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Everybody. Peter Zion, here it is the 22nd of September here in Colorado. Well, I guess not just in Colorado. Anyway. The news today is in Sinaloa state in northern Mexico. There have been at least 100 murders and a whole bunch of abductions. As the Sinaloa Cartel is basically devolving into civil war. Now, the Sinaloa Cartel is rather unique among organized crime groups, and that it’s not simply about power or money. It’s run as a business. There is a guy by the name of El Chapo who used to run the place, and he basically would bring together all his chapter leads and have them compare best practices, figure out how they could run drugs to the United States with less friction, with less disruption to local law enforcement and local populations. Basically, the concept is, you don’t shit where you sleep. You try to have as good of relations as possible with the people where you’re operating, so that they don’t turn on you, and specifically, don’t go to governments in order to root you out. And this allowed Sinaloa to become the largest organized crime group in Mexico. By far. However, they were so successful that the United States made El Chapo public enemy number one, and eventually, the United States was able to capture and extradite him, and he is now serving multiple life sentences in the American prison system where he will never see the light of day again. That has left his organization in other hands that are not as competent as he was. El Chapo was very, very good with people and his underlings. I don’t mean to suggest he wasn’t a murderous thug, because he was, but he was a murderous thug with a business degree and a little bit of managerial experience. Since then, the various factions that he used to be in charge if it started to go their own way. And this really got ugly back in July when a guy by the name of Ismail zambara, also known as El mayo, basically used to be the accountant, has taken over most of the operations the guys in his 70s. Anyway, he was convinced by one of El Chapo sons to get on a plane and fly to Texas to look at opportunity. And the second that they landed,
American law enforcement was waiting for him, and they arrested him. It looks like the Son basically turned coat and turned over the leader of the cartel, well, los tupitos, because there’s more than one of those sons all control or own faction of the organization, and now that El mile is out of the equation, they are fighting among themselves over his share. Now, cartels are not monolithic entities, and not just at the top, especially in a place like Mexico where internal transport is a little wonky and difficult, you instead have several dozen groups, mostly locally defined, where local groups might use even a different name and have a different organizational structure and only give lip service to the center. Basically, it’s like Canadian politics, but a lot less polite. And in that sort of system, as long as you have a strong ruler who has a light slash firm hand and is really good with his words, this can work and it can hold together, but when that person is in prison, and then his deputy is in prison, and then his kids start fighting over what’s left, it doesn’t work so well. So here we have the largest organized crime group in Mexico that is in a state of breakdown, and Sinaloa is the heart of the organization. So right at the top, we’re seeing these splits. What we’re going to see over the next few weeks, unfortunately, is an expansion of this violence, not just beyond Sinaloa and into the rest of Mexico, where all these local chapters are likely to start going their own way, thinking their own things, and then, of course, the folks at the center who think they control those branches acting out violently to try to maintain control, but also north of the border. El chapos approach to drug running as a business didn’t simply make it the largest drug running group in Mexico. It made us the largest organized crime group on the planet, including in the United States. So now that the top leadership is at each other’s throats, we’re going to see the same thing north of the border that we’re seeing south with the local distribution and retail operations of Sinaloa, which in many cases are local gangs going their own way and resisting the ability of any of the leadership factions in Sinaloa to control them. So this is going to result in higher drug prices as we have interruptions to the distribution system, but more violence as we see breakdowns in the organization at the regional and local levels. Whether that’s good or bad, I’m not sure.
