A Slice Of The Vig And Small Things

[unhappycamper]

Ever wondered how these guys keep making money?

Let's talk about the vig first.

Today's bloomberg.com had an article, "Visa, MasterCard to Raise Fees on Small Buys." Two paragraphs in this article jumped out at me:

MasterCard will impose the highest fees permitted on all debit transactions, including so-called small-ticket purchases, for cards issued by the biggest U.S. banks, said a person with direct knowledge of the matter. Visa will do the same, Thomas McCrohan, an analyst at Janney Montgomery Scott LLC, wrote in a Sept. 21 note, without saying how he got the information.

The networks, which pass the fees to lenders such as JPMorgan Chase & Co. (JPM) and Citigroup Inc., now charge retailers 1.55 percent of the purchase price plus 4 cents for small-ticket transactions of less than $15. That comes to about 7 cents for a $2 cup of coffee. The cost to merchants for that item would more than triple under rules created by the Federal Reserve, which capped the fees at 21 cents, plus 5 basis points of the total and a conditional 1 cent for fraud-prevention..

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27% vig seems to be a bit much.


On to small things.

On September 10^th stripes.com had a article. "Officials investigating missing ammunition at Fort Bragg":

Military police are investigating the disappearance of nearly 14,000 rounds of ammunition from an Army base in North Carolina, the Associated Press reported.


That same day rawstory.com had an article, "Two soldiers detained over missing Ft. Bragg ammunition":

WILMINGTON, N.C (Reuters) - Two male soldiers have been taken into custody at Fort Bragg, North Carolina in connection with the disappearance of roughly 14,000 rounds of ammunition reported missing at the Army base on Wednesday morning, officials said on Saturday.

Military police would not release the names or ranks of the soldiers in custody.

The missing 5.56 millimeter ammunition is valued at about $3,600 and "can be purchased at any Wal-Mart," according to an official familiar with the investigation who spoke to Reuters only on condition of anonymity.

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No big deal, right? It's only $3,600.00.



As usual, there's a bit more to the story.

$3,600 / 14,000 = $0.257 per round. That's one of these:




$0.257


A military case of 5.56mm ammo contains 1,680 rounds packed in two M2A1 canisters.




5.56mm ammo packaged in two M2A1 cans with wirebound crate, 1680 rounds total. ($431.76)


In my day, M16A1s (1^st tour) and M16A3s (2^nd tour) had twenty round clips. It was not unusual to blow off 300 ~ 500 rounds during a firefight or a ground attack.

Twenty five point seven cents per round isn't all that much you say.

That's semi-true until you factor in the cost of shipping this stuff to the sandbox. We know that gasoline in Afghanistan is around $400 dollars a gallon, delivered, which is a markup of around 1,000%. Do we pay that same 1,000% markup to get ammo in there also? 500%? More? Less? Does anyone at the DoD know? Do they care?


There's a reason we are spending a billion fucking dollars every three days in the sandbox.