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Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

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Speaker 1: Jay Leye. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg What

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Speaker 1: a week Ahead, then a Federal reserved decision and the

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Speaker 1: payrolls report they will come to you Wednesday Friday, respectively.

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Speaker 1: And Secretary Minution heading to China with a big delegation

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Speaker 1: to talk trade at a time when the Commist Department

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Speaker 1: is wrestling with request with allies for tariff exemptions and

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Speaker 1: really pleased to say that this morning, this Monday, We're

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Speaker 1: joined by Peter Henry is ny U Stern School of

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Speaker 1: Business Dean emeritus and economists as well. Peter, fantastic to

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Speaker 1: have you with us on the program kickoff things this week.

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Speaker 1: Good morning, good morning, delight to be with you. Let's

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Speaker 1: begin with a Secretary Monution going to China show. We're

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Speaker 1: heading to Beijing with a big trade delegation, Allies trying

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Speaker 1: to work out whether the tariffs on aluminium still applied

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Speaker 1: to them and whether they'll get tariff exemptions. Extended. Do

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Speaker 1: you have any clarity on on the direction to travel

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Speaker 1: of this specific issue, Pisa, Well, I'm not being on

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Speaker 1: the forecast how this how this negotiation is going to

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Speaker 1: turn out. I think that's probably a fool's errand but

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Speaker 1: I think the big picture to remember here is that

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Speaker 1: the global economy is deeply depending on the United States

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Speaker 1: and China having good relations, and that's got to be

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Speaker 1: the center sort of negotiating stance of both both parties, because,

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Speaker 1: you know, forgetting that, we lose sight of the fact

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Speaker 1: that the United States has been benefiting enormously from lower

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Speaker 1: consumer goods prices from from trade with China for years,

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Speaker 1: and so trying to get a better deal in some

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Speaker 1: sense for US corporations, it's imperative to remember that the

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Speaker 1: US economy, the world economy is a lot better off

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Speaker 1: as a result of having more not less trade. We're

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Speaker 1: sort of low and side of the fact as well,

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Speaker 1: that much of what is on the table is just

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Speaker 1: a proposal on the table and not a real change

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Speaker 1: in policy. Um, are you surprised that we're a year

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Speaker 1: and change into this administration and actually haven't seen a

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Speaker 1: substantial change in policy. Had a lot of proposals, a

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Speaker 1: lot of retrick, but no real change in policy as

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Speaker 1: far as I could see. Yeah, I think you know,

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Speaker 1: you've seen a lot of volatility in terms of what

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Speaker 1: sort of come out of in terms of proposals from

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Speaker 1: this administration. I mean, you saw it about a week

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Speaker 1: ago now when President Trump uh indicated he wanted to

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Speaker 1: be back in as part of tp TPP and then

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Speaker 1: not part of TPP. I mean, I think that's the

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Speaker 1: sort of thing you're alluding to. A bigger vision around trade,

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Speaker 1: which says, look, the United States is only five percent

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Speaker 1: of the world's population, but we're twenty percent of global GDP,

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Speaker 1: and that would never happen without a world of free trade,

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Speaker 1: and in fact, we should be pushing for more of

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Speaker 1: that and creating more of a positive some outcome which

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Speaker 1: will be good not only for the United States, but

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Speaker 1: be good for the world, but in particularly would be

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Speaker 1: good for the U. S consumers and the US workers.

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Speaker 1: And now we haven't seen that. We had a day

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Speaker 1: of hope on Friday between North and South Korea and

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Speaker 1: the President actually congratulating President She some warm words for

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Speaker 1: President She for the amount of pressure that he's put

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Speaker 1: on North Korea and I guess the big question mark

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Speaker 1: at this point is whether we can blend continue to

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Speaker 1: blend the foreign policy effort of this administration with the

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Speaker 1: international trade story as well, because the President himself has

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Speaker 1: done that, and you just wonder whether there's an open

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Speaker 1: door to walk back some of this retric on trade

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Speaker 1: now that some improvement has been made on the North

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Speaker 1: Korea side of things. I think it's an important point.

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Speaker 1: I think that anything which, if you will, sort of

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Speaker 1: de escalates the rhetoric around trade wars or retaliation and

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Speaker 1: recognizes the positive some nature of global trade, I think

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Speaker 1: would be would be useful, would be useful from the

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Speaker 1: from the point of view of not um not backing

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Speaker 1: people into corners. But also I think I think markets

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Speaker 1: would welcome that as well, and I think that would

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Speaker 1: reduce some of the volatively we've seen it recently. Just

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Speaker 1: in terms of what Marcus are looking at this morning,

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Speaker 1: deal flow really picking up another one crossing the Bloomberg

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Speaker 1: Married vacations to acquire I l G in a cash

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Speaker 1: and stock deal, and Tom King you add that on

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Speaker 1: to Sprint t Mobile this morning, a deal with Marathon

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Speaker 1: in the in the oil space, the energy space, and

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Speaker 1: over in the UK. Of course, Walmart is selling that

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Speaker 1: steak in in Asta to Saintsbury's two. So a lot

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Speaker 1: of deal flow this Monday morning. I wonder higher rates,

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Speaker 1: like money was cheap, let's get it done now, maybe

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Speaker 1: I really wonder about that. A lot of stock deal

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Speaker 1: in this, and you just look at the equity as

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Speaker 1: a currency, and I think some companies are trying to

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Speaker 1: spend it while they can. Yeah, well let's go, let's go.

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Speaker 1: We got Dean Henry with us, which is a good

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Speaker 1: reason too. I should excuse me, John Dean Emeritus Henry

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Speaker 1: with us as well. I just called him Peter long before,

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Speaker 1: long before you darken the door, n y you. It

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Speaker 1: was one of my original sponsors, and we always thanks

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Speaker 1: during School of Business for their support of bloombergun the economy,

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Speaker 1: in Bloomberg Surveillance. Thank you. We've had a lot of

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Speaker 1: your students over the years. They've done very well. Really,

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Speaker 1: yes they have. Yeah, I mean Tanya I think pulled

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Speaker 1: a quality c you know, can we can we just

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Speaker 1: can we just think of Tanya for a little while

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Speaker 1: that she's been called it was a miracle she got

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Speaker 1: through Stern students to listen to this. They do it's

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Speaker 1: a forced podcast for the first time. I will have

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Speaker 1: two books of the summer. That's how good the book

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Speaker 1: flow is. Ben Garrett Grafts The Threat Matrix is on

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Speaker 1: the Federal Bureau of Investigation and on the Robert Mueller

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Speaker 1: that we Don't Know And the other book took at

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Speaker 1: least three seconds to decide to feature is a book

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Speaker 1: of the summer. Robert call Plan Agree or Disagree has

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Speaker 1: driven the debate on realist foreign policy in America for decades.

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Speaker 1: His new book, The Return of Marco Polo's World, is

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Speaker 1: a set of articles and new observations which is definitive.

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Speaker 1: Robert Kaplan joins us in Washington in FM Studios. He

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Speaker 1: is with your Asia group, Ian Bremer Shop, among other abilities.

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Speaker 1: What's your number one message to Mr Manutian going to China,

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Speaker 1: Robert Kaplan. I think the number one message Tom is

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Speaker 1: to preserve the relationship that um you know, that trade

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Speaker 1: has the ability if you have a really you know,

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Speaker 1: tumultuous trading relationship that's not well defined, that's not on board.

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Speaker 1: This affects the military situation in the South and East

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Speaker 1: China Sea. It affects politics throughout the Indo Pacific in

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Speaker 1: Central Asia. In other words, trade is not isolated. It's

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Speaker 1: all part of a geopol clitical mix within the synthesis.

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Speaker 1: And this is the heart of your book as the

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Speaker 1: complexities that need to be thought through the reality as

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Speaker 1: we have a president who is bilateral, he says, and

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Speaker 1: many would say, my deal or the highway is the theory.

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Speaker 1: How do you drag this president into a more complex discussion? Um?

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Speaker 1: I think what you do is um. You well, first

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Speaker 1: of all, you have advisors, and the advisors, as extreme

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Speaker 1: as some of them may be, maybe are still far

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Speaker 1: more nuanced than the president is. And you, you know,

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Speaker 1: you just tell him that, you know, if you do this,

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Speaker 1: here are all the consequences. Here are all the second

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Speaker 1: and third and fourth order effects. And China is developing

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Speaker 1: a society and a system that is going to be

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Speaker 1: uh you know, that is going to be not only

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Speaker 1: a great competitor of the United States it already is,

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Speaker 1: but is on track to overtake the United States in

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Speaker 1: the decades to come unless we're very careful and can

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Speaker 1: compete with them throughout Eurasia and the rest of the

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Speaker 1: world in a very sly fashion. So Robert at the

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Speaker 1: moment and Jonathan by the way, speaking, and great to

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Speaker 1: have you with us on the program. Thank you for

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Speaker 1: joining us. Robert Um the guest. The question for me

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Speaker 1: is China sort of establishes the Silk Road strategy for

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Speaker 1: the whole region. What is the geo strategic sort of

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Speaker 1: aim of the United States and this administration for Asia

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Speaker 1: right now? Well, I think, Um, we've had seventy five

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Speaker 1: years of new of liberal world order building, and the

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Speaker 1: mistake that many of us have made is to think

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Speaker 1: that that's normal. But in the long span of history,

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Speaker 1: the period between nineteen and the coming to power of

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Speaker 1: Donald Trump has been an historical aberration. Most of history

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Speaker 1: is geopolitical jockeying, positioning, wars, competition, rivalry, and trade can

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Speaker 1: be just an adjunct to geopolitical rivalry, whereas free trade

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Speaker 1: is an adjunct to liberal world order building. So what

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Speaker 1: Trump really signifies is a return in you know, is

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Speaker 1: you know is counterintuitive? Is this sounds Trump actually signifies

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Speaker 1: a return to a more traditional form of world history.

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Speaker 1: Expand on that a little bit, what were the the

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Speaker 1: implications the consequence of that approach being? Robert, Well, the

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Speaker 1: consequences of this The twentieth century was about ideological warfare,

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Speaker 1: and that led to the deaths of tens of million,

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Speaker 1: a hundred and fifty million people in two world wars, etcetera.

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Speaker 1: Geopolitical conflict is less bloody, um but it but, but

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Speaker 1: it's equally tumultuous. If you look at the eighteenth century,

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Speaker 1: the nineteenth century, the problems you know, you know, British

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Speaker 1: Foreign Minister Castle Reay during the Napoleonic Wars. This is

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Speaker 1: the period we're back to um where you have the

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Speaker 1: United States, China, and Russia UH competing with each other

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Speaker 1: with lesser powers like Iran, India, et cetera. Where where

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Speaker 1: where a bipolar world during the Cold War was very stable. Um,

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Speaker 1: but we're entering a world where it's not even multipolarity.

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Speaker 1: It's more fractured than that. Robert kapp in one final question,

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Speaker 1: and these are people that have actually read your books,

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Speaker 1: and no doubt we'll give a serious skim and full

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Speaker 1: read of the return of Marco Polo's World. How should

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Speaker 1: Republican state department types respond to this president? Many are

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Speaker 1: saying they won't serve this president. I think of Nick

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Speaker 1: Burns with his public service, Richard hass with his public service,

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Speaker 1: and others should they stay away from this president or

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Speaker 1: with a new secretary of State, should they choose to

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Speaker 1: serve as a public duty? Uh? Tom. The way it

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Speaker 1: works in Washington is we have of such a vast

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Speaker 1: imperial system of under secretaries, assistant secretaries, deputy under secretaries,

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Speaker 1: and on and on that you decide to serve based

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Speaker 1: on whether you trust the person who's hired you. So

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Speaker 1: if they trust Mike Pompeo as State, they should go

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Speaker 1: to work for him. If they trust Jim Maddis at

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Speaker 1: the Defense Department, they should go to work for him.

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Speaker 1: If they do not trust John Bolton at National Security,

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Speaker 1: they should not go to work for him. It's a

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Speaker 1: very diversified system so that it you know, of course

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Speaker 1: it matters who's the president, but what matters particularly is

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Speaker 1: who their boss is and if they can trust their

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Speaker 1: boss both morally and philosophically. Robert Capa, thank you so

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Speaker 1: much for visiting us today. His book my book of

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Speaker 1: the summer, The Return of Marco Polis World. I'll feature

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Speaker 1: that out on social We like to do interviews after

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Speaker 1: interview where there's a theme and there is a good conversation.

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Speaker 1: We did that with Ian Bremer Thursday, Friday last week,

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Speaker 1: Robert Kaplan joining us with this wonderful the Return of

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Speaker 1: Marco Polos World, one of my books of the summer,

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Speaker 1: and now joining us James Travitz, who had my book

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Speaker 1: of the Summer a year or two ago, is leaders bookshelf,

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Speaker 1: just absolutely superb. He is, of course at Fletcher School.

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Speaker 1: Admirals Tavidez, good morning. In Robert Kaplan's book, chapter after

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Speaker 1: chapter he circles back to where he was with the

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Speaker 1: Asia Cauldron and five years ago, which is a South

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Speaker 1: China sea and submarines. Does your US Navy need a

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Speaker 1: new Himan rick Over to drive forward submarine development. We've

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Speaker 1: actually got a terrific Chief of Naval Operations who is

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Speaker 1: a submariner, Tom Admiral John Richardson, and he's just superb.

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Speaker 1: He focuses on the connections between our submarine force, cyber technology,

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Speaker 1: unmanned vehicles, and our ability to use our strategic deterrence

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Speaker 1: at sea, so that that Rickover is walking the streets

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Speaker 1: today and we're lucky to have them. Do we need

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Speaker 1: a larger navy? Robert Keppelan says no, we need a

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Speaker 1: more intelligently deployed navy. But if we're gonna have a

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Speaker 1: return of Marco Polo. The span from at least the

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Speaker 1: Persian Gulf across the Indian Ocean, through the Straits of

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Speaker 1: Malacca up through South China Sea up to Korea. With

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Speaker 1: all the news last week that screams to be navy, Navy, Navy,

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Speaker 1: it does indeed. And my latest book tom is Seapower,

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Speaker 1: The History and Geopolitics of the World's Ocean, and it

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Speaker 1: talks about this. What we are recognized is that Marco

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Speaker 1: Polo went from east to west. What's happening now from

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Speaker 1: west to east one belt, one road. China is reversing

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Speaker 1: the voyages of Marco Polo and moving across that area.

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Speaker 1: And so we need a bigger navy. I don't think

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Speaker 1: it has to be thousands of ships, but we're only

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Speaker 1: at about two hundred and seventy. We need to be

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Speaker 1: up around three twenty three d and thirty ships will

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Speaker 1: get there, but we also need to deploy it more

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Speaker 1: intelligently and focus. As you said, and as Robert Captain

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Speaker 1: would agree, on the South China see Admirals Travitas. Has

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Speaker 1: China ever initiated a conflict with a Western power? No,

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Speaker 1: they have never done so, and they have always held

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Speaker 1: themselves and here's really the point, held themselves above the

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Speaker 1: rest of the world. They think of themselves as that

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Speaker 1: middle kingdom between heaven and Earth, and they've always felt

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Speaker 1: we don't need to do that. That resulted a course

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Speaker 1: in invasions of China from Western powers. Now, what we

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Speaker 1: should remember is that China has attacked other Asian nations

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Speaker 1: in the past and will continue to do that as

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Speaker 1: they consolidate power in the region. And if we don't

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Speaker 1: want the South China Sea in the Western Pacific to

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Speaker 1: turn into a Chinese lake, we're going to have to

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Speaker 1: remain engaged. Having said that, would we want the Gulf

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Speaker 1: of Mexico to turn into a non US lake? You know,

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Speaker 1: in the nineteenth century, of course, we had the Monroe Doctrine,

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Speaker 1: which was designed for that not to happen. But I

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Speaker 1: think we've matured in our geopolitics, and the idea that

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Speaker 1: the United States has a desire or a need to

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Speaker 1: simply declare the Gulf of Mexico territorial sea and build

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Speaker 1: a nine dash line around it is preposterous, and I

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Speaker 1: don't think that we should allow China to do the

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Speaker 1: equivalent around the South China Sea. Having said that, are

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Speaker 1: we misinformed in terms of what we believe to be

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Speaker 1: the threat from China. I think that there is a

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Speaker 1: little bit of China hysteria out there to the degree

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Speaker 1: that we believe China wants to dominate the world. I

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Speaker 1: don't think they do. But here's what they want. They

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Speaker 1: want control of the South China see because it represents hydrocarbons,

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Speaker 1: which is the missing card in their strategic suite. They

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Speaker 1: want the ability to dominate East Asia and move their

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Speaker 1: goods in the way they want to. And they want

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Speaker 1: to get into the Indian Ocean. So they're not reaching

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Speaker 1: for global hegemony, but really regional control. It would not

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Speaker 1: be a good thing for the United States to see

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Speaker 1: that to China at this point. Does the President understand

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Speaker 1: that dialogue? I haven't seen, and I'm talking more from

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Speaker 1: a military standpoint. ADDM mean, we've got the trade discussion

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Speaker 1: in a bilateral slash my way or the highway dialogue.

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Speaker 1: But does the President understand astra Vita's kaplan world. I

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Speaker 1: don't think he does, And of course he famously is

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Speaker 1: not a great reader of books. But a lot of

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Speaker 1: your listeners are Tom and on this one, I'd recommend

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Speaker 1: Graham Allison. He's a brilliant his new his new book,

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Speaker 1: Destined for War China in the US and the Century.

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Speaker 1: And as you know, Tom, there's no question mark at

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Speaker 1: the end of that title. So Graham takes a pretty

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Speaker 1: aggressive view towards China. I think if you read that book,

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Speaker 1: you get a pretty good understanding. Perhaps someone should summarize

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Speaker 1: it for the president. Do you believe that there will

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Speaker 1: be a war between the United States and China? I

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Speaker 1: do not. I believe over the long term, throughout the century,

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Speaker 1: our interests converge more than they diverge. But if we

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Speaker 1: are foolish about it and are either too aggressive that

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Speaker 1: would lead to war, or if we're too passive that

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Speaker 1: would lead to war. We have to kind of dial

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Speaker 1: this one in. I'm gonna put out on Twitter, folks,

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Speaker 1: Bloomberg Radio. We'll see at first see Power, James Travids.

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Speaker 1: It is just read it for the first time. The

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Speaker 1: admiral went to see you don't have to read it

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Speaker 1: for anything else. He's like in the smallest boat in

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Speaker 1: the Davy. He's got his float, he's on his arms.

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Speaker 1: He's like eighteen or nineteen years old and he's going

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Speaker 1: out of San Diego Harbor, and you know it's just

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Speaker 1: that alone is worth reading. Right now, Sarah Sanator joins

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Speaker 1: us with Bernstein, and we love having her on to

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Speaker 1: talk about I guess our national diet and our national

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Speaker 1: food and Sarah, I want to ask a basic McDonald's

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Speaker 1: one oh one question, which is a butch cassidy. Who

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Speaker 1: are these guys? And I do that Looking at the

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Speaker 1: two thousand seventeen annual report quote, we have committed to

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Speaker 1: getting more of our restaurants in the hands of our

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Speaker 1: franchise ease and developmental licensee strategic partners. There's enough ease

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Speaker 1: in there for me to know that's a bunch of

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Speaker 1: hot air. What does mc Who is McDonald's. Do they

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Speaker 1: really own the restaurants that we're eating out of. I

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Speaker 1: don't know if I would characterize that is hot air

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Speaker 1: because they answer your question, Um, McDonald's is a brand owner.

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Speaker 1: So their job, frankly is to do things that for

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Speaker 1: the brand. So think about marketing and menu innovation and

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Speaker 1: essentially how they want their global footprint to look, and

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Speaker 1: then they leave it in the hands of their partners,

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Speaker 1: the franchise ease, the licensese to execute against that plan. So, yes,

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Speaker 1: there are a lot of ease in there, but I

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Speaker 1: don't think that that diminishes the fact that the strategy

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Speaker 1: is working for them. The strategy has been brilliant with

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Speaker 1: lower revenue growth. Explain how you go from twenty seven

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Speaker 1: billion of revenue down to two ish billion and that's

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Speaker 1: a good thing. What does it mean that they're five

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Speaker 1: billion short on revenue from where they were a couple

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Speaker 1: of years ago. Yeah, in this case, one of the

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Speaker 1: rare cases, we're shrinking the top line is a good

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Speaker 1: thing because it reflects the fact that instead of running restaurants,

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Speaker 1: they're just collecting the royalty from them. So right, so

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Speaker 1: instead of reporting acent of sales for a restaurant, they're

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Speaker 1: only reporting called fifteen percent of sales. But those are

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Speaker 1: very high margin. They basically have minimal costs associated with them,

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Speaker 1: just the cost of owning the real estate as McDonald's

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Speaker 1: tends to do um and not much else. Beautifully explained,

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Speaker 1: they take cents or so down to eb Yeah. Well, Sarah,

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Speaker 1: I want to go through the menu. I want you

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Speaker 1: to go through the menu if you can, because many

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Speaker 1: people may not be familiar with things like turtle drinks

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Speaker 1: or even being able to use your mobile app to

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Speaker 1: pay for things at McDonald's. Go through the menu, force

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Speaker 1: tell us what's working for them, and don't leave out

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Speaker 1: the garlic. I'll try not to. I think the working

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Speaker 1: for them is but we think of as the bar

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Speaker 1: bill strategy, which is on the one end you have

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Speaker 1: you know, more premium products. Last year there was a

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Speaker 1: real focus on these signature crafted hamburgers, which had three

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Speaker 1: different builds that you could choose from, and you could

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Speaker 1: choose either uh hamburger or a chicken sandwich, and you

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Speaker 1: could choose different kinds of buns. So it's sort of

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Speaker 1: what I would call mask customization. And they were frankly

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Speaker 1: very well received because they're pretty delicious. So you had,

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Speaker 1: you know, things like a Pico de Gaio which also

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Speaker 1: had guercomole which tasted like real guacamole um, and other builds,

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Speaker 1: the two other builds, both of which had bacon, because

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Speaker 1: because everything tastes better with bacon. So on the one

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Speaker 1: end you had that the premium, and then on the

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Speaker 1: other end you had them really emphasizing being competitive in value,

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Speaker 1: as cvster Brick would say, so um not necessarily being

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Speaker 1: the lowest price point and every item at every time,

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Speaker 1: but having an offering like the Mick Pick two for

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Speaker 1: two or the dollar soda two dollar coffee that was

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Speaker 1: very compelling UM to two restaurant goers. And we're seeing

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Speaker 1: that again this year with them one to three dollar

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Speaker 1: value menu on the on the low end, but then

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Speaker 1: also this fresh beef quarter pounder, which again UM is

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Speaker 1: now available in New York area and it's it's a

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Speaker 1: very good sandwich. So McDonald's is really trying to stay

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Speaker 1: true to this UM for honestly being a progressive burger

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Speaker 1: company UM, such that they have good food that tastes

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Speaker 1: good as well sourced, but also a value price point

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Speaker 1: that can appeal broadly. Sarah, How are they able to

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Speaker 1: do this so quickly? You know, I think, UM. You know,

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Speaker 1: what we saw with the leadership turnover in was was

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Speaker 1: really a cultural shift and that was very much the focus,

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Speaker 1: which is, you know, be fast, be nimble, fail fast,

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Speaker 1: as they say, UM, but make sure that that if

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Speaker 1: there's a demand for a product in the market, that

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Speaker 1: McDonald is going to meet it. So you know, All

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Speaker 1: day Breakfast is a good example of this. You know,

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Speaker 1: that's probably the most requested and new item or menu edition,

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Speaker 1: probably since they added breakfast in the seventies. And yet

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Speaker 1: for a very long time the system was hesitant because

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Speaker 1: the operational challenges. And I think you know, the focus

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Speaker 1: this time with this management team is to make sure

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Speaker 1: that things like operational challenges didn't stand in the way.

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Speaker 1: Same with fresh beef quarter pounders. It's a good sandwich.

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Speaker 1: They know it tested well, people liked it, and they

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Speaker 1: were going to figure out a way to bring it

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Speaker 1: to market. All right. For Tom that doesn't necessarily get

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Speaker 1: the mic cafe that has been so popular. He can

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Speaker 1: now get it into mic Cafe in a bottle. Tell

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Speaker 1: us about those kinds of ventures, because it's not only

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Speaker 1: Mick Cafe in a bottle. There's Mick Cafe bags, cake cups,

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Speaker 1: and canisters. That's right. I mean, this is still a

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Speaker 1: very very small piece of their business. You know, it's

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Speaker 1: it's and it's always it's always going to be hard

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Speaker 1: to to move the needle um. You know, in the US,

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Speaker 1: when you have fourteen thousand restaurants doing you know, two

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Speaker 1: and a half million dollars UH per box, you know

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Speaker 1: any anything, you know, thirty five billion dollar system, it's

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Speaker 1: very hard for anyone product, and yeah, but it's going

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Speaker 1: to allow me to segue into Starbucks. So that's why

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Speaker 1: I did it. We're talking about it, okay, So then

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Speaker 1: there's value to you. I think there's value there too

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Speaker 1: to McDonald's. Mean, look, it's a testament to the fact

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Speaker 1: that the brand is strong enough to be sold outside

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Speaker 1: of the McDonald's restaurants, whether ever, will be hugely meaningful.

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Speaker 1: Probably not, but you know, but people like the costs.

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Speaker 1: So tell Tom about Starbucks and what their challenges are,

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Speaker 1: you know, I think, look, Starbucks is a very good

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Speaker 1: global brand. Um. You know, our view is that increasingly

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Speaker 1: it may just be more mature than uh than it's

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Speaker 1: you know, the company is willing to acknowledge or let up. Um.

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Speaker 1: You know, there's there's long been that joke about Starbucks

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Speaker 1: and every corner um, and and that is increasingly I

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Speaker 1: think part of the issue for them, there's just you know, growth,

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Speaker 1: there's only so much, so many units you can add

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Speaker 1: before they are to impact the existing business. Sir. Before

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Speaker 1: I let you go Chipotle seven hundred down to three,

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Speaker 1: I guess with an enthusiastic bounce, where are you on

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Speaker 1: CMG right now? I mean, I like this stock. I

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Speaker 1: have to say, uh, you know, it's been been sort

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Speaker 1: of a long suffering bowl. We saw all these opportunities

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Speaker 1: for the business, and the last management team just wasn't

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Speaker 1: executing against them. And I think the reason you've seen

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Speaker 1: this big move is because the opportunities are very much

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Speaker 1: there in terms of driving top line through basic things

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Speaker 1: like marketing, you know, more effective advertising, some digital issues

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Speaker 1: and also a lot of costs. And we finally have

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Speaker 1: a CEO and now a Chief Marketing Officer UM and

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Speaker 1: chief restaurant officer, and I t that are that are

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Speaker 1: there and capable of executing. What can they learn from

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Speaker 1: Stephen j Esterbrook? I think, you know, look, I think

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Speaker 1: being nimble, being flexible that and and listening to what

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Speaker 1: your customers without doing, you know, going too far straight

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Speaker 1: from your core value propositions. I think everybody can learn that. Sir,

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Speaker 1: just terrific. Thank you, Sarah Snatory short notice on Bernstein McDonald.

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Speaker 1: There was the L word pim listen. It's just stunning.

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Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and

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Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast

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Speaker 1: platform you prefer. I'm on Twitter at Tom Keane. Before

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Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg Radio.