Gun dealers experiencing shortages of bullets

Selling bullets may be the most secure job in Florida as long as supplies last.

After months of heavy buying, gun dealers across the state are experiencing shortages.

Some say it began with the election of President Barack Obama. Others say it's about the economic downturn or fear of crime. Whatever the reasons, ammunition has been selling like plywood and bottled water in the days before a hurricane.

"The survivalist in all of us comes out," said John Ritz, manager of East Orange Shooting Sports in Winter Park. "It's more about protecting what you have."

Demand for bullets is so strong that suppliers are restricting deliveries.

"Where we used to get 20 to 30 cases [in a shipment], we may get two to three cases now," said Vic Grechniw of Florida Ammo Traders in Tampa. "The supply just isn't there. . . . Everybody is pretty much rushing out to get their hands on whatever they can."

Most in demand is handgun ammunition, including 9 mm and .45-caliber for semiautomatic pistols and .38-caliber for revolvers. Clerks at local Walmart stores, including Apopka and Kissimmee, say those sizes, along with .22-caliber, are on back order at the chain's warehouses.

American gun owners buy about 7 billion rounds of ammunition yearly, according to the National Rifle Association. It has been warning its several million members that Obama favors raising taxes on bullets to make them prohibitively expensive.

"Anecdotal evidence certainly suggests that the demand for ammunition is continuing to increase, and that is certainly attributable to gun owners' concerns with the current administration," said Ted Novin, a spokesman for the National Shooting Sports Foundation, a trade association representing 4,700 members.

The scarcity of bullets piggybacked on more widely publicized sales of assault rifles.

"Everybody kind of got caught with their pants down," Larry Anderson, manager of Shoot Straight in Apopka, said about the demand for bullets, which surprised even longtime gun dealers.

Each day he spends one to two hours on the phone talking to suppliers to buy ammunition for Shoot Straight's store and shooting ranges in Apopka, Casselberry and Tampa.

"We're fortunate with the buying power we've got and the connections we've got," Anderson said.

Despite being able to buy 100,000 rounds at a time, Shoot Straight can't find any copper-jacketed bullets for .380-caliber pistols, popular as concealed weapons. The shops have adequate supplies of other calibers.

"You've got to beat the bushes and take deals," Anderson said. "Now I take whatever I can get instead of being finicky."

National chains are seeing the same increased levels of customers buying guns and ammunition in recent months, said Larry L. Whiteley, a spokesman for Bass Pro Shops.

"Why, we don't know," he said.

One major regional manufacturer, Georgia Arms, has seen bullet sales jump 100 percent since the November election.

"People are just stockpiling," said company spokeswoman Judy Shipley. "A gun is just like a car. If you can't get gas, you can't use it."

Georgia Arms sells more than 100 types of ammunition for handguns, shotguns and rifles at gun shows from South Florida as far north as Virginia. It now cautions online buyers, "Attention: Due to a huge increase in demand, our shipping times have been delayed 5-7 weeks on most orders. Please be patient with us and know we will fill your orders ASAP."

Demand has been so strong for all things gun that the Oak Ridge Gun Range south of Orlando is moving to a new, larger range in three weeks.

"It used to be you'd order bullets and get them in the next day. Now it can take a couple of months," said owner John Harvey, who has seen demand for state concealed-weapons classes increase 300 percent since the election.

"I haven't been able to get any smaller concealed guns that I'd recommend come in in two months," Harvey said. "Basically, Smith & Wesson is out of Smith & Wesson."

The latest surge is pushing already high costs still higher.

"It was going up long before the political thing got started," Drew Huy, owner since 1981 of Ammo Attic in Melbourne, said of prices that have increased as much as 40 percent in recent years.

He and other dealers, including Ritz, attributed rising costs to shortages of brass, copper and lead brought on by the industrial consumption in India and China. In addition, rising fuel prices dramatically increased shipping costs for ammunition, heavy by nature.

"I'm spending a lot more on it now [to buy it] than I was selling it for two years ago," Ritz said. At his shop in Winter Park he has seen the cost of bullets rise as much as 10 percent every three months for the past two years.

Suppliers to law-enforcement agencies are doing better than retail shops.

"We're in good shape," said Tom Falone of Florida Bullet in Clearwater, who sells Federal and Spear brand ammunition to police departments and sheriff's offices. The only slight problem has been obtaining .40-caliber bullets, and those are delivered within 30 days.

"I called about .22 [bullets] the other day, and they had 12 million rounds in the warehouse."

Ailing Banks May Require More Aid to Keep Solvent

Some of the nation’s large banks, according to economists and other finance experts, are like dead men walking.

Multimedia

Graphic

A Breakdown of Bank Losses

A sober assessment of the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets, they say. The banks, in their view, are insolvent.

None of the experts’ research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are federally insured. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.

But without a cure for the problem of bad assets, the credit crisis that is dragging down the economy will linger, as banks cannot resume the ample lending needed to restart the wheels of commerce. The answer, say the economists and experts, is a larger, more direct government role than in the Treasury Department’s plan outlined this week.

The Treasury program leans heavily on a sketchy public-private investment fund to buy up the troubled mortgage-backed securities held by the banks. Instead, the experts say, the government needs to plunge in, weed out the weakest banks, pour capital into the surviving banks and sell off the bad assets.

It is the basic blueprint that has proved successful, they say, in resolving major financial crises in recent years.

Japan endured a lost decade of economic stagnation in the 1990s before it adopted such measures from 2001 to 2003.

The Swedish government took tough steps in 1992 and Washington did so in 1987 to 1989 to overcome the savings and loan crisis.

“The historical record shows that you have to do it eventually,” said Adam S. Posen, a senior fellow at the Peterson Institute for International Economics. “Putting it off only brings more troubles and higher costs in the long run.”

Of course, the Obama administration’s stimulus plan could help to spur economic recovery in a timely manner and the value of the banks’ assets could begin to rise.

Absent that, the prescription would not be easy or cheap. Estimates of the capital injection needed in the United States range to $1 trillion and beyond. By contrast, the commitment of taxpayer money is the $350 billion remaining in the financial bailout approved by Congress last fall.

Meanwhile, the loss estimates keep mounting.

Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, has been both pessimistic and prescient about the gathering credit problems. In a new report, Mr. Roubini estimates that total losses on loans by American financial firms and the fall in the market value of the assets they hold will reach $3.6 trillion, up from his previous estimate of $2 trillion.

Of the total, he calculates that American banks face half that risk, or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad.

“The United States banking system is effectively insolvent,” Mr. Roubini said.

For its part, the banking industry bridles at such broad-brush analysis. The industry defines solvency bank by bank, and uses the value of a bank’s assets as they are carried on its books rather than the market prices calculated by economists.

“Our analysis shows that the banks have varying degrees of solvency and does not reveal that any institution is insolvent,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, a trade group whose members include the largest banks.

Edward L. Yingling, president of the American Bankers Association, called claims of technical insolvency “speculation by people who have no specific knowledge of bank assets.”

Mr. Roubini’s numbers may be the highest, but many others share his rising sense of alarm. Simon Johnson, a former chief economist at the International Monetary Fund, estimates that the United States banks have a capital shortage of $500 billion. “In a more severe recession, it will take $1 trillion or so to properly capitalize the banks,” said Mr. Johnson, an economist at the Massachusetts Institute of Technology.

At the end of January, the I.M.F. raised its estimate of the potential losses from loans and other credit securities originated in the United States to $2.2 trillion, up from $1.4 trillion last October. Over the next two years, the I.M.F. estimated, United States and European banks would need at least $500 billion in new capital, a figure more conservative than those of many economists.

Still, these numbers are all based on estimates of the value of complex mortgage-backed securities in a very uncertain economy. “At this moment, the liabilities they have far exceed their assets,” said Mr. Posen of the Peterson institute. “They are insolvent.”

Yet, as Mr. Posen and other economists note, there are crucial issues of timing and market psychology that surround the discussion of bank solvency. If one assumes that current conditions reflect a temporary panic, then the value of the banks’ distressed assets could well recover over time. If not, many banks may be permanently impaired.

“We won’t know what the losses are on these mortgage-backed securities, and we won’t until the housing market stabilizes,” said Richard Portes, an economist at the London Business School.

Raghuram G. Rajan, a professor of finance and an economist at the University of Chicago graduate business school, draws the distinction between “liquidation values” and those of calmer times, or “going concern values.” In a troubled time for banks, Mr. Rajan said, analysts are constantly scrutinizing current and potential losses at the banks, but that is not the norm.

“If they had to sell these securities today, the losses would be far beyond their capital at this point,” he said. “But if the prices of these assets will recover over the next year or so, if they don’t have to sell at distress prices, the banks could have a new lease on life by giving them some time.”

That sort of breathing room is known as regulatory forbearance, essentially a bet by regulators that time will help heal banking troubles. It has worked before.

In the 1980s, during the height of the Latin American debt crisis, the total risk to the nine money-center banks in New York was estimated at more than three times the capital of those banks. The regulators, analysts say, did not force the banks to value those loans at the fire-sale prices of the moment, helping to avert a disaster in the banking system.

In the current crisis, experts warn, banks need to get rid of bad assets quickly. The Treasury’s public-private investment fund is an effort to do that.

But many economists and other finance experts say that the government may soon have to take on troubled assets itself to resolve the credit crisis. Then, they say, the government could wait for the economy to improve.

Initially, that would put more taxpayer money on the line, but in the end it might reduce overall losses. That is what happened during the savings and loan crisis, when the troubled assets, mostly real estate, were seized by the Resolution Trust Corporation, a government-owned asset management company, and sold over a few years.

The eventual losses, an estimated $130 billion, were far less than if the assets had been sold immediately.

“The taxpayer money would be used to acquire assets, and behind most of those securities are mortgages, houses, and we know they are not worthless,” Mr. Portes said.

There Goes your Retirement

With their finances in shambles, many in the 60-plus crowd are looking for jobs. Here's how some are finding work -- and adjusting to new lives.

By KELLY GREENE

The advice in recent months -- from financial planners, economists and educators -- has been unvarying: Retirees whose nest eggs have cracked wide open should go out and find a job.

Easier said than done.

Across the country, retirees who never imagined themselves returning to the workplace are polishing résumés and knocking on employers' doors. The problem: Most are running smack into the worst job market in almost three decades. Nearly 5% of workers age 55 and older were unemployed in December, a 58% jump from a year earlier and the highest percentage since 1983, according to the Bureau of Labor Statistics.

Of course, the idea of "working in retirement" isn't new. In the past decade, many older Americans have started businesses or sought out part-time employment -- sometimes to help with household budgets, but frequently to follow long-deferred dreams. Today, though, with retirement savings in shambles and the economy in turmoil, job searches have taken on a new sense of urgency -- and, in some cases, desperation.

"That's all people talk about...[that] they have to go back to work," says Dan Sweeney, 62 years old, a former court officer who lives in the Villages, a large retirement community in central Florida. Mr. Sweeney has been working part time as a ranger at a local golf course, where he drives around in a cart making sure the pace of play is what it should be, handing out water and generally helping golfers. Last month, he started doing direct-marketing work at home, too, but he's also looking for a job with better pay.

Meanwhile, a neighbor -- who had invested his nest egg with Bernard L. Madoff, the New York financier accused of running a giant Ponzi scheme -- is trying to land work similar to Mr. Sweeney's. "He lost his life savings, and he was applying for [a] little golf-course job," Mr. Sweeney says.

Despite sizable hurdles, some retirees are finding work. How did they land those jobs, the first that some had applied for in several decades? What are the best and worst parts of their newfound employment? We spoke with dozens of older adults who had retired -- but who returned to work during the past year as the recession deepened. Here are several of their stories:

U.S. military report warns 'sudden collapse' of Mexico is possible

EL PASO - Mexico is one of two countries that "bear consideration for a rapid and sudden collapse," according to a report by the U.S. Joint Forces Command on worldwide security threats.

The command's "Joint Operating Environment (JOE 2008)" report, which contains projections of global threats and potential next wars, puts Pakistan on the same level as Mexico. "In terms of worse-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico.

"The Mexican possibility may seem less likely, but the government, its politicians, police and judicial infrastructure are all under sustained assault and press by criminal gangs and drug cartels. How that internal conflict turns out over the next several years will have a major impact on the stability of the Mexican state. Any descent by Mexico into chaos would demand an American response based on the serious implications for homeland security alone."

The U.S. Joint Forces Command, based in Norfolk, Va., is one of the Defense Departments combat commands that includes members of the different military service branches, active and reserves, as well as civilian and contract employees. One of its key roles is to help transform the U.S. military's capabilities.

In the foreword, Marine Gen. J.N. Mattis, the USJFC commander, said "Predictions about the future are always risky ... Regardless, if we do not try to forecast the future, there is no doubt that we will be caught off guard as we strive to protect this experiment in democracy that we call America."

The report is one in a series focusing on Mexico's internal security problems, mostly stemming from drug violence and drug corruption. In recent weeks, the Department of Homeland Security and former U.S. drug czar Barry McCaffrey issued similar alerts about Mexico.

Despite such reports, El Pasoan Veronica Callaghan, a border business leader, said she keeps running into people in the region who "are in denial about what is happening in Mexico."

Last week, Mexican President Felipe Calderon instructed his embassy and consular officials to promote a positive image of Mexico.

The U.S. military report, which also analyzed economic situations in other countries, also noted that China has increased its influence in places where oil fields are present.

Job cuts swell ranks of homeless in Japan

In corporate Japan, losing your job can mean losing your home as well.

As major companies cut their work forces in the economic downturn, many Japanese workers are finding themselves out on the street because they have to move out of company-run dormitories.

Sadanori Suzuki was one of them.

The 26-year-old lost his job at a car factory in December, and by mid-January he was kicked out of the dorm run by his employer. He moved from Internet cafes — which often have private rooms and double as flop houses — to "capsule" hotels, which are coffin-like individual compartments just for sleeping. But within two weeks he was nearly broke and out on the street.

He found his way to a Shinto shrine in Kawagoe, a Tokyo suburb, where he planned to take temporary refuge. But the worship hall was locked. Exasperated, Suzuki set fire on the shrine, then called police from a nearby pay phone and turned himself in. When he was arrested, last week, he had only 10 yen (11 cents).

In a country where lifetime employment has long been held up as an idealized standard, Japanese are finding out fast that the unemployment safety net for part-time, temporary or contract workers has become painfully obsolete.

"In Japan, people quite often become homeless as soon as they lose their jobs," said Makoto Yuasa, head of Independent Life Support Center, a grass-roots activist group. "There is no protection for people who are able to work but are out of jobs."

On Monday, the government reported that the Japanese economy shrank at its fastest rate in 35 years in the fourth quarter — at an annual pace of 12.7 percent — and shows no signs of reversing course anytime soon. It is more than triple the 3.8 percent annualized contraction in the U.S. in the same quarter.

According to the latest government estimates, released last month, some 125,000 part-time workers will lose their jobs by March. Labor officials cannot follow what happens to all those who lose their employment, but of the 45,800 who have been tracked, the government found 2,700 became homeless.

Private estimates go much higher — to upward of 400,000 new jobless by the end of next month — and say more than 30,000 of them will become homeless, nearly double the country's nationwide homelessness figure. By the official count, the number of homeless is 16,000 and has been slightly decreasing for several years.

"This is just the beginning," said Hitoshi Ichikawa, a ministry official in charge of labor policies. "There will be many more in coming weeks and months."

The wide use of temps in manufacturing was only legalized in 2004, allowing corporate giants such as Toyota Motor Corp. and Canon Inc. to rely on seasonal workers. Using temporary workers allows companies to adjust production to gyrating overseas demand through hiring agencies that often provide dormitories.

Nearly one-third of the Japanese work force is made up of temporary workers, including 3.8 million bottom-tier workers who are sent countrywide to provide labor on demand.

A key to Japan's fragile economic recovery has been the explosion in temporary employment agencies, brokers who allow corporations to take on labor without having to pay benefits — and then unload workers at will. Another factor is "freeters" — a growing segment of young people who choose to move from one part-time job to the next.

Independent union organizer Makoto Kawazoe said temporary workers are given low-paying, tough factory jobs, with an average basic monthly salary of about 150,000 yen ($1,650), barely enough to make ends meet. When they are laid off and evicted from employer-provided housing, they often have no savings. Three-quarters of Japan's temporary workers earn less than 2 million yen ($21,740) a year.

"They have no choice but rely on their job agencies to find another job that comes with a dormitory," Kawazoe said. "Once you get trapped in the cycle, it's very difficult to get out."

The job-with-a-room package allows job agencies to supply workers who can start the job right away, without wasting time finding a place to live, Kawazoe said. "It's a scheme to attract the poor to take the low-paying, hard labor and keep them in the system."

Japan's unemployment rate jumped in December to 4.4 percent, up 0.5 points from a month earlier. That means 2.7 million people are out of jobs, up 390,000 from the previous year. The number of people on government welfare has risen by more than 46,000 since last year. In Tokyo and major cities across the country, welfare rolls rose 35 percent in January alone.

On the streets, the statistics are becoming a visible reality.

The government-run Hello Work job agencies are packed with young jobseekers, many carrying duffel or shopping bags with their belongings. They apply for a one-time 100,000 yen ($1,090) allowance and low-rent housing, which opposition lawmakers and advocacy groups say is far too little.

In a parliamentary debate last week, Economy Minister Kaoru Yosano urged companies to do more to protect their workers.

"Major companies have a social responsibility to sustain their work force," he said. "They are useless if they ignore that responsibility."

But Prime Minister Taro Aso — who has promised to create 1.6 million jobs over the next three years — said the government has put in place programs such as housing loans and subsidies to companies to maintain their work forces.

"We have provided support for those who have lost both jobs and homes, and we'll continue to take appropriate steps," he told a parliamentary session Monday.

Even so, the situation has gotten so bad that some Tokyo neighborhood offices have set up temporary showers for those who need to clean up before resuming their job search.

Over the New Year holidays, a tent village set up by a group of labor union members in Tokyo's Hibiya Park was almost instantly filled, prompting the Labor Ministry to open a nearby public gymnasium to accommodate the overflow. Hundreds came from out of town when word got around. The government later made available vacant public housing for 4,000 people in several locations in Tokyo through a relief package of financial aid and rent.

Companies say they are also working to respond. Toyota has announced it will slash its temporary workers by 1,700 through March — from 4,700 — by not extending their contracts. But it has promised to shift some to full-time positions or transfer them to subsidiaries or affiliates.

"We are doing the best we can," a Toyota spokesman said on condition of anonymity, because of the sensitivity of the topic.

From December, Toyota has also started allowing temporary workers to stay at company-run dormitories for up to a month without charge.

Before that, a temp worker had only three days to pack up and leave.

Guardian: Irish Government Faces Growing Fears of National Debt Default

Fears are growing that Ireland could default on its national debt after the

cost to insure against possible losses on loans to the country rose to

record highs at the end of last week. Credit ratings agency Moody's

recently followed rival Standard & Poor's in warning it might downgrade

Irish debt, amid fears that one of Europe's former success stories is falling

into a deepening recession. The cost to hedge against losses on Irish debt

tripled last week to a record 355 basis points - meaning t for every £100 of

debt, investors have to pay £3.55 to insure against default, according to

data firm CMA Datavision. It was about 262 basis points at the end of

January. Moody's has warned there is a more than fifty percent chance

Ireland will lose its triple A rating within 12 to 18 months . . .

Hurting on the High Street

Store closures, layoffs, and bankruptcies among British retailers underscore the seriousness of the economic downturn.

If 2008 was the year financial services melted down in Britain, 2009 is shaping up as retail's moment to implode. The once-booming retail sector -- known in Britain as the High Street -- is reeling as weak consumer confidence, tight credit, and rising unemployment throttle sales and profits.

The list of victims is eye-popping. Upscale clothing and food seller Marks & Spencer said Jan. 8 that its fourth-quarter sales fell 7.1 percent, and announced plans to close 27 outlets and lay off 1,230 workers. Woolworths, which failed to find a white knight last year as it wobbled toward insolvency, closed the last of its 807 British outlets on Jan. 6, putting 27,000 employees out of work. And music emporium Zavvi, originally owned by Richard Branson, has called in the administrators and closed 22 of its 114 outlets as management struggles to sell the business.

Retail's Drag on Broader Economy

All told, says insolvency and restructuring consultancy Begbies Traynor, nearly 2,000 retailers already are in bankruptcy proceedings in Britain. The carnage is likely to get worse. By yearend, predicts credit researcher Experian, some 135,000 storefronts -- one in seven across Britain -- may be vacant. And up to 135,000 retail workers could lose their jobs by the end of 2009, says the London-based Center for Economics & Business Research. "There definitely are tough times ahead," says Jonathan De Mello, director of Experian's retail consultancy.

The implications for the broader economy are worrisome. Consumer spending accounts for 65 percent of British gross domestic product, and retail is the third-largest source of employment behind business services and health care. A High Street slowdown thus translates quickly into sharply lower economic performance, declining tax revenues, and higher spending on jobless benefits. Economists figure Britain's GDP contracted 1.2 percent in the fourth quarter of 2008, after falling 0.6 percent in the previous quarter. Brokerage Morgan Stanley now predicts Britain's overall GDP will shrink 1.1 percent in 2009.

Even before the most recent spurt of retail layoffs, Britain's unemployment rate already had jumped almost one percentage point annually, to 6 percent, as of October, according to the Office for National Statistics. The last time joblessness was that high was in the first half of 1999. Now, with retailing expected to remain in the doldrums until 2010 at the earliest, Morgan Stanley figures unemployment could hit 7.4 percent this year. Other, more pessimistic estimates range up to 9 percent.

Government Intervention

So far, government efforts to help the retail sector haven't made much difference. To spur spending, the government trimmed Britain's value-added tax (VAT) before Christmas as part of an overall stimulus package. Most analysts say the modest cut was too little, too late. Likewise, the Jan. 8 decision by the Bank of England to chop interest rates to a record low of 1.5 percent may not do much to ease credit or kick-start consumer spending. Prime Minister Gordon Brown is now rumored to be mulling a new round of tax cuts to goose the economy.

Until stimulus sets in, retailers are left scrambling to save themselves. Over the Christmas holidays, some offered discounts of up to 90 percent to woo shoppers. That brought short-term relief for a few: Upmarket department store Selfridges, for instance, recorded the most profitable hour in its 100-year history on Dec. 26 as customers snatched up luxury brands like Louis Vuitton and Burberry for knocked-down prices.

More Carnage to Come

But slashing prices cuts both ways. "All the discounting has done is squeezed margins," says Tarlok Teji, head of British retail at consultancy Deloitte. He reckons that sales promotions will help keep like-for-like sales broadly flat over the first half of this year, but cautions that discounting will hit profits. Margins will likely fall 30 to 40 percent in 2009, and demand for big-budget items such as flat-screen televisions and home furnishings will remain weak even despite price cuts.

"More retailers will enter administration in February and March," Teji says. "Companies will have to batten down the hatches until the economy starts to recover."