Author Archives: Hognose

About Hognose

Former Special Forces 11B2S, later 18B, weapons man. (Also served in intelligence and operations jobs in SF).

Ramadi: Can’t They All Lose?

ISIL flagIn this corner, flying the black flag, you have the ravening whelp of miscegenation between Ba’athist butchery and Islamist idiocy, The Islamic State of Iraq and the Levant, aka ISIL, ISIS and Da’esh.

They’re Faction Number One. Nobody wants them to win.

In this corner, you have the Iraqi Security Forces and the Shia-controlled elected government that controls them.

They’re Faction Number Two. There are people that want them to win, but based on their performance to date, which includes breaking, running, breaking and running, and generally bugging out, nobody with a clue thinks that they can win. (We do recognize the “clue” bit does exclude much of official Washington, like the President and his slapstick national security team, and Martin Dempsey, the spineless yes-man heading up the Joint Chiefs). The ISF are the Montesquieu ideal of “a rational army”: that is to say, they ride far and fast, away from the sound of the guns.

The Iraqi flag increasingly marks Shia militia under Iranian command.

The Iraqi flag increasingly marks Shia militia under Iranian command.

And in this corner, you have the Iranian Revolutionary Guard Corps and their expendable cannon fodder, the fanatic Hashd al-Sha’abi sectarian militia/sectarian cleansing corps.

This Axis of Shiites makes up Faction Number Three. Almost nobody wants them to win, especially the Iraqi Sunnis whose necks are already on the chopping block thanks to ISIL. So Sunnis not presently in one of the other factins have the choice of try to make nice with ISIL, and probably get whacked anyway, or try to make nice with the Hashd. And probably get whacked anyway.

The reason it’s almost nobody, is that the US Administration is so desperate for a deal, any deal, with Iran, that they’re willing to see an Iranian client state where Iraq used to be. (Heck, they’re willing to see Israel nuked, if only they can have something to point to that erases the asterisk on the Nobel Peace Prize. Of course, with an establishment teeming with Establishment anti-Semites, like John Kerry and Susan Rice, they might not see that as a trade-off at all).

Flag_of_Kurdistan.svgAnd in the last corner so far, you have the Kurds.

Formerly divided into factions themselves, they are now more or less unified as Faction Number Four. The Arabs who make up most of the other factions want them — dead, that is. The Persians who stand behind (and sometimes alongside) the Shia factions want them dead, too. The Arabists in the US State Department fall into line with the leaders of their area of interest. The Turks will gladly revisit the Armenian Genocide on them, and then deny it for a century. The only reasons that the Kurds have not been exterminated to date, in the face of all this militant, armed loathing, are about the same reason that Israel still stands:

  1. The Arabs have many gifts as a race, but a command of war is not among them
  2. The Kurds (like the Israelis) insist on their own self-defense.

There is one other significant group — the Gulf Arab states. Formerly allied with the United States, they’ve been cast off in the hasty, drunken tilt towards Iran. Should a Sunni force that could resist ISIL emerge, you could expect the Gulf to support it, US preferences be damned; but with essentially all of Sunni Iraq now under the black flag and dripping sword of ISIL, they need the one thing that money can’t buy them: fighting men in boots on the ground.

What Happens to Iraq?

First, when some Beltway lordling makes strategic noises, you can discount that completely. The more GEN Dempsey, Sec. Kerry, Samantha Power, Susan Rice natter about how “everything is  proceeding as we have foreseen,” the more you realize why people feared Darth Vader and laughed at Baghdad Bob. The US has sacrificed most of its potential in the area; all we’re doing now is ineffectual, symbolic airstrikes, at the risk of real, American lives; and some pinprick SOF raids that can hurt the enemy a little, but that never risk beating him.

For a predictive model, look to the Congo, Chad, Somalia. The collapse of unifying institutions (which in Iraq was basically only the Armed Forces; thank you again, L. Paul Bremer) leaves two possibilities, endless war (which is de facto favored by all players trying to restore an impossible status quo ante), and Failed State, the war of each against each, where men fight for nothing but their lives and their families, and where, every day, they have to.

S&P Drops Colt Defense Below Junk to “D for Default.”

colt_logo_mAccording to a notably focused and clear analysis by Laura J. Keller of Bloomberg, Colt’s bonds’ rating has been dropped from an abysmal CC to D, as low as ratings go, sometimes called in the finance world “D for Default.”

Standard & Poor’s reduced Colt’s rating two grades to D from CC, according to a statement Tuesday from the credit grader. The new rating means S&P considers the company “in default or in breach of an imputed promise” and that it has ruled out the possibility the manufacturer will make good on a missed interest payment during a 30-day grace period.

As we mentioned in comments to our last report on Colt’s Perils of Pauline fiscal drama, they were technically in default as soon as their interest payment came due and they did not have cash on hand to pay it.

The weapons maker didn’t pay the $10.9 million due May 15 to holders of its $249.4 million of 8.75 percent unsecured notes due November 2017, according to S&P. Colt had warned in November it was “probable” it wouldn’t have the cash to make the payment if it didn’t meet internal sales forecasts.

Colt received an unsecured loan from Morgan Stanley for $70 Million in November, just barely avoiding default at that time, by using the loan proceeds to pay the bond interest increment ($10.9M) and fund ongoing operations. Most of that cash is gone now, with only $8.4M in unencumbered cash available at the end of April (and another $10.9M payment due May 15th). (Colt has a few million more than that, but the cash was used as security for a loan, and paying that specifically earmarked “restricted” cash back takes priority over other debt, in a bankruptcy scenario).

The Sword of Damocles hanging over the bond holders is the probability that they’ll be zeroed out completely in a bankruptcy. Colt had hoped that imminent threat would get them to accept a 70% haircut to roll their bonds over into newer and even more speculative debt. When they didn’t bite by 12 May, they rolled the dice for another week, and then, on the 18th, rolled the dice again. Colt’s net assets, per Bloomberg, are over 100% collateralized, meaning in a bankruptcy, bondholders are left with an empty bag.

In a bankruptcy scenario, not much would be left for holders of the 8.75 percent junior notes, according to S&P. Since the $102 million of collateral available to Colt’s secured lenders is just shy of the $103 million they’re owed, S&P estimates holders of senior unsecured debt would recover between zero and 10 percent of their investment.

In other words, even in a liquidation, these bondholders get to the head of the line only after all the juice has been squeezed.

Naturally this has an impact on the market for the bonds:

The junior notes traded in odd-sized lots at 27.75 cents on the dollar at 4:37 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

It’s a little surprising that they’re worth that much in the market, because it’s hard to imagine any way to get a 25¢ recovery on these bonds at this point, unless Colt’s intellectual property brings a lot more at bankruptcy auction that the market values it at.

Elsewhere in the Industry

Colt is not the only firearms maker in the news. Cerberus, a hedge fund, has announced that it has failed in its attempts to sell its firearms holdings, now organized as Remington Outdoor, and instead is offering  to cash out institutional investors, including politically-managed California public employee pension funds, that have the vapors over buying guns. Cerberus managers have claimed that because of public perceptions of guns as naughty things, they couldn’t even get the underwriting to take Remington public.

This is nonsense. Look at how Morgan Stanley stepped up to make that unwise $70M loan to Colt, and consider how low and even negative interest in “safe” investments has investors taking wild, inadvisable risks. But the nonsense may serve Cerberus’s ends well. If they can get CALPERS, etc., and other “socially conscious” investors out and bring their former stakes in-house before going public, they would likely leave Cerberus investors with the best kind of financial problem: how to handle massive capital-gains taxes on a hugely successful investment. But the Remington story has already been spun as a sign of the “collapse of the gun market.”

It is only a matter of time before writers for the anti-gun daily media start combining these stories (and HK’s woes in Germany, which are political and don’t financially threaten the firm, yet) to crow that the gun industry is dead: only, it isn’t. For example, here’s a paragraph from New York Times anti-gun activist reporter Michael de la Merced, emphasis ours, from their report on Remington’s cash-out offer (which the Times illustrated with a photo of their close allies, professional protesters at an antigun rally):

Compounding the problem has been the reluctance of big lenders to participate in the sales process for fear of potential hits to their reputation. Banks like JPMorgan Chase and Credit Suisse have rarely advised or lent money to deals involving firearms makers, making it more difficult for potential buyers to afford Remington….

(Emphasis in the above is ours. We guarantee you that timidity about reputation is not what drives Wall Street). The more key revelation is buried in the report and apparently unnoticed by de la Merced: the cashout values Remington at 880M, about the size of S&W’s market cap, far lower than the $1B-plus Cerberus earlier estimated for the firm’s value. (Of course, valuation of a private company is one of the thorniest problems in finance; in the end, value is what you can actually sell it for, and funds like CALPERS, which would long ago have been bankrupt if they had to meet the financial requirements of private firms’ pensions, have to decide how big a bath they want to take for the sake of political purity).

While 2014 sales for the industry may have been down from the 2013 peak, they weren’t down much and indicate that panic buying has subsided into a new and higher level of ongoing sales. There are many of indicators of this. For example, in 2014, the FBI’s National Instant Check System was overwhelmed with call volume, leading to unprecedented delays in answering calls:

Many call center operations have a target goal of answering 80 percent of calls within 20 seconds. However, the NICS Section’s goal is to answer Transfer Process calls (background checks for firearm purchases transferred from the NICS Contracted Call Center to the NICS Section’s staff) within 9 seconds. Based on historical data specific to transaction and call volumes, the NICS Section is able to forecast anticipated levels of staffing needed to effectively process incoming work. In 2014, the NICS Section’s Transfer Process calls were answered on an average yearly rate of 109.27 seconds due to several months of high call volume.1

If their usual objective is 9 seconds and “several months” of high volume blew their delay out to almost two minutes, think about the mathematics of that… those peak periods had really high volume, then.

Also, when the media writes that gun sales are down… bear in mind that 12.7 unadjusted NICS checks were done in 2008, the last year before the Salesman-in-Chief amplified gun sales. 2014’s down number rounds to 21.0 million, from 2013’s 21.1 million… to two places, it’s so far down it’s 99.41% of prior years.2 (We used to call that “flat,” but we just have an MBA, not a J-School sheepskin, so what do we know?)

As readers of know, Colt’s problems stem only partially from the company’s struggle with new products and market forces. Colt’s traditional products, the 1911A1 pistol and AR-15, M16 and M4 rifles remain popular worldwide (42% of the value of sales is overseas, according to the firm’s most recent SEC filings). The real mortal wound was inflicted by the company’s own managers: the company was overburdened with a fatally toxic load of debt. They did this, not as fiduciaries for the company, but in their capacity as the individuals who personally pocketed much of the money.

When Colt goes bankrupt, an event we see as unavoidable now, expect the innumerates of the New York Times to crow that the failure results from some imagined unpopularity of guns and increasing popularity of New York style gun ban regimes. Politicians who believe them and act accordingly will likely be slaughtered at the polls in all but the six or seven states where gun bans are legitimately popular.

The Bloomberg report on Colt Defense’s financials is concise and accurate, though, so do Read The Whole Thing™. Hat tip, Daniel Watters in the comments to our last Colt report.


  1. Federal Bureau of Investigation. 2014 NICS Operations. Page 6. Retrieved from:
  2. Ibid., p. 12.

New Jersey: Drugs, Guns, and Crime

North Jersey is a remarkable little corner of the planet. Cheek by jowl with some of the most expensive real estate in America are some of the nation’s most down and out losers. The drug addicts are mostly invisible to the Wall Street nabobs who sleep well in Jersey — at least until one of them breaks into a nabob’s house and steals his stuff. (Many of these addicts, though, are too disorganized and dysfunctional to successfully travel a few miles and conduct a residential burglary in a wealthy area. Instead, they steal from other poor people nearby).

Back in February, Bergen County prosecutor John Molinelli tweeted this video out on his media twitter account.

In Heroins Grip. All should follow this.

via John Molinelli (@johnlmolinelli) | Twitter.

The video wouldn’t be complete without some Rev’rend intoning that it’s all because the people don’t have jobs. Earth to Jersey: addicts aren’t addicts and dealers aren’t dealers because there are no alternatives. They’re that way because they like doing drugs, and they like selling drugs, and that’s the alternative that they like. Maybe because, in the world of the therapeutic state where everything’s a disease to be cured, the consequences, prior to an early death, are low enough that the cost-benefit calculus looks good — to a malformed mind.

If you read deeper into Molinelli’s Twitter account, there were dozens and dozens of fatal ODs in his county last year — about one and a half to two per week on average. Of course, if his county is like the other ones we hear about from LE (many of these deaths never even make the newspapers!), they don’t come at a steady rate, but occur in clusters.

A lot of them are young people who got off the life track and onto the drug track. (As the video sort-of notes, the dealers may be from the urban black underclass, but most of the customers come from the white suburbs). We have a dozen or two a year in our own, much less populated, county here in NH; the ambulance we saw the other day in front of a homeless shelter (conveniently located near the high school!) may have been the latest, or it could be that that title still belongs to the kid they found in the woods a couple of weeks ago. The woods where he had been living, as he injected 100% of the earnings of his crappy retail job in the form of heroin, or what someone sold him as heroin.

These drug users are pitiable, lost souls. But they commit a lot of property crime, and a good percentage of violent crime. Another large percentage of violent crime is, you might say, the Alternative Dispute Resolution system employed by the jobbers, distributors and retailers of recreational pharmaceuticals. If it weren’t for these drug users, an awful lot of crime wouldn’t be occurring. (Or maybe they’d be doing it over alcohol. Criminals commit crime, as a Geico ad featuring them might say).

And how did they get, in the title of the short video, “In Heroin’s Grip”? Did it reach out and grab them? Or did they offer themselves as sacrifices to the dark gods of momentary pleasure? We think we know the answer to that one.

We’ve always thought of an OD as a neat and orderly terminal dot at the end of a chaotic life of rampant crime. Cruel but true.

We have tried soft love, and it fails. We’ve tried tough love, and it fails. Maybe love is not the answer.

Maybe cruelty is the answer. Maybe it’s time to stop treating the real world like a Hallmark after-school special. If we really thought of the Drug War as War, we’d clandestinely inject fatal impurities into the drug supply chain and let the users kill themselves off, and the suppliers go belly up for lack of clientele. We don’t do that, so the whole thing is empty, vain posturing.

Molinelli, of course, is a good New Jerseyite. He wants to ban your guns because his dope dealers (that get wrist-slapped in the NJ courts, and released to commit further crimes) are committing gun crimes. More empty, vain posturing, but in this case, at the expense of real people.


When Guns are Outlawed, only Outlaws Will Have Crazy Girlfriends

The look of cray-cray: Shaynna Sims smirks at the mugshot machine.

The face of bughouse cray-cray: Shaynna Sims smirks at the mugshot machine.

The good news: the victim in this case was already dead (none of the stories say, of what, which, given the decedent’s rival’s relative youth, is interesting). But at least this particular crime isn’t a murder. That’s pretty much the full reach and extent of the good news.

Prosecutors added a fourth felony charge against 26-year-old Shaynna Sims on Thursday, accusing her of removing both breasts and a toe of the deceased woman during a viewing at a funeral home in Tulsa. If convicted, she could face up to five years in prison.

What, that’s it?

‘Fraid so. Fact is, our laws were evolved for the usual run of axe whackers and baby rapers, an element of society that always seems to have been there, at least since Cain slew Abel. The law’s just not ready for Industrial Strength Bughouse Cray-Cray®.

Sims was arrested at the dead woman’s apartment after she attended the viewing on April 30. Police said Sims also stole the dead woman’s shoes and was carrying a knife with the woman’s hair attached to it.
Witnesses told officers they saw Sims reach into the casket during the viewing. The dead woman’s face was found slashed from her hairline to the tip of her nose, her makeup was smeared and her hair was on the floor, police said. The additional mutilation of the woman’s body was discovered as it was being prepared for cremation.

via Oklahoma woman accused of removing dead rival’s body parts – SFGate.

Sims and the decedent were apparently romantic rivals for Sumdood, who goes unnamed in the story. He must be a real prize.

Note: no guns involved, but the Bat Guano Crazy® is strong with this one.

How would you deal with her, if you could imagine your own perfect set of laws into being?

What’s the right penalty for Shaynna Sims? free polls


Decisions, decisions.

Can’t she collect ’em all?

More on the Pennsylvania Registry-not-Registry

pennsylvania_state_reg_formIn comments to our last on the Pennsylvania State Police’s gun-registry-that-is-not-a-registry-because-it’s-so-fulla-holes, we were challenged by a Keystone State resident who doesn’t recall filling out the PSP form. Here’s what we’ve learned.

At one time, they just had the dealers send 4473 copies, but some time relatively recently (~10 years ago), their lawyers had them discontinue that, and generate their own form, PSP SP4-113 (+ variable numbers).

The PSP deliberately does not put this form on the intertubes. That is because their registration bureaucracy, the Firearms Records Unit, came up with a complex numbering system, where each form is uniquely numbered to the FFL that sold the gun (or handled the transfer, for a pistol between private parties). There is also a state ID number which is used not just to ID dealers but also for private transfers done by any county Sheriffs who offer this service. PSP explains:


Application/Record of Sale Form (SP4-113)

This form will be provided by the Pennsylvania State Police and all requests for this form must be submitted in writing. You can fax your requests to (717) 772-4249 or mail requests to Firearm Records Unit, Pennsylvania State Police, 1800 Elmerton Avenue, Harrisburg, PA 17110. Note the pre-printed numbers on this form are assigned to your dealership. Therefore, you can not loan copies to other dealers or duplicate this form. Please allow several weeks for the processing of your order. This form is not available online.

They do make a graphic instructional version available [.pdf], of which we’ve made an illustration here (it embiggens). You can see from this illustrative sample that the form was originally drafted to be used with short and long guns, but now it is required only for handguns.

While a single 4473 can cover multiple guns (our personal record is six), this state form must be done all over again for each gun in a multiple buy — even though they’re all on a single federal form. For each firearm sold or transferred, the dealer collects a $3 surcharge and a $2 Instant Check Fee, which are aggregated and remitted monthly to the State Police.

The copies our Fed friend found in a violent career criminal’s closet, in the boxes with the guns, were copies of this form — PSP SP4-113.

When the other copy gets to the Firearms Record Unit, it’s supposed to be entered in the database, but LEOs think it’s far from a certainty that this will happen, soon, or at all. That’s how you wind up with felons with over-the-counter guns in Pennsylvania —

Meanwhile, some jurisdictions are busting even licensed carriers if their guns don’t show up in this registry-that-isn’t. These cases may not stand up in court, but they’re a way to hassle gun owners — one of new Commissioner Marcus Brown’s major goals for the State Police.

Industry News: TrackingPoint winks out; Colt, ?; ATF Raids Stag

Some days there’s a bit too much news to deal with, and it’s all bad news.

First, TrackingPoint. Bad News.

tracking_point_advanced_modeThe maker of high-tech and extremely costly integrated optics/arms systems has sent its employees home, suspended sales and orders, and closed its doors. has a good overview:

The Texas-based scope company, located north of Austin, launched almost three years ago when it introduced the precision guided firearm system that allows the user to tag a target up to 1,000 yards out and hit it once the trigger is fully compressed.

Source familiar with the company told that more than 20 people were laid off today and given a two-week severance package, but we have been unable to confirm those details with an official with the company.

Rumors of financial difficulties surfaced in February when the company hired a new chief executive officer and laid off an unspecified number of employees. At the time new CEO, Frank Bruno, told that the company was cutting its research and development branch in order to lower costs and initiate new steps in a business plan.


Reports from June put TrackingPoint’s estimated revenue at $20 million for 2014, and $10 million revenue in 2013, but the company’s new CEO, Frank Bruno, declined to say in February if these figures were in line with current growth.

It’s a good and thorough report, as thorough as it can get without an update from the horse’s mouth (which is understandably not forthcoming), so go Read The Whole Thing™.

Shooting Sports Retailer, a site that’s increasingly becoming as important to industry watchers as TFB and, noted that the company is “officially out of business,” that these layoffs were the half of the company that didn’t get whacked three months ago, and that SSR was warned some time ago that this reckoning was coming.

A source alerted SSR May 18 that TrackingPoint is “officially out of business” but a statement on the company’s website simply says TrackingPoint “is no longer accepting orders” and that it thanks its “loyal customers and followers for sharing our vision.”
Screen Shot 2015-05-18 at 1.43.47 PM
In February we reported that TrackingPoint had fired nearly 50 percent of its workforce and appointed a new CEO, Frank Bruno. At the time Bruno said his company was poised for success and had grown its orders more than 200 percent.

But inside sources were telling SSR the company would go bankrupt by year’s end. Now it looks like that prediction has come to pass.

The question becomes: what happens to TrackingPoint’s technology now? They were never able to get it over the RDT&E hump and into production, where economies of scale could bring the price down. A deal with Remington (one of the many heads of Cerberus — the mythologically-challenged founders should have called that company Hydra) produced a disappointing de-contented version.

There are several possibilities for TrackingPoint:

  1. Chapter 11 reorganization (which would erase most of the debts incurred by the company’s $45 million R&D effort), which would preserve something of the company, while zeroing out investors and haircutting (at least) unsecured creditors. Freed of the burden of debt, the new company might thrive.
  2. Chapter 7 liquidation (which would sell off the assets of the firm, its technology probably foremost, and use the proceeds to make secured creditors whole, if possible, and make partial restitution to unsecured creditors, if anything is left after the secured creditors are paid. In this case the patents and technology might vanish, into one of the large defense industry prime contractors or even overseas.
  3. Some variety of sale of the whole thing, which might have it resurface as part of a larger firm, either in the firearms industry or (more likely) the defense industry. Unlike Colt, whose moves are constrained by its nature as a publicly-held (stock exchange-listed) company, privately-held TrackingPoint can probably explore more options for survival of the company, or at least, its DNA.

Hey, That Reminds Us. What About Colt?

As you remember, when we left Pauline at the close of last week’s episode, she was chained to the railroad track, and the 1:30 from Tikrit was approaching, flying a black flag. Colt had just kicked the can down the road extended the deadline for the scantily subscribed exchange offer for 8.75% Senior Notes due 2017, bonds which are technically in default already, as Colt missed last week’s payment. But the one-week can-kick was how Pauline got off the scraggly branch she was hanging from over a long drop into Desperation Canyon at the end of the previous week’s episode, and onto the railroad tracks instead.

As we write this, Colt still has a technical chance of getting its bondholders to take the offer, in the same way that Chicago Cubs fans tell themselves they their team is not mathematically eliminated yet in late-summer baseball. But as we wrote this last night, Colt was just an hour short of the latest deadline (i.e. the arrival of the Tikrit Express):

The Old Notes may still be tendered, Consents may still be delivered and votes to accept or reject the Prepackaged Plan may still be casted until midnight, New York City time, on May 18, 2015 unless the Exchange Offer, the Consent Solicitation or the Prepackaged Plan Solicitation is terminated or withdrawn earlier, or unless the Exchange Offer, the Consent Solicitation or the Prepackaged Plan Solicitation is further extended.

So sometime today there will be news of one of these, from least to greatest probability:

  1. a resolution of Colt’s financial problems by some deus ex macchina (i.e., sale to a new hedge fund)
  2. bankruptcy, either as Chapter 11 reorganization or Chapter 7 liquidation;
  3. a daring escape for Colt, kicking the can yet again to a new deadline.

Something that can’t go on forever, won’t — but there are a lot of clever guys on Wall Street who can wring every minute of life out of an undead company. And something that can’t happen (like Colt paying off its debts) won’t happen. So somewhere in the other large set of Things That Can Happen is what will happen.


This part of the post was OBE. As we posted last night, after scheduling this post to go live, Colt released a new deadline of May 26 (yes, it kicked the can another week — which we thought the most probable outcome).

Finally, Stag Arms is in a Legal Jam

Once again we’ll go to for the tale of the tape, as it were.

Federal agents seized thousands of gun parts and documents from New Britain gun maker Stag Arms LLC today.

According to court documents, an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives revealed that Stag failed to comply with the National Firearms Act when agents found 3,000 unserialized machine gun lower receivers, and that the company failed to maintain documents for 136 unserialized receivers.

Stag’s owner, Mark Malkowski, was named as the claimant in the civil suit filed in Connecticut federal court on May 6.

ATF inspectors discovered the alleged violations last July and August during a routine check of Stag’s facilities and the inspector subsequently informed the company.

Tadeusz Malkowski, the federal firearms licensee for the Stag facility where the unserialized parts were found, told ATF inspectors that the receivers had been on the premises between seven and 30 days because the employee who serialized the receivers was on vacation, according to the filing.

This sounds pretty bad, but so far there have been no criminal charges. What is really happening here is that Stag’s IOI seems to have gone wild on the firm.

The IOI reneged on a verbal OK previous IOIs had given the company about keeping spare receivers on hand to retro-serialize to replace damaged receivers for warranty or other repairs. If you do this, expect ATF to target you (not that they’re consistent at all from one office to another). If you want to keep receivers to be serialized as replacements, keep those receivers in an incomplete state, which ATF has generally interpreted to mean no milling or drilling of the fire control pocket (partially finishing the pivot and takedown pin recesses, broaching or EDM’ing the magwell, finishing the mag release and bolt release recesses, and partially finishing the buffer tower (drill and tap for receiver extension), have all been ruled OK in the past). Go beyond that without a serial number and maker name, city and state on the receiver and they will violate you.

ATF Managers and US Attorneys, including the ones involved in this case, have been given marching orders to destroy firearms companies, and especially, makers of Modern Sporting Rifles, by any means necessary.

Here’s the .pdf of one forfeiture complaint. As is customary with forefeiture proceedings, the “defendants” are the seized guns and they are guilty until Stag proves them innocent. The file is courtesy of


The forfeiture complaint makes little sense to us, as they charge that these receivers were unserialized, but they list them by serial number. There are also many fewer receivers listed in this complaint than the 3,000-plus that the ATF supposedly seized. Three thousand receivers are a staggering number but as Stag produces about 150,000 a year, it’s really only a week’s production.

The anti-gun reporters at the Hartford Business Journal breathlessly reported that, “a large cache of gun parts” was found — at the gun factory. Layers and layers of editors!

In court filings and to the Hartford Business Journal, ATF agents charged that Stag is “suspected of ongoing illegal activity” and “unauthorized trafficking of guns.” They have also called all the receivers the company had on hand “machine guns,” and have obtained an opinion from the ever-flexible Firearms Technology Branch supporting that position.

Breaking: Colt Kicks the Can One Week Forward, Again

colt_logo_mWe have been watching Colt as Monday night was a deadline for bondholders to take up Colt’s decidedly unappetizing bond swap option, or the nearly-as-bad prepack option.

As of 11 PM Colt had not posted the release to their website, so we have much of the background of this story coming out in one scheduled for 0600. But we did just find the release on a British Yahoo Finance news website, that picked it up from Business Wire.

On May 18, 2015, Colt Defense LLC (“Colt”) and Colt Finance Corp. (“Colt Finance” and together with Colt, the “Issuers”) announced that (i) the “Expiration Date”, the “Consent Expiration Time” and the “Withdrawal Deadline” have been extended to 5:00 p.m., New York City time, on May 26, 2015 for their previously announced exchange offer (the “Exchange Offer”) to exchange their 10.0% Junior Priority Senior Secured Notes due 2023 (the “New Notes”) and the related subsidiary guarantees for any and all outstanding Issuers’ 8.75% Senior Notes due 2017 (the “Old Notes”) and (ii) the “Voting Deadline” and the “Withdrawal Deadline” (only applicable if participating in the Exchange Offer) have been extended to 5:00 p.m., New York City time, on May 26, 2015 for their previously announced solicitation of votes (the “Prepackaged Plan Solicitation”) to the prepackaged plan of reorganization (the “Prepackaged Plan”).

Other related deadlines have also been dropkicked just short of a week ahead from midnight on the 18th to 1700 on the 26th. Despite that, the take-up of the Colt offer among the 10% bondholders (now two weeks into a default) remains very low:

The Issuers announced today preliminary results of the Exchange Offer. As of 5:00 p.m., New York City time, on May 18, 2015, approximately $14.1 million, or 5.65%, of the outstanding principal amount of Old Notes had been validly tendered and not validly withdrawn.

That’s pretty lousy takeup, when they needed… 98%. This is barely a half-percent of movement for the firm since their last can-kicking exercise a week ago. As we quoted their then release:

The Issuers announced today preliminary results of the Exchange Offer. As of midnight, New York City time, on May 11, 2015, which was the previously scheduled “Expiration Date” for the Exchange Offer, approximately $12.7 million, or 5.1%, of the outstanding principal amount of Old Notes had been validly tendered and not validly withdrawn.

At 5.65% they’re still 92.35% short of exchanging the old debt for new. As we noted at the time, and as Colt managers certainly understand, there’s not much hope of closing the gap, and the trends are all against the company. But the new release does hint that something else is up:

The Issuers believe it is in the best interests of their respective stakeholders to actively address their capital structure and have commenced discussions with an ad hoc group of holders of the Old Notes. The Issuers hope that such discussions will result in a consensual restructuring transaction.

Translated from the financial-ese, this suggests that while Colt hasn’t seen much action on its offer of junkier bonds (at a lower rate!) at a large haircut off their current, defaulted junk bonds, it has behind-the-scenes negotiations with some quantity of the holders of these bonds. A “consensual restructuring transaction” lets Colt continue to operate, without being sued into Chapter 11 or Chapter 7 by holders of the defaulted financial instruments.

There’s a little more background in tomorrow morning’s post, actually.

Past coverage:

20 Nov 14: Is Colt Going Paws Up? Why? An Analysis

20 Nov 14: No, Colt Didn’t Default

12 Dec 14: Pythons Can’t Save Colt

5 May 15: Is Colt Toast?

12 May 15: Colt Past Financial Deadline, Extends Deadline



“Locks Keep Honest People Out.” Example #32,767.

We never heard of Samy Kamkar until this Wired article, by Andy Greenberg, hit. Samy’s little gadget is not only a successful automated exploitation of a common combination lock, it’s also a successful exploitation of everybody’s (including our!) fascination with 3D printing… and mischief.

If you’re not impressed with Samy after this, you’re not paying attention. What college taught him all of this? Nothing but hands-on experience, baby. He dropped out of high school.

If you want your own Combo Breaker, the 3D models and source code live on Samy’s GitHub. He’s fully on board with open source, as you might expect for someone who came up in the maker community:

Fortunately, your locked stuff is still safe, because who’s really going to build one of these things?

Except, you can do it by hand, too. Voilà:

OK, but in the first video he shows you a little of how to make an automated version (there’s a follow-up coming). In the second one he shows you how to do it by hand — with his website crunching the numbers for you. Do you want to really know what’s going on here — inside the lock? Well, as it happens, he’s got that, too.

Now you know why you didn’t throw away any of those locks you don’t have combinations to. You can find the combinations for them now! Of course, so can anybody else, but if you ever needed more proof of the old adage that, “Locks keep honest people out,” here it is.

This technique may or may not have been taught in a Defense Against Methods of Entry program, and may or may not have analogues on other American and foreign locks.

Samy’s website and twitter feed are very worthwhile if you’re into this stuff.

Where will Samy Kamkar wind up? Well, Apple’s famous two Steves started out making a gadget that would scam free long-distance calls. Under today’s Federal communications laws they’d have been major-league felons before their age of majority.

(Yes, the number in the title outs us as reformed geeks, doesn’t it?)

When Guns are Outlawed, Only Outlaws Will Have Promontories

bouncePeople say having guns in the house is risky. This is silly, of course: getting shot with guns is what’s risky. In the house, they just sit there.

But even getting shot pales, as far as risk goes, compared to BASE jumping. BASE jumping may be the most deadly sport extant: while it stands for Buildings, Antennas, Spans [bridges], and Earth [mountains and cliffs], the things that BASE jumpers jump from, it might as well be an acronym for what ultimately happens to them:

  • Bounce
  • Auger (in)
  • Splat
  • (the) End.

Or as we used to say, they come down with “deceleration sickness.” Many, many BASE jumpers die, sooner or later. The couple of people we knew who did it wound up dying. Meanwhile, most of the people who got shot, didn’t. It’s safer, catching an AK round in the boiler room, actually.

The latest bouncers were a pair of buddies who leapt off a “promontory” in the stunning scenery of California’s Yosemite National Park, only to become one with that scenery, and not in a Guru Pitka way.

Extreme athlete Dean Potter, renowned for his bold and sometimes rogue climbs and BASE jumps, was one of two men killed while attempting a wingsuit flight in Yosemite National Park, a park spokesman said Sunday.

Someone called for help late Saturday after losing contact with Potter, 43, and his climbing partner, Graham Hunt, 29. They had jumped from a 7,500-foot promontory called Taft Point, park ranger Scott Gediman said.

The two decedents reportedly jumped from Taft Point, on the left (where the people are standing).

The two decedents reportedly jumped from Taft Point, on the left (where the people are standing).

He said a search-and-rescue team looked for the men overnight but couldn’t find them. On Sunday morning, a helicopter crew spotted their bodies in Yosemite Valley.

No parachutes had been deployed.

BASE jumping is an acronym for fixed objects in which someone can parachute from: building, antenna, span, and Earth (such as a cliff). The sport is illegal in all national parks, and it was possible the men jumped at dusk or at night to avoid being caught by park rangers.

For more information you can Read The Whole Thing™.

Many of the founders and low-numbered luminaries of the sport of BASE jumping have died doing it. It is, of course, their lives and their right to risk them. That doesn’t stop authorities in many places from seeking to ban, restrict, or regulate the activity.

BASE jumping is banned in Yosemite National Park, to prevent fatal mishaps. So instead they do the already-hyper-risky activity in the freaking dark, where the risk is off all charts. How’s that working out?

We personally think Dean Potter was out of his ever-loving mind, but it was his asterisk, as the expression goes. What did he say about risk?

Though sometimes I have felt like I’m above it all and away from any harm, I want people to realize how powerful climbing, extreme sports or any other death-consequence pursuits are. There is nothing fake about it whether you see it in real life, on YouTube or in a glamorous commercial.

“Nothing fake about it.” Men have died for less. Dean Potter and his jump buddy Graham Hunt, ave atque vale. 

Very Rare SEAL Taxi Offered on eBay

Before we get to the shell of a historic mini-sub that made a brief appearance on eBay last week, we should take a look at the history — always noting that We Are Not Frogs and, just as importantly, We Were Not There, so all this is subject to revision by those who do have inside information — if they ever feel like talking, which they haven’t, much, to date. (Contrary to popular opinion, not every SEAL gets a book agent’s contact info engraved on the back of his shiny new Trident. Most of them clam up as well as their fellow quiet professionals in other branches).

It all started when World War II ended, and the contracting Royal Navy shared its underwater technology with its American cousins. While the US had developed excellent combat swimmer units in the Navy’s UDTs, and early SCUBA gear of several kinds in the highly compartmented OSS Maritime Unit program, the UK had a capability the US couldn’t touch: machines that could deliver a swimmer, and more to the point, a very large high-explosive charge, over considerable distances — underwater. So the US accepted the gift of “chariots” (the British improvement on the Italian Siluro a Lento Corsa [SLC]“low speed torpedo” and Siluro San Bartolomeo), and of a quantity of “X-Craft,” miniature submarines. The chariots proved to be highly limited, and not very popular; but the frogmen loved the X-Craft.

Italian Siluro a Lente Corsa. The Chariot was a reverse-engineered and Anglicized version.

Italian Siluro a Lente Corsa. The Chariot was a reverse-engineered and Anglicized version.

Until Big Haze Gray officiated at a turf battle between what was then the UDT community and what was, and still is, the  Submarine Service. The Sub Service was massive, full of admirals, had been critical to WWII victory and had a vision of an all-nuclear fleet that would put the Navy back in the strategic-warfare game. Those sub admirals also had a profound jealousy of anything else that dipped under the waves, in what they considered King Neptune’s — and their own — personal territory. The UDT community was tiny and could maybe latch on to one Captain. An agreement was hammered out — that is to say, dictated to the nascent special warfare community — that limited the UDT (and their offshoot, the SEALs) forevermore to wet subs like the Chariot. The Navy promised to support the frogmen, but the submarine service would take charge of that.

One look at the Not-Invented-Here X-Craft, and the Submarine Service sent them to scrap. They also took over a minisub the frogmen had been developing — and scrapped it, too. The choices were: wait for the Submarine Service to support you with a dry sub, which was never going to happen, or develop your own free-flooding wet sub.

So UDTs spent significant time in the 1950s trying to develop a better wet sub. (Indeed, the SEALs are still trying to develop a better wet sub). This remains a major unforced limitation on SEAL capabilities — the problem is, any wet sub can either [1] operate in the tropics or [2] deliver hypothermic SEALcicles in the temperate zones, arctic or in areas of cold currents. Meanwhile, the subs built for general sub service have gotten ever bigger and more coastal-shy over the decades, meaning the frogs are looking at a longer ride in the wet sub at best, or leaving missions on the table for lack of clandestine infiltration capability.

The early Swimmer Delivery Vehicles (SDVs) were… well, we can charitably chalk them up as learning tools. Orr Kelly wrote in his SEAL/UDT history, Brave MenDark Waters:

Then, in the mid 50s, came the Mark 2, built by Aerojet General according to a design from General Electric. From the outside, the Mark 2 looked like a little airplane, with the two-man crew sitting side-by-side. Inside, it would very much like a 1956 Ford pick up. [Naval Coastal Systems Center ocean-engineering head WT “Tom”] Odum says the designers reasoned that the crew members would find the little craft extremely claustrophobic but that they would be more comfortable in familiar surroundings, so they modeled it after the interior of a popular truck.

Aerojet SEAL SDV Mk2 period photo

The Mark 2 was the Navy’s first effort at a sophisticated swimmer delivery vehicle. It was powered by silver zinc batteries, used a gyroscopic compass, and was equipped both with a hovering system and with thrusters that permitted it to maneuver left, right, up, and down.

Unfortunately, it was, as Odum says, “a hydrodynamic nightmare – it just didn’t have any stability.” The little craft never got beyond the experimental stage. It was so unstable that it could not even be towed through the water until it had been pulled up onto a large sheet of plywood.

At that point, Kelly drops the SDV program and picks it up in a paragraph or three with the Vietnam-era experimental Mark 6. Assuming the original dry sub that was sub-napped and sent to bureaucratic Davy Jones’s Locker by the Submarine Service was the Mark 1, the Marks 3, 4, and 5 were probably intermediate submersibles. This period photo shows numerous early SDVs including the Mark 2… some of the other experiments here may have been some of those little known intermediate numbers. The SDV Mark 2 is third from the left. The small pod on the far right may be a Mark 1 Swimmer Propulsion Unit, another experimental device that was not fielded in quantity. The three machines between the Mark 2 and the possible Mark 1 SPU may all three be a single kind of machine with different transparencies fitted.

Early SDVs

It is unknown how many SDV Mark 2s were manufactured — given its poor performance under test, there may have been only one. But, almost miraculously, one of these early efforts survived. It showed up on sale on eBay with the following blurb:

interesting 2 man wet submarine by defense contractor AeroJet General for Navy Seal use. It has been salvage non operating with missing parts. for years and it probably more of a collector or decorator item needing at least refurbishment or cosmetics. It is about 20 feet long and is pretty heavy Local pickup in central Indiana. sold in “as is where is” condition. Questions call xxx-yyy-zzzz. The black and white photos are from a rare book about seals.

Unmistakably the same craft.

Unmistakably the same craft.

One gets the impression that no naval architect or hydrodynamicist was let within many miles of this design effort. The sources of the instability seem obvious. It looks like the interesting interior fitments are gone, and it looks like there may have been some kind of thrusters on fins or dive planes forward of the doors.

SDV Mk2 03It’s pickup heritage doesn’t seem too occult in these pictures. How it got to Indiana is an interesting question — the SDV program remains today very sensitive, very close hold, and the Navy has not been above doing research in the desert, hundreds of miles from the sea. Maybe it passed through NAVSEA Crane?

SDV Mk2The seller has since withdrawn this old UDT bus from the eBay sale — perhaps a museum has expressed interest.

SDV Mk2 02


If some Dr Evil has visions of deploying the SDV Mark 2 in the sea again, all we can say is, good luck with that. The US Navy never got this thing going, and they have more money than God. You can’t spend your way around faulty design.

Of course, as this guy in Indiana shows, you can display it on your lawn.