Who is Psycho Loco (a.k.a. Juan Julio Sanchez) from The White Boy Shuffle and what is their importance?

Gunnar has heard of Psycho Loco long before he ever meets him, but unlike many who have inflated reputations, Psycho Loco's reputation for violence is well deserved. Gunnar encounters Psycho Loco while Gunnar is walking home one afternoon and, for some reason, Psycho Loco takes an instant liking to Gunnar. That affinity becomes a life-long friendship.