in many cases.

I'll admit that this is mostly a problem for small businesses, from what I read, and there are plenty of 401k's that aren't actively screwing people.


This is not true at all.

It is very easy to get some sort of vanguard s&p 500 index fund that will get you %7 return rates, with something like .1% fees.


A 401k wont be invested 100% in cash


I’ve been shocked to the extent politicians haven’t focused on the lost tax revenue from the gig economy.

I’m certain it’s caused a drop in tax revenue from what would normally constitute middle class tax payers.


What lost tax revenue do you mean? Self-employed/temp/gig workers still pay the same taxes as full time employees.


Not necessarily. https://turbotax.intuit.com/tax-tips/self-employment-taxes/t...

See 20% deduction on self employment income.


That's a good point, and it may net out to be an advantage for a gig employee. But is is a complicated calculation. Throw in the higher payroll tax rate for gig employees, and tax deductible healthcare expenditures by companies on employees and it is unclear there is any advantage in overall taxes paid.


Gig independent contractors pay the same payroll tax as employee/employer pairs.


Same rates, lower overall income, and in some places lower social security contributions.


They're also responsible for paying for their expenses, and i'll bet they're not as good at getting writeoffs as the in-house CPA.

So you might actually see increased revenues as a result.

Decent question though.


Their low wages due to capital capturing profits instead of labor makes for decreased tax revenue


Does anyone actually make money off the gig economy? I thought it was one of those "Robbing Peter to pay Paul" sort of deals.


Cynically, Dems want to tax the rich, and GOP wants to "starve the beast".


Politicians are not shocked by anything except when they lose in elections...

Edit: In fact, what they say/act that they are shocked about is often a projection they put up to make sure they get reelected.


Oh c’mon... This is just empty, nihilistic cynicism. It actually contributes to the problem, because people just stop trying when, completely independent of their actions, they are continually derided as stupid/corrupt/egotistic/lying/etc.


I think your point ignores that there's a mandatory federal pension system w/ a minimum benefit that people who don't save in private pension plans or who may only have temp jobs do contribute to, and will draw from in old age. It's true that it's not fully funded, sure, but if it didn't exist it would be the obvious policy solution to the problem you're describing.


There's a certain amount of poetic justice here for Remington, seeing as how they acquired Marlin and then fired all their expertise, completely ruining the brand. Good riddance.


Agreed. This isn't a unique tale for a firearms manufacturer. This is a common tale for nearly any type of manufacturer that is bought out by private equity firms. They reduce costs and quality, load it with debt, suck it dry, and then dump it on their creditors.


I’ve read about this scenario many times, but I’m curious about why any creditor would lend money to a company that’s poised to do this.

Wouldn’t these private equity firms lose the ability to borrow money based on past practices like this?


Read the toys r us threads here on Hacker News from a year ago to understand.

The cult of modern business thinking blinds folks in business from the obvious stupidity of the private equity business model. Self dealing almost never ends well.


Bain Capital and others who do LBOs don't have a 100% failure rate. It's just that the failures are reported and the successes (Lenovo) are not celebrated.


I would add TPG and OnSemi to the success column. It was painful working there when TPG was keeping things lean for a sale, but they did eventually invest in the business an OnSemi was much better for it.


Lenders lend money because it's not always a failure. Lenovo is a great example of a successful PE strategy.


HN (and the world in general, I guess) has a tendency to focus on the successful VC outcomes and the PE failures.


If the article is to be believed:

> When these so-called “leveraged buyouts” worked, investors made a hundred or a thousand times their money.

then it only needs to work a small percentage of times they try it to remain highly profitable.


Partly, it sometimes works. Partly, the people who own the private equity firms also sit on bank boards.

Because you know, we stripped out most of those laws.


Buyers searching for yield. Take a look at the current state of covenant light loan and leveraged loan markets. They assumption should be based on the winners paying for the losers, just like in VC, but it isn’t clear that the yields are high enough now to make up for it.

Consider the alternative for where people can park their money - sovereign debt paying effectively zero paid for in an inflationary currency.

There is logic here. It isn’t great, but it’s there.


the pe firm never borrows, the company they own does the borrowing to pay the pe firm for "services rendered"


Yes, but why does the creditor play along?


The people who make the deal happen get a commission, so there's a sales person selling the deal to the people selling the money.

Everyone is getting sold, so no one really knows the truth.


What do creditors willingly allow this to happen? When a private equity firm buys up a business, it makes sense for creditors to renegotiate their contracts to protect themselves.


I think you have your timelines wrong. Remington was already owned by Cerberus when they purchased Marlin (they were one of the "18 businesses rolled up"). It was the same people, running the same playbook, just Remington, being bigger, lasted longer before it had been fully sucked dry.


I especially liked this bit "The pension fund for the Boston-area public water utility invests in Cerberus. The California State Teachers’ Retirement System, CalSTRS, is a Cerberus client, as is a pension fund for the Presbyterian Church as well as many university endowments, sovereign wealth funds and philanthropic foundations." Made me chuckle a bit inside, as I know a couple people who are less on the side of guns, as they are more on the side of teaching, who would be dying inside knowing their retirement money is used like this.


American universities have rushed to move as much lecturing as possible to adjuncts, and cap as many employees as possible at 29 hours/week to avoid the ACA. Just like with a fire-and-brimstone televangelist, it's only immoral if other people do it.


> American universities have rushed to move as much lecturing as possible to adjuncts... it's only immoral if other people do it.

No, it's just plain immoral, not to mention short-sighted. American primary and secondary schools are also squeezing their teachers, by hiring Filipinos on J-1 visas, just like tech companies do with H-1Bs.

It's a bit like like making room in your fridge by pushing everything back, then adding new stuff. It works for awhile, but eventually leaves you with a mess of spoiled milk and rotten vegetables in the back. You can only strip-mine a hill for so long before it's gone.


CalPERS rejected a push by the state treasurer to divest from gun companies that make guns or gun parts that are illegal in California.

I don't think STRS has had the same push for divestment, but they're known for taking a more activist approach. IIRC CalSTRS actually has multiple employees whose entire job is to lobby gun companies to change their policies.

Of course that sort of political and shareholder pressure is what led Smith and Wesson to start putting integral locks in the frame of their revolvers. That decision has had an almost universally negative response from their actual customers— those in-frame locks have a tendency to get rattled around by recoil and freeze the gun in an unsafe state.


There are so many people that view investing like this. It's best to leave your morals and worldview to the side when investing, or letting others invest on your behalf.


If you're opposed to guns, isn't this a good thing? You make money and destroy 18 gun companies in the process.


Bankruptcy comes in different flavors, and rather than a Chapter 7 liquidation, it's a "pre-packaged" Chapter 11 reorganization, according to Wikipedia's introduction "Remington exited bankruptcy in May 2018, less than two months after filing for protection under Ch. 11 laws. Remington's quick exit from bankruptcy was due to a pre-approved restructuring plan that was supported by 97% of its creditors."

All part of the game that got them into this mess in the first place.


"Financial engineers" aren't interested in building a sustainable business; they want to play a game cleverly, make a cash-grab, jump ship, and leave thousands dealing with the fallout. It's a similar short-term strategy to that taken by many SV founders who build a company only to sell it, though obviously the latter don't cause nearly the same degree of harm to society. But they still pass on opportunities to create actual value and jobs, in favor of making a quick buck and moving on to the next exploit. It's the mindset of locusts.


Alternatively, someone started a business that they wanted to create and build. At the same time, this founder didn’t want to spend their entire career on this one company. So they build it up and sell it off to PE. After a while they have a new idea and start again.


I love the term financial engineers. In my head, it defines the person, the procedure, and the purpose.


The problem with engineers (speaking as one myself) is that we're prone to focusing only on the mechanism itself, abstracting away the details and ignoring the parts of the system we can ignore. In software we can often get away with this because the rest of the system is just further machinery; there are benefits to taking it into consideration, sure, but nobody gets hurt when you don't.

But business and finance are not software. Their systems are made of people. When you waste a CPU's time by ignoring its nuances, you simply get less out of it. When you shuffle money around, writing off the nuances of industry and economics as blips in a monetary machine, you destroy lives. I understand the appeal of the engineering mindset, but you have to be a psychopath to continue in it while leaving such destruction in your wake.


I know and I agree. And a software engineer is much different than a mechanical engineer or a civil engineer. I guess I should’ve mentioned that the term financial engineer gives me context or a reference point where I can see that they are behaving like engineers. My comment was more focused on their behavioral mechanisms.


I figured that was possibly what you meant; I was just elaborating.


Engineering typically builds something useful and long-standing, these financial engineers just tear things apart..


I'd prefer the term “capitalism hackers”.


Remington's product quality went way south soon after the acquisition and hasn't really recovered. When you have a very traditional market for your products (many firearms designs are decades old), those products are expensive, and potentially designed to save your life or at minimum contain tens of thousands of PSI inches from your face, losing your reputation for quality is a death sentence, and due to the capital costs, you're unlikely to be able to squeeze out cash by burning your reputation.


> A plunge in NIC checks foreshadows a corresponding plunge in gun sales

I'm curious about this statement. NIC checks are, as the name implies, instant. They happen upon transfer of ownership of a firearm from an FFL dealer. So I'm not sure how they 'foreshadow' sales, more likely they mirror sales. In fact, when you purchase a gun online, the sale occurs before the check...


NIC happens at retail. I suppose it would take time for retail sales volume changes to ripple back through the supply chain, so maybe manufacturers view it as a leading indicator.


I don't know for a fact, but I'm guessing it's because theres a lag in the supply chain. NIC checks may instantly reflect a drop in sales at individual stores, but it will be a bit before that drop works its way back up through the suppliers and distributors to Remington itself.


Also, with the number of CCH licenses, those don’t needs a NICS check.


That of course is state dependent - not all states carry permits get you out of the NICS check.


And in the other direction, fewer states are requiring a permit, so no doubt some people are not bothering to renew their permits.


This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.


It feels like the sales are hard to predict have something to do with guns in the US being ... almost borderline fashion items in terms of how people decide things.

Like there's a lot of discussion about usage and practicality among gun enthusiasts, but when they buy their 3rd or 6th gun ... I suspect the decisions are more about difficult to predict things and whims.

It is a strange market.


I'd describe it as less "borderline fashion" (which any hobby has) more as legal caprice.

Historical examples:

* The Firearm Owners Protection Act banned machineguns manufactured before 1986.

* The Federal Assault Weapons Ban banned certain semi-automatic weapons excluding those manufactured before 1994.

Firearm hobbyists need decade-plus forward thinking predictions. What's today legal is a felony tomorrow, unless steps are taken now.

This makes it a volatile guessing game, even more than other hazardous hobbies (cars, aircraft, martial arts, motorcycles, etc.).


I'm not sure I understand.

You see popular revolvers selling well... nobody is buying those based on the law.


Historically, politically-related events do in fact play a large role in gun sales.

There were lengthy and severe shortage of small arms and ammunition following both Obama's election and the Sandy Hook shooting, especially .22 caliber ammunition. [1]

I don't think .22 ammunition is on the chopping block, but there's a general positive feedback loop, like a bank rush.

[1] https://en.wikipedia.org/wiki/2008%E2%80%9313_United_States_...


.22 ammunition uses rimfire priming, which requires unique machinery which as I recall no US company dared to buy more of, as mentioned in the Wikipedia article you linked to. Existing US 3 billion rounds per year + foreign imports couldn't keep up with the demand, which also seems to have included a lot of new gun owners, buying .22 models like their main guns or conversion kits for cheaper practice.

Perhaps related to this scam, I don't remember any company other than Remington building out a major increase in capacity, that article mentions their $32 million plant expansion. Companies were reluctant since they didn't know when demand and supply would get back in sync, I would also wonder if smokeless powder capacity was a factor, there aren't very many companies that make it.


Yeah. Unpredictability in demand yields unpredictability in supply, and vice versa.


Revolvers are absolutely more popular in areas where ammunition capacity is restricted. 7 round .357 is a great option in areas where there is a 10 round max for magazines.

Places out east (NY, NJ) have extremely low limits for capacity, both in effect and proposed. When ammunition capacity is reduced, there is an incentive to go for a (typically) more reliable revolver. Many people would rather have say a 7-shot 357 S&W wheelgun vs a 9-round (maximum) semi-auto magazine.

I ankle-carried a .357 snub for most of my life, and it literally weighed less than the 5 rounds that it held.


> When ammunition capacity is reduced, there is an incentive to go for a (typically) more reliable revolver.

In case anyone isn't reading between the lines:

The chief advantage of a more complicated, less reliable, more expensive semi-auto handgun is its larger capacity in a smaller profile. A semi-auto packs rounds tightly together rather than having an effective chamber around each one.

But if you don't actually get more rounds, might as well opt for a revolver like the parent.


Not to mention as consumer products go they are incredibly long lived, I can’t think of many activities where someone might still use their grandfather’s [tennis racquet, golf clubs, etc], but you regularly see people still using 50-75 year old guns (if not older)


It doesn't help that a lot of the "fun shit" is restricted to those older guns, since they've been grandfathered in during the US's various prunings of gun rights. So a 50 year old gun might be legitimately superior to one manufactured this year, which causes all manner of weirdness.


What kind of "fun shit" are you thinking of? Select fire is rare and expensive. Open bolt semiautomatics? Eh, some people are into collecting such things, but closed bolts are just as fun to shoot. Just about the only somewhat reasonably priced grandfathered "fun shit" are pistols that can take stocks and not be NFA SBRs.


Select fire is rare and expensive for legislative, not practical, reasons. And it is VERY fun, if not particularly useful. It's a large part of what I was thinking of.

Why would the price matter?


If we're having a discussion about long-lived firearms having an effect on the market for new firearms, select fire is so rare (175,997 pre-86 transferrable as of February 2016[0]) as to be irrelevant.

[0] https://www.nfatca.org/pubs/MG_Count_FOIA_2016.pdf


Not uncommon for most businesses.

>You build something, people want it, pay money.

>Competition happens and you need to change or die

Don't change quick enough, you are dead. Big companies can't change quickly, but they can throw money at problems. Death of a company is inevitable.


I mean, yes, but that's true of any system with competition. At 1441 years old, Kongō Gumi has outlasted a great many things. They will eventually die, though.


There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.


The problem with the "gun" issue is that people who aren't in the culture get exposed to movies, crime reporting and crazy people and just don't have a perspective on many/most of the people who are into guns.

I grew up in NYC and moved to a country town when I was 10-11 years old. Guns were forbidden things that only cops and soldiers should have from our family's POV -- it was really awkward.

But the sporting, enthusiast and security drivers of demand for firearms is real and legitimate, and folks in that culture are equally confused about the point of view. My parent's neighbor had a bunch of guns -- probably like 20. Some were antique, he had shotguns for deer, trap/skeet, birds, rifles for hunting and target shooting and cheap ammo guns for plinking and practice. Shooting sports were family activities that were positive things. I was into baseball, my neighbor was into shooting and archery.

Unfortunately, the toxic politics around the issue encourage extreme positions and ultimate reduce real and nuanced issues into binary positions that encourage bad behavior. It doesn't help that extreme positions make money for different stakeholders.


> My pro-gun friends typically seem to have 2-3

From my experience, that's sort of low. I never thought my neighbors had so many guns, until I started spending time at the shooting range. A common site is a trunk packed to the gills with firearms. The "gun guys" buy them like the "sneaker guys" buy Nikes. They usually won't talk about it, unless you express interest or go shooting with them.


Can confirm, my father-in-law has more than 50.

It's actually a really neat collection, but I wince at how much it had to cost and how much use he actually gets out of them.


Some people collect coins. Or cars. Others collect guns.

You don't have to shoot a gun to appreciate it. My great grandfather's service revolver? It's a link to the past, not a range toy.


The average American gun owner has between 5 and 6 firearms. I just took the class.


Let's see, 3 for 3-gun matches, 1 more for PCC matches, 1 more for precision matches, a few extra if I don't compete in the same class for all of those, 1 the kids can shoot, 1 for my wife to carry, 1 for me to carry, bigger ones for the house and cabin, a few extras for the zombie apocalypse.

No, there's plenty of demand for guns. Remington's just lost their former reputation.


> Remington's just lost their former reputation

This is pretty much it. Sad, considering I own a fine bolt-action paper puncher from Remington in .223. But it's no more complex than what you pointed out.


Lol, you forgot to mention buying ones for family and friends, like Matt Carriker of offtheranch channel.

I agree free market (with certain safeguards) is usually the best path for a society to sustain itself and prosper.

But I feel private equity firms are definitely not good for a free market to sustain itself. And yet they and their lobbyists will insist free market is the best for our society, use that line to prevent any regulations over what they do.


I don't see the market not sustaining itself, though. As a consumer, if I'm not satisfied with Remington, I just buy a Mossberg instead of an 870, or a Bergara instead of a 700, or literally anything but an XD. There's a lesson to be learned that if you open your investment to the public or get in bed with a private equity firm, you may now be pressured or forced into short-term thinking that isn't aligned with your long-term vision. But I don't see this as a failure of the market. In a free market, losers lose.


Yep. The gun market is saturated right now. Literally everything that Remington makes is also made by half a dozen (or more) competing companies. If they make stupid decisions and build garbage, that's tough for them.

We don't have any pity for auto manufacturers who make garbage and lose badly. Why would anyone have pity for gun manufacturers who do the same?


This sounds reasonable but the article indicates sales were good and gross profits high but what killed the company was aptly-named Cerberus' extraction of assets. It's a story we've seen before at Toys 'R Us, Sears, and others. A modern day Heracles is needed to deal with this beast.


>How many guns does one need?

Need or want? Like any other hobby your limit is your budget.

There are guns that exist for no other reason than the lulz ("hundred dolla problem solva" I'm looking at you). Historically inclined individuals could spend a fortune just collecting variants of one specific niche of firearms from a particular nation and time period.


All the pro gun people I know, self included, have more than that. There are more guns than people in America, but not nearly everyone is a gun owner.


iirc the number of guns in America is almost exactly equal to the population but the distribution is skewed a lot. About 2/3rds of Americans don't own a gun. The ones who do on average own 3, with a lot of them having 1 and a few of them having dozens.


You're recalling a very old guess; an analysis since then https://web.archive.org/web/20190121202815/http://weaponsman... puts the number anywhere from 412 to 660 million.

The old estimates are bad, for example, 275 million new in to the market guns were counted by a system the BATFE introduced in 1999 for high volume manufacturers, importers and wholesalers, a total of 66 FFLs, that no academic had previously used in an estimate.


Adding onto this, guns also last more or less indefinitely under normal usage and a proper care regimen (which, granted, not everybody follows).


As a firearm enthusiast, the answer to "How many guys does one need?" is always "Just one more." <grin> It's a fun hobby that I can spend time with my kids.

They also make great investments as a quality firearm holds it worth and often increases in value.


Yeah, take any hobby or sport or whatever that involves "gear" of some sort, and you'll get some variation of the old saw:

"The correct number of $ITEM to own is n+1, where n is the number you own now."

$ITEM can be "mountain bikes", "guitars", "road bikes", "motorcycles", "guns" or pretty much anything.


Yeah, I think it's fair to say that stamp collectors have tend to have more than "necessary" number of postage stamps.


[flagged]


Your fear has not come to pass. From 1980 to 2016, the last year the CDC has statistics for accidental gun deaths, they went from 800 to 500. At the same time the population increased by roughly 50%, and the rate of gun ownership increased dramatically as, for example, shall issue or better concealed carry swept the nation and made gun ownership a lot more useful for most of the people in most of the states.


Firearms collectors don't generally collect the types of guns used in a majority of crimes, which are cheap handguns and carbines. They are usually collecting rifles and shotguns.

You'll find that the data overwhelmingly supports that cheap semi-automatic handguns are responsible for the majority of shootings out there, despite the media coverage of mass shootings often using an AR-15.


> Oh, sorry; I'm sure you're entirely careful and responsible, all the time, just like every other firearms buyer. So there's clearly no problem with having an ever-increasing number of them around.

Fully agree.


And the better chances that one will be used intentionally to protect a productive and decent member of society from a violent criminal.


That's certainly the fantasy.


It is undisputed that there are a great many legitimate "defensive gun uses" per year.

How many is of great dispute, getting into minutiae all the way down to survey question branching due to an unbridgeable cultural gap, but please don't deny even the lowest estimates of tens of thousands.


The numbers are on the side of gun owners and advocates. I'd be inclined to think that competing theories based on feelings would be more fantastical... even if the surveys are off by two orders of magnitude, the defensive uses outweigh mass shooting deaths.


You say fantasy, surveys say thing that happens hundreds of thousands of times per year in the US. I think I'll believe the surveys on this matter.


Clearly we need to elect another Democratic president to spur the market on.


But preferably after two particular members of a certain branch of government croak and a republican president gets to replace them. I like my snake unstepped. People who live in certain states that shall not be named deserve their snake unstepped too.


Repealing the NFA & the Hughes amendment to FOPA would be great.


Compare to social media games like Farmville - most people might spend money they personally consider excessive, but that balances out with some other forms of entertainment. Meanwhile I've heard they had people spending upwards of $10k PER MONTH. Enough so that it wasn't "that one weirdo".

So while the "average" owner might have 1-3 guns (in this case), and the average "fanatic" might have 5-10, you have enough obsessives to throw things off.

(Carefully does not look at bookshelf with literal hundreds of RPGs)


Carefully does not look at Steam/GOG libraries with hundreds of games


Carefully does not peek inside home shop to see tons of crap (aka - "vintage computers and robotics") purchased from hamfests...

/sigh


Ah, the "whale" model. Of course, what's to seperate a whale from an investor looking to goose the numbers to get his % higher?


> How many guns does one need?

I saw several estimates that agree on average somewhere between 8 and 10.

A couple of bolt action rifles for hunting, rimfire for plinking with kids, a pump-action shotgun stashed somewhere for home defense, a pistol to carry concealed, another pistol as backup, grandpa's revolver that is now a decoration, and three old rifles in various state of decay at the back of the safe that everyone forgot about - those are all very typical.


As will be clear in a moment, I'm hardly anti-gun but certainly not "pro-gun", and I count five in the gun safe. Shotgun, rifle, and a couple of handguns adds up quickly. Why so many for a "not pro-gun" guy? Shotgun/rifle/handgun fill different categories, and we have several handguns because I like Glocks, the Colt 1991 custom is purdy, and she likes her .357 short barrel.


I'm a relatively new gun owner. I have 2 firearms, and by design I won't have any more for a very long time. I would have just the rifle, but it's often awkward or impossible to take classes and compete without a pistol. My entire system runs on the same caliber, and all of the magazines are interchangeable.

It used to be that almost every American household had someone who was a competent shooter, an good cook, a competent musician, a decent craftsperson or repair person of some kind. Times have changed.

From what I have seen, only having 1 gun is more common in the African American community and in some parts of rural America.


In poor neighborhoods communal guns are quite popular. They are stashed at locations that several people know about and have access to.


Need is just flat out the wrong word in the context of hobbies, it's like asking how many stamps or cars a collector needs. In the context of collecting, 2-3 guns is _crazy_ low.


Ask more pro-gun friends. It kind of becomes an addiction. Everyone I know has a 30 gun safe that's damn near full.


Yeah, but a full 30 gun safe only has about 10 guns in it.


Did you ask how many they had and get the answer, "oh, a few"?


Oh no, I asked to see them.


There is an intriguing trend in the United States where, for the past several decades, the number of gun owners has gone down but the number of guns has gone up.


That claim is solely based on survey data, and there has been a undeniable trend towards false responses as people become more discreet. It goes hand-in-hand with the move towards home manufacturing.


I would never truthfully answer a survey asking me about firearms.


It's not really intriguing when you consider that non-hispanic whites are the most likely to own firearms, and that that group's size has been essentially stagnant for the past few decades and is currently in decline.


Collectors and others of similar nature aside, I tend to wonder if this is going to lead to problems in the future?

I'm not anti-gun by a long shot (no pun intended), but pictures I have seen of some of these "collections" are staggering (like, enough guns and ammo to arm a small platoon of people).

In many cases they aren't displayed as a collection, but closer to a weapons cache in waiting...for what kind of situation I don't know.


I can clear up the confusion. This is the kind of situation:

https://www.cnn.com/videos/world/2019/04/30/violent-uprising...



Do you mean the percentage of owners?

I can count on one hand the number of people I know who own a home but don't own a firearm.


It's definitely region-dependent.

I grew up in an affluent suburb of Massachusetts, where guns were really uncommon.

I got stationed in Yuma, Arizona, where pretty much everyone owned guns.

Here in a suburb of Portland, OR, it's somewhere in the middle. Oregon is an interesting state.


I did mean the percentage, but it does look like the absolute number of households owning guns has very slightly declined.


I imagine it's difficult to get good numbers on ownership though as the cross section of people who would not disclose firearm ownership to the government or polling agency would also be likely to own a firearm. This is compounded by the fact that firearms last upwards of 100 years with minimal maintenance and there are healthy secondary and black markets for them.


Nope. No guns at this here house. Not since the tragic boating accident of early 2019.


What state do you live?


South Carolina.


Hell, I’m an order of magnitude higher, and am on the low end.


This is not at all the case for Remington, who enjoys name brand status with long respected product lines. I got my first 870 pump shotgun at a Wal-Mart 30 years ago, as of last year Wal-Mart was still selling them. It was a great gun. I love it. The only reason people stopped buying them is quality went down as they were sucked dry by a PE firm.


Normally caused by producing bad products, some wacky massive change to the business model or losing a government contract.


The theory behind this is, a stable company should have plenty of debt, as it can easily pay it off (because it's stable), and is generally cheaper than equity.

A company should also have only as much cash as it needs, else management will waste it

So a private equity company sees a company like Remington, with too much cash and not enough debt. It borrows a lot, buys it, and minimizes cash reserves. This tends to increase the market cap substantially

However, this obviously has some downsides, if you don't get the default risks just right...


This is sad to know. Back in India we owned a Remington rifle which was like 80 years old and still worked really well. No Indian made rifle could match its reliability.


The part I don't get is how Cerberus made money. It seems like it was a zero-sum for Cerberus. They loaned the holding company 225M, and presumably got that money back through the holding buying the stock back from Cerberus after the holding sold the 11% corp. bonds.

Is it that between when the holding bought the stock back from Cerberus and Cerberus (via the holding) sold the bonds Cerberus had control of Remington (via the holding stock) and therefore effectively sold Remington's assets, paying themselves through the holding's stock. Then, when Remington was valueless, the holding bought the stocks back from Cerberus as if Remington still had value leaving the bond holders hanging?

That's such a dumb scam. Why would anyone buy those bonds, and how was Remington able to get a loan to buy the holding's stock if Cerberus raided it?


Cerberus buys Remington for $118M in cash and assumes $252M in Remington debt. Except that it wasn't Cerberus, it was a Cerberus subsidiary S which Cerberus owned with stock X. Then Remington borrowed $225M which it transferred to S which then bought back its stock X from Cerberus.

Cerberus is then out of the transaction with $225M - $118M. Remington + S (which Cerberus no longer owns) has $252M + $225M in debt.


> Then Remington borrowed $225M which it transferred to S which then bought back its stock X from Cerberus.

hmm. so, who is willing to loan Remington $225M in that situation? it seems like "recently bought by private equity company known for shenigans" would discourage banks and prospective bond purchasers?


the holding company offered a generous interest rate of around 11 percent. When the interest payments were due, the holding company paid them not in cash but with paid-in-kind notes, that is, with more debt.

Who could refuse such a deal?


> In 2010, Cerberus had the holding company borrow $225 million from an undisclosed group of lenders, most likely hedge funds. [...]

ah, thank you for pointing that out.

but then:

> In April 2012, Cerberus did something fateful, which probably seemed smart at the time. It had Remington borrow hundreds of millions of dollars and use it to buy the holding company’s debt

hm so the first set of lenders were paid off. did the second set get similar terms?


My reading (which is not helped by the fact that the reporter appears more or less financially illiterate from a corporate finance perspective) is that Cerberus essentially took $225m out of the company (saddled the company with expensive debt). This had the effect of de-risking their equity investment (as they essentially got their money out) but making the company very levered. The net effect was that now Cerberus had a call option on Remington, if things went well they'd make a ton of money, if things went south, it would be the debt holders issue, but they would't "lose" as they'd recouped their initial investment


How are these strip-shops able to resell the heavily debt-burdened companies they create? That's the part I don't get.


They sell it to another sponsor who thinks they can do more with it.

But by and large most private equity shops are not in the business of asset stripping. Those deals just don't make the news and the average reader is oblivious to them


Buy 20 companies, execute private equity playbook. a few are zeroes, most make 1-5x over 3-5 years...


A historic, household name helps.


These private equity scams seem to revolve around borrowing money, transferring the debt to a separate legal entity that then declares bankruptcy, and pocketing the money. If that’s true, then it would seem that creditors (and AL taxpayers in this case) end up holding the bag. How are savvy lenders falling for this?


Yet another leveraged buy-out. Are there any business cases where one of these panned out well?


Leveraged buy-outs started off well enough. The original idea was something more like this: Old-timer spent years building a business, now it's worth about 2 million bucks and he wants to cash out. His young, motivated #2 in command wants to take over, and after years of saving has $200k. Old timer goes to the bank, takes out a $1.8 million dollar loan against all the business's assets, with the debt being the businesse's obligation. Older timer has the business pay him a one-time, $1.8 million dividend, and then sells the business to #2 for $200k. If business stays steady, the company's profits pay off the loan and everyone lives happily ever after.

As a way for old-timers to retire and pass on control of small private companies, LBOs are really useful. The problems started in the 80s when private equity firms realized they could sell enough junk bonds to do LBOs on giant publicly-traded companies.


well CalPERS net IRR investing in private equity is 10.7%... so yes

Also to the two cerberus funds in which it has invested are have produced 14-17% IRRs

https://www.calpers.ca.gov/page/investments/asset-classes/pr...


Depends who you ask.


At this point, I feel most employees of a business that's up for sale should just put their foot down and say no to selling the company to any private equity firm.

The owner can say, hey I worked for this and I need to exit with a plan.

Well, the employees can say we worked for this and we need to make sure we will have our jobs in 5 - 10 years.

I am working in a company that used to be privately owned, and was sold to a PE. It happened before I joined. The ones who are still here tell me the night and day difference in how the employees are treated before and after the sale. The treatment I'm talking about is how the employees are compensated.


the finitude of being

Companies are man made so the have a limited live span. There is no exception, every man made organisation will end. While this is sad for every single case, the finitnes is a good thing at all.

Thinking on finitnes of companies, stock market indexes have a mathematical limit.


They are living things. But also, greedy bastards can take living, thriving businesses into the embassy in Istanbul, chop them up and sell the pieces for profit.


Anyone know a convenient summary showing Cerberus total cash flows and net earnings for the full time?


inb4 private equity is evil and we should kill all financiers

Please don't throw the baby out with the bathwater


Thoughts and prayers


Vulture cannibal capitalists don't care who or what they destroy, as long as they make $.


Yup. Wonder if there's any co-op / worker-owned medium-sized firearms manufacturers that are US-based?


Remington just doesn’t have that many interesting guns. There are a ton of firearms manufacturers in the last 20 years. I’m guessing the AR-15 market alone is billions in revenue.


I'd argue that you don't need interesting guns if your basic offerings are really high-quality. There's room for "plain oatmeal" in pretty much any market.

The problem is that even their basic offerings have drastically declined in quality. If you make plain oatmeal, you'd better be really, really good at it, or else you have absolutely nothing going for you.


Exactly. This is Glock. Plain as it gets but they just work (TM).


And their quality has plummeted the past few years. I had an AK that could out-shoot my Rem 700 no matter what I did to it, and my 870 would only reliably eject Remington brand shells. Sold both, will never buy Remington again. Really a shame. Both of those were excellent guns back in the day.


That's sad. The 870 used to be the AK of shotguns. I beat that that gun like it owed me money and it kept cycling and shooting fine. The 700 used to be weapon of choice for many snipers. Hard to imagine today.


Not all (current) 870's are even created equally. The cheap one at a cabela's and a police model from a gun store are totally different leagues.


Almost all snipers in the US military today are still using a some Remington 700.

The Mk13 which is expected to replace the Marine's scout snipers M40 is 700-pattern, just not built by Remington.

You're going to be right soon, just not yet.

Likewise, "The Military" is still using Rem 870 and Mossberg 500 shotguns. The "other military" that is, the IRS, Deptartments of Interior, Energy, Education, and everything else; their SWAT teams all use the Rem 700 and 870.


They haven't switched to Accuracy International sniper specific rifels - the classic British two guys in a shed company.


It's a miracle the AWP got into Counter Strike. Either the design is so striking that it advertises itself or people-in-the-know recommended it. You'd think they'd use a Barrett as the "big ol' rifle" 3D model.


The Mk13 isn’t an AI. The ya a 700 letters Stiller with an AI AX chassis. And yea, I wrote they haven’t switched.


Sounds good to me. Essentially it ended up being an ethical investment. I hope Cerberus can use its "methods" on more gun makers.




Join us for AI Startup School this June 16-17 in San Francisco!

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: