As you’ll hear at the start of this week’s podcast Warren Buffet isn’t a big fan of private equity firms. He says they lie, so they are not a good choice for investors, like pension funds, for example. But they are even worse for the companies being acquired by private equity funds. Morrisons is an example. A successful supermarket chain with a long, distinguished history, acquired by a US private equity fund, who bought out shareholders. Then, in true private equity fashion, employers are told that there will have to be savings made to cover the debt – the debt that was created by paying out shareholders for the acquisition. How is that fair on anybody, except the executives of the equity fund who benefit from the increasing equity in their portfolio, which they can enjoy at lower tax rates than a business out to make a profit. Is that how capitalism is supposed to work?
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Warren Buffet: But we have seen a number of proposals, from private equity funds where the returns are really not calculated in a manner that they're not calculated in a manner that I would regard as honest. And, so if I were running a pension fund, I would be very careful about what was being, offered to me.
Phil Dobbie: So Warren Buffett is not a big fan of private equity firms, in particular. The way they borrow so much against the assets that they are borrowing. He thinks they don't provide a good return for investors. Well, for the people who worked in Morrisons, they might think that it's not good for the companies that they're buying, either. So what are, ah, they good for? Well, equity funds, are good for the owners of equity funds. But is that it? Are they an underregulated part of the finance sector that has had it too good for too long, leaving a trail of destruction in their wake? That's what we look at this week on the debunking economics podcast with Steve Keane and Phil Dobbie. Welcome along. well, let me tell you about Morrison's, the supermarket chain. Actually, it's one of Britain's biggest supermarket chains. It's 124 years old. It was founded in Bradford by William Morrison in 1899, and it was all going well. It was passed down through the family, with Ken Morrison taking charge in 1950. He was actually working for the company from, when he was just five years old, helping to stack shelves and the like. So it grew up mainly in the north of England. They were quite innovative. They introduced the first self service checkout in 1962. In 1967, it listed on the London Stock Exchange. In 1999, they celebrated 100 years with the opening of their hundredth store. And they were one of the first supermarkets, really, to try and create the feel of a series of smaller stalls and small shops within one big supermarket through having different deli counters and all that sort of stuff. The other thing they did was they maintained the same price from store to store, whereas all the other supermarkets were charging different prices depending on the wealth of the area. It didn't matter where you lived. With Morrison's, it was the same everywhere, so all was going well. It was making healthy profits. when Sir Ken Morrison bowed out in 2012, it was making a profit of 612,000,000 pounds, which is about 840,000,000 in today's money. Shares had skyrocketed. 325 pounds. Go back to 1985. They were worth about ten. But then things changed. they bought now out of the hands of the family, they bought Safeways for about 3 billion pounds. In 2004, another supermarket, chain, it didn't go well. Shares went down to 160 pounds, making them ripe for takeover. That took a while, but in 2021, shareholders agreed to sell out to a us private equity fund, Clayton, Dublia and Rice, for 7 billion pounds. The problem is, the private equity fund borrowed the money to fund the purchase, and using obviously the equity of the business, to support, that loan. And they were caught out by interest rates. Think of the timing, this is 2021. so presumably it had all been written into the balance sheet of the business. So now, Steve, they are making cuts. Morrisons is struggling. I mean, it's a travesty. How could this sort of thing be allowed to happen?
Steve Keen: Well, it happens all the time. A lot of these private equity firms actually work on quite rapacious terms. They will, as you say, borrow the money to do a takeover. They asset strip the company. In the meantime, they pay themselves fees, out of the borrowed money quite frequently, and then the company collapses afterwards. But they've done a hit and run. And the promise always is that the private equity will find areas of inefficiency and get rid of those and make the company quite functional. I know of one case where that happened, and I'm quite happy to talk about it, involves my good friend Richard. Vague we have to have on the show one of these days, because Richard actually did do his own private equity takeover, at the bank he was working for at the time, did do exactly what they normally say they're going to do, did, turned around and created quite a profitable business out of it. but the norm is quite frequently, asset stripping. And you remember the old movie, pretty woman?
Phil Dobbie: Of course, yeah.
Steve Keen: With Richard, that's the basis of it. He was a private equity man. And what they do is they find an underdeveloped asset, in that case that was talking about shorefront, industrial, estate on a river somewhere in, I think it was in Chicago, may have got the town wrong, and they then buy it up and sell it for something completely different and shut down the industry. And it may not be intentional in this case of Morris, that that's been the outcome, because interest rates caught them a cropper. But this is asset stripping seems to be the name of the game.
Phil Dobbie: Yeah, absolutely. That was a movie about screwing people over, in both senses of the word, wasn't it, really?
Steve Keen: Indeed. One being more enjoyable than the other.
Phil Dobbie: I think is. This is textbook stuff, I think, isn't it, with morrisons? So they're now at that asset stripping stage in that, they have appointed a new, CEO. Just, and I'm trying to find his name. Rami batia, I think is their new boss. He says there's going to need to be big changes to cover the billions of pounds in debt in order to survive. But of course, what they're not saying.
Steve Keen: Is the debt didn't exist. Exactly.
Phil Dobbie: So what's happened is, in fact, money has been given to shareholders. The debt has been created basically by paying off shareholders. And now the workers are facing cuts because of it. There was a story about one, it was in the, actually the mail online, which is something I don't normally read, but they've picked up on this story. one employee had a 35 hours week reduced to twelve. So her income has basically been reduced by 800 pounds per month, because of this debt, which is basically just paying off the shareholders.
Steve Keen: Yeah. And neoclassical economic theory plays a major role in encouraging us because one of the most famous theorems in economics called the medicliani Miller theorem, after the two jerks who came up with it, they got the Nobel prize, which is why I can formally call them jerks. they argued that it didn't matter how a company was funded, the level of debt had no impact upon the company's valuation. And their logic was that because, a shareholder with no debt could buy the shares, or a person, and the company could itself be highly levered, or a person, with lots of debt could buy the company's shares and the company could be not leave it at all. And the outcome is much the same. So it didn't matter how you financed it. And then the next step of their logic was to say that since interest payments are deductible off profits, whereas, dividend payments are not, where there is tax on income, the advisable level of debt for a company was 100%. Now, probably slightly caricatured the article, but it's a caricature itself, so I'm not going to apologize for that. But what it meant was you had a economic theory arguing in favor of loss of debt and that was exactly what the finance sector wanted to hear.
Phil Dobbie: Well, exactly. I mean, these companies aren't turning profits, are they? They're making a loss, but they are still managing to make, equity payments, to the people operating it. even if they were making a profit, they are making their money by net capital. Gains on the private equity rather than ordinary income. So they're getting their money out of capital gains. So the capital gains in the UK peaks at 28%, income tax peaks at 45%. So you can do all sorts of dodgy stuff by evading tax, and that's just the tax that stays in the country. This is a US private, equity fund, of course. So you'd assume that, should, they be making a profit. And of course, they've written off a massive loss against, Morrisons. So Morrisons isn't going to be paying any tax now to the UK government. Ah. Any profit that is being made is being made by the group as a whole in the United States. But a lot of that will, be payments in, capital gains rather than in straight income tax.
Steve Keen: Yeah, I mean, this is another con job which has happened globally to minefield. Yeah. I mean, like Australia. Same thing. You might remember under the Howard government, they halved the rate of capital gains. Now, the idea was it's supposed to lead more investment. What it actually was more speculation. you're better off to any income you generated. You're better to disguise that and call it capital gains. And you therefore halve the rate of tax you're paying. So there are so many tax loopholes that have been created in favor of capital gains, ostensibly because that leads to investment. And realistically, it led to speculation and the sort of asset stripping we're seeing here.
Phil Dobbie: So I'm sure the company would say, we're doing good work because we are providing a solid return for our clients. Their clients are pension funds, insurance companies, sovereign funds, stinking rich people. almost half of them are in North America. And they could be okay, you know, we could be making money for these people by investing in listed assets. I've heard this a few times from people saying listed assets. The stock exchange is becoming a bit risky lately. It's getting overvalued. It's too volatile for these funds. They could be putting money into bonds. Bonds have been very volatile. So there's a bit of a move now for non listed assets. So that could mean you buy into a share of a company of, a non listed company, or you just buy a company completely, which is what, obviously, these private equity funds are doing. So, I mean, I'm sure they would say, well, look, we are buying these companies to make a profit, so that we are giving a better return to the people who are on our books, our customers. What's wrong with that? If we are getting a better return for them than we would by just buying shares on the share market.
Steve Keen: Yeah. I mean, to me, one of the problems, apart from the fact that it ends up companies being very heavily levered, whereas before they didn't need to be levered because it was equity holders who provided the capital rather than banks lending the money to the, private equity firms that do the buyout. and the argument this is more discipline on the firm to make it behave better. But what you get is, as you said with the case of Morrisons, you had an entire family whose history was retailing, and you, get a takeover by people, which are derogatively called dean counters. And my experience with that came actually more from the computer industry than anywhere else. And I have a wonderful meeting with a guy who designed the database program. You might even remember, if you're old enough, dbase too. Do you remember dbase two?
Phil Dobbie: Yeah, I do.
Steve Keen: Okay. Well, Wayne Rattliff wrote dbase two, and Wayne. I interviewed Wayne when he came out to Australia promoting, a new fringe called Emerald Bay. And he just hopped off the plane, foaming at the mouth about mbas, which is a code word for people who, vulture capitalists taking over a firm who didn't care about the software being made. They simply wanted to make as much money as possible. And as well as taking over the financial running of the company, they also tried to tell them how to design a database program. And what you have was a company which used to be driven by engineers, was now driven by people who were worried about balance sheets and innovation went out the window. It was a case of what features can we add? So dbase two was partly called dbase two because it could handle two databases at once, and you'd flip between the two. I used to code in the damn thing, so I knew it very well. And Wayne wanted to bring in what was known as an entity relationship database structure, which is one of the most sophisticated structures you can have where you, what are called entities, what other people would call database tables. And the relationship was a link between the tables and in the entity relationship database, the relationships themselves would store data. Now, what that meant was if you designed a form which was supposed to say, companies, buying products off your shop, then the relationship with the buying relationship would actually, each link would contain, effectively, the rows in an invoice, and it made for a far more sophisticated data structure. But no, Wayne was told he couldn't do that. He had to just add more tables. So rather than having two tables to control they went to DeVos forge, had ten tables to control, and speaking as a user, it was simply impossible to keep in your mind which table you had open, which particular do while loop that table was running inside. so what would have been a highly sophisticated change to a better product was ruined by people who were focused more on the dollars they were earning. And guess what? Dbase ten four, I think it was called, failed in the marketplace. So what you get is, you undercut the innovation that enables a company to prosper, and that's because you've lost the link between the owner of the company and knowledge of what the company actually does.
Phil Dobbie: Yeah, exactly. And that is certainly the case with Morrisons, by the way. I love the way you take us off from these angles. Who would have thought, as we started today, that, ah, you'd start ranting about database structures. But I'm glad you did, because you make a point.
Steve Keen: I do it regularly.
Phil Dobbie: This has been an issue lately because in 2021, it was a big year for private equity firms offering to buy public companies. And the reason for that was because many of these private equity bidders that were sitting on large reserves of cash coming out of the pandemic, so their customers had money they wanted to invest, they'd run out of things to invest in. I've heard this a lot lately as well. They wanted to steer clear of conventional, instruments like bonds, so they were looking for where else to go. So there was this big market for acquisitions. And when it is nice, so you've got a bit of money coming from your customers, and then you've got this formula, you go, well, okay, we can take the assets. they're good value right now because a lot of things are undervalued. We're going to be financed 90% by debt. then it doesn't really matter what you're buying as far as they're concerned. you don't need expertise in that area. You can just make it work because the assets are there, you've got the 10%, 90% is going to come from debt. you're going to be able to satisfy shareholders very quickly. Job done.
Steve Keen: Yeah. And this is like the whole finance driven capitalism, rather than entrepreneur driven capitalism, which comes out of this. And this is one reason that I obviously think it's a stupid idea for a capitalist economy. And so did Keynes, because there's a wonderful, line, I think it's in the paper called the general theory of employment, when he said, when the development of an economy is driven by the activities of a casino, the job is likely to be all done. And this is one case of casino capitalism taking over. When you have people whose bottom, everything they know about is numbers. They don't know about engineering, they don't know about aircraft, they don't know about retail. They just know about getting numbers on a balance sheet. And as a result of that, they take the heart and soul out of these companies, when, in fact, what makes capitalism work is when it's driven by people who understand the heart and soul of the business they're in and are often it for the pleasure of the business as much as they are for the money. So, the whole idea that a ubiquitous bunch of, private equity firms can run real businesses better than the people who actually established them in the first place is a load of bollocks.
Phil Dobbie: And I guess they go after because I'm wondering how often these private equity deals are actually ever beneficial to the company they acquire. I suspect it's a very, very small percentage.
Steve Keen: That's when, Richard's case. Richard, I hope you're listening thing. I'm happy to have a bit of what you told me. Few forward to come along and correct me, but I think what you did is an example of what should happen in these cases. And it worked because you understood the business. So let's have a chat about that. Yeah.
Phil Dobbie: So a lot of the time it is just because the finance works. Now, of course, we've had in the past lots of cases of hostile takeovers where the, private equity fund has gone directly to the shareholders to make an offer, or they've gone to the shareholders to try and get someone on the board so that the takeover can get through, which is, of course, why private equity funds go after publicly listed companies. if you go to a company, a family run business, it's not going to work. For example, would they be able, to buy into Waitrose, and John Lewis, which are run not, as a family company, but they run as a cooperative. So supposedly the members are the people running in the business. It'd be very hard, I'd imagine, for a private equity fund to buy into that sort of structure because people wouldn't be interested, because they'd say, well, hang on a second. You want to buy us and make us lose our job? No, thanks indeed.
Steve Keen: And, that's why I think it's important to have people running a business who are actually aware of what the business does, rather than just aware of numbers on the balance sheet.
Phil Dobbie: All right, well, look how do we change, this is the regulation? Are there some policy changes that could be introduced that stop this sort of behavior? We'll explore that a little bit when we come back on the debunking economics podcast. Back in a second.
This is the debunking economics podcast with Steve Keane and Phil Dobbie. So we are looking at private equity, investors, and, are they going to destroy, Morrisons? Certainly. I'm sure Morrisons will be a lot smaller in a year's time than it was a, year ago or a year or two back. And that is because a private equity firm from the United States has bought into them. they've acquired a lot of debt in that purchase. And then they're saying, well, we've got to pay off that debt. The only way we're going to do that is by making the company more efficient, in other words, smaller. And, everyone is going to pay the price for that. Nobody wins in a situation like that. So, Steve, I wonder how we avoid this problem. So, Lord Sika, who is professor of accounting at the University of Sheffield, last year, he asked in the house of Lords what the impact of private equity firms is having on the british economy. His view, he said, was that the typical business model of private equity firms includes high leverage financial engineering, tax abuse, pension dumping, job losses and asset stripping. And he named firms that he considered to be the victims of this practice, including Debenhams and Toys r us. I wonder if he's going to be adding morrisons to that list. But he's got it in a nutshell there, hasn't he? That is the way they're operating.
Steve Keen: He's got it in a nutshell. Let's have a drink with that man one day. because that's exactly what I've seen out of this experience and seeing it happening over the last 50 years in various industries. It's observing most of the time. But what you have is people who don't know the business, taking over the business, and the only thing they know is dollars. And that's what they make the focus on. And they can make stupid decisions like the classic of all time, which didn't actually happen by, private equity takeover, but it happened as a company which was run by engineers, ended up being run by bean counters, was Boeing, and, it was with the seven three seven. They had a particular plane which was certified for flying, had been around for quite some time. Airbus came out with a plane they couldn't compete with in the mid range market. They decided to take a seven three seven and modify it, so that it would compete with the Airbus. But to avoid the need to certify it, they simply added software they didn't tell the pilots about. And we lost two or three plane loads of people courtesy of that. Used to be a company which was dominated by engineers who would never in a million years do something as stupid as that, for the Cs sake of being matching a competitor and not needing to get a certification again. the engineering caliber just declined to literally a deadly level. And that's why I think it's so important that when you have people running a company, it should be people who know something about the industry, not just a blanket load of money laden, leverage speculators to come in and take it over and say they're going to do a better job.
Phil Dobbie: Well, the response to Lord Sika is a view, which is held by the british private Equity and Venture Capital Association. I want to talk about the title of that organization in a second, because they seem like two very different things. But they say such transactions can, and that's the operative word, can help to boost uk jobs, increase management efficiency and support businesses to grow on the world stage. So they can do that. they don't, perhaps the reason they.
Steve Keen: Don'T say that, wouldn't they?
Phil Dobbie: Yeah, well they would say that, but the private equity and venture capital association. So private equity I see is the situation that we're seeing where companies are coming in and buying them supermarket chains, and riddling them with debt. Venture capital is a very different thing, isn't it's where you're putting in seed money to help a business grow. So one of them are leeches, one of them is providing opportunity. It's interesting you got an association that is supposedly covering off both.
Steve Keen: It goes both ways. I've read enough about venture capitalists not to have approached venture capitalists for my idea of Ravel. And that is because I've seen, had plenty of people warn me who've been involved in entrepreneurial activities that you'll get done by venture capitalists. The same way you might buy private equity, you get people who really couldn't care about what you're doing. That again, they're looking at the bean counting numbers, they don't care about the concepts you're putting forward and they try to take, because you are desperate for funds to try to get the thing developed in the first place, they get an inordinate share of the capital and then if they can then use that to sell you out, at some point they'll do so. So I've been advised by people very wary of going to a venture capitalist to get funding. so there's a sense in which this is all treated as if the people providing the capital are knowledgeable at everything and dispassionate about what they're doing. Neither are true. You can get some exceptions to that, but the reality in practice is people who don't know the business and therefore don't understand what they're doing when they take it over, can make changes which only work by cutting the quality of what they're doing and get away with it until something screws up. And my most recent example, not recent, it's been going for 15 years. But I've been using a program called Mathcad for my mathematical analysis, which I love and which I actually was. Not only did I resume regular touch with the developers, I spoke with them about, the software when I visited the states, and there are several variations of the program which go right back to my ideas about it as a person using mathematical tools. They were taken over by a computer aided design company, which at the time, I didn't think would be disastrous, but it has been disastrous. So they couldn't give a brass razoo about the mathematical side of things, and they basically abandoned their entire user base, redesigning it for the use of their user base in computer aided design. And it was a nightmare. And all the good people I knew left the firm. So what you have is behavior that takes the brains out of a company and then said, we're going to make more money.
Phil Dobbie: Yeah. The problem then, it seems to be when private equity forms firms want to control the firm, basically they want to own the business. That is very different, isn't it, from, private pension. Well, from pension funds, for example, who want to buy equity in businesses that they don't control. and they could do that, obviously, just by buying shares in that company. But increasingly, some of these pension funds are saying, well, it's just too risky buying shares or not getting the return. We are better off buying in unlisted assets, making investments in unlisted assets, and then potentially that money could be used for growth as well, because they're not buying in and acquiring debt, they are just putting money in for a return. The company has to grow for them to see the return. That is a much better way, of using these funds, isn't it?
Steve Keen: Yeah, it's more neutral. I mean, again, this intrusive side, of, private equity is what I'm focusing upon. I'd like to give the example and give all the details Richard's given me. I don't think I'd be breaking any rules and saying it, but I just want to cover the essential point. Richard did, a private equity takeover of his own bank, part of the bank, because, he was a bank in Texas, and all Texas banks at that stage were lending to oil drillers as of the 819. Huge boom in oil prices early on, quadrupling of oil prices. Then they all went bust because there were too many rigs. So the banks then started selling off their, profitable bits to try to cover the debt for losing their oil rig business. And Richard was running the retail segment, and he said that he knew what was going on. You present as good as face as you possibly can to the board and to the public, and then you try to get what's fixed up behind the scenes so it actually looks like the image you gave. You said, well, he managed to get funding for his takeover. he knew the business. He knew where the good bits were. He knew where the parts were. He wanted to trim, did it like crazy, and turned it into a highly profitable venture rather than ending up with the asset stripping that happens when people who don't know the business are the ones who take it over. So again, we talk about capitalism like it's, an abstract thing you can write on a whiteboard. It's an incredibly complex system of production, distribution, exchange, and relative powers. And there are so many, specialized areas of knowledge we have that if you take over a business and don't have that specialized knowledge, you're going to stuff it up. And the only time these things work is when somebody who's knowledgeable about the business, as Richard was about banking, do the takeover. And most venture capitalists and, private equity firms don't have that knowledge, don't care. And they're out for the short term capital gain and then ends up screwing up capitalism rather than improving.
Phil Dobbie: Clayton, Dublier and rice. Who? The company that bought Morrisons. I mean, they have a vast portfolio across a whole load of different. I mean, they are just doing the numbers. They're not a specialty business in any way you'd assume, it would be nice if their companies grew, but if they are, in each case, giving those businesses the debt that they used to acquire them, they're not going to grow out of that situation, are they?
Steve Keen: Most of them don't. They're not most of them. Numbers survive. But I think it ends up, it strips the personality out of those businesses. And often what makes them succeed as businesses in the first place is the personality they acquire through an owner who actually knows the business and has tried to develop, it and improve it over time. So it's normally a bad sign when your firm gets taken over by private equity. Nobody clicks their heels and cheers. What you cheer is the prospect that you won't go bankrupt. Certainly a lot of firms do end up in doldrums and you have technological development means that what was a hot area becomes a cold one over time. Like Polaroid is a classic example of that. They could have actually, from what I understand, they actually developed almost the very first digital camera and then decided not to pursue it because they made too much money out of the disposables. and that's what brought them undone. So sometimes with change of technology and existing management can stuff up. And yes, you would do better if a new management took over, but most of the time you have people who don't know what they're talking about, taking over a business. And the only way they succeed is by paying the workers less, stripping out the assets and trying to sell everything on a rising finance, market. And you're not developing a company, you're disemboweling.
Phil Dobbie: Well, and the reason they're doing that, of course, is because they are in it for the equity, aren't they? So they buy a business, say for ten, billion, dollars, they want to see it suddenly being worth 12 billion and they only paid nine for it. So they made a gain. So that's a capital gain, and they get taxed as a capital gain. So in the UK, that's 28% income tax, 45%.
Steve Keen: Yeah.
Phil Dobbie: So it's a very efficient way of making money, and paying less tax. So the way around that, which in the US, they're looking at this to try and moderate the behavior of private equity firms, is actually saying, well, tell you what, for these companies, for private equity funds, we're going to tax it all as an income tax. all of a sudden that incentive disappears. Yeah, actually got to operate a business that's making a profit.
Steve Keen: And that's much more sensible because again, focus on capital gain. It's the casino world. It's not running a business, not getting an income stream over time. And this is one of the classic things that pro market junkies, like to say, calls the distortion, and yet they get rid of distortions, like trade unions not willing to get rid of distortion, like having a rate of capital gains tax, that's half your income tax level. because that benefits people in their social circle and them most of the time. Look at all the, mps who are household earners and don't pay tax on the income gain on their first home and or their portfolio of investment properties. So what you get is a focus on speculation rather than investment, on numbers rather than the rich tapestry of a capitalist production economy. And that, ends up destroying the damn thing over time. It certainly doesn't make anybody who works for those firms happier.
Phil Dobbie: Yeah, exactly. Well, it would be nice, wouldn't it, if you could turn the tide so that private equity firms have lesser of an incentive just to speculate so that they use the money, maybe not like pension funds do, maybe not to acquire firms, but just to invest in them for growth, rather than just investing in them to try and build up that equity by asset stripping. So the other thing they're looking at in the US is higher priority to employee compensation if the company was to go bankrupt. because I'm sure there's a bit of a game played there as well, and prohibiting the payment of dividends for two years after an asset's been acquired by a private, equity fund as well. So they can't try and strip out money, and pay themselves healthy dividends immediately afterwards. I'm sure there's many more things that can be done, but it certainly needs to be looked at because it keeps on happening, doesn't it? And for the UK, I mean, we lose out. So we lost control of a family business, a successful family business that was, doing a great service for people, primarily in the north of England, giving them what was a pretty good. It still is, actually, frankly. But we'll see what happens over the next few years. But, quite an innovative supermarket chain with a bit of history behind it, might go to the wall or certainly will not be a shadow of its former self as a result of all of this. And the UK government losing out on all the taxation from profits from that business and lots of people losing their jobs. No one wins in this.
Steve Keen: No one wins. And, maybe even the private equity go under because they took on, well, tingers no longer. They take on debt and then package that out so they don't go down with it. But, it'd be good to see some of them go down with the ship they sank occasionally.
Phil Dobbie: Yeah. Meanwhile, all those people who had invested in, Morrisons, who were shareholders, all of a sudden now have got extra cash, wondering what they do with it. where they probably go to their local private equity funds saying, what can you do with this money?
Steve Keen: Or back under the stock market? Just what we need. More stock market.
Phil Dobbie: Exactly. Yeah. Nobody wins. All right, very good. good to talk, Steve. we'll catch you again next week.
Steve Keen: Thanks.