Puma commemorates ‘black power’ salute in US market push

Tommie Smith, centre, and John Carlos make their statement at the 1968 Mexico Olympics. (Getty Images)
Updated 11 October 2018

Puma commemorates ‘black power’ salute in US market push

  • Puma’s #REFORM campaign will see brand ambassadors such as rapper Meek Mill call for people to post images of themselves online with a raised fist
  • Smith never competed again after 1968, received death threats and struggled to make a living for years

BERLIN: Puma is launching a campaign to mark the 50th anniversary of US sprinter Tommie Smith’s black-gloved salute at the 1968 Olympics, shortly after rival Nike scored a hit with an ad featuring a modern-day activist for racial equality.
Nike saw a jump in sales after its advertisement with American footballer Colin Kaepernick, who began kneeling during the US national anthem at NFL games in 2016 to protest against police shootings of unarmed black men — a gesture that has drawn the ire of President Donald Trump.
Puma’s #REFORM campaign will see brand ambassadors such as rapper Meek Mill call for people to post images of themselves online with a raised fist to commemorate Smith’s silent salute at the Mexico Olympics on Oct. 16, 1968.
The brand is working with rap mogul Jay-Z’s Roc Nation on live and social media events to fight racism and sexism, and will match donations to charities such as the American Civil Liberties Union (ACLU), up to $100,000 in total.
Chief Executive Bjorn Gulden said it was a coincidence the anniversary comes soon after the Kaepernick ad, and also shortly after Puma launched its garish orange and black “Clyde Court Disrupt” basketball shoes — marking its return to a sport with close links to the social justice movement.
“We are not trying to make commercial advertising out of this but we think it is good for the brand because it is part of our values,” he told Reuters.
Puma has sponsored Smith for more than 50 years. He took a pair of their shoes onto the platform when he did his salute.
Puma is launching a collection of shoes called “Power Through Peace” on Oct. 16, with the proceeds going to charity.
Gulden said Smith was a trailblazer for other athletes like Kaepernick, who could not find a job for the 2017 season and is still without a team. Smith never competed again after 1968, received death threats and struggled to make a living for years.
“What he did then ... was the bravest thing an athlete has ever done when you think about the consequences,” Gulden said.
Nike sales jumped after the Kaepernick campaign, but its shares fell late last month when that did not feed through to an increase in the company’s full-year forecast.
Both Puma and German rival Adidas have been taking share from Nike in its home market in the last couple of years, helped by the popularity of their retro fashion styles.


Turkey’s tumbling lira tests Erdogan’s rate resolve

Updated 07 August 2020

Turkey’s tumbling lira tests Erdogan’s rate resolve

  • Erdogan believes high rates cause inflation and sacked his previous central bank chief for not following his instructions

ISTANBUL: Turkish central bank head Murat Uysal has stuck to the rate-cutting script since President Recep Tayyip Erdogan hired him to lift Turkey out of a recession and currency crisis.

A year later with the COVID-19 pandemic now crushing the lira, some traders and analysts say they think Uysal will instead hike rates to head off a deeper crisis.

Erdogan, whose 17 years in power have been marked by cheap credit and booming growth, has repeated the unorthodox view that high rates cause inflation and sacked Uysal’s predecessor for not following his instructions.

The central bank did not immediately comment on expectations of higher rates or on political pressure. Uysal said last week that policy was in line with the central bank’s inflation forecasts and he has said in the past it has policy independence.

Investors, analysts and sources close to Turkey’s central bank say that the most direct solution to the lira’s costly slide, in the form of a rate hike, would only happen as a last resort.

Erdogan’s office was not available to comment, while a spokesman for the Treasury did not immediately respond.

After the central bank slashed rates to 8.25 percent from 24 percent in less than a year, such a quick policy turn-around would likely need the government’s tacit approval, analysts say.

Nevertheless, money market traders have been adding to bets in recent days that Uysal, who halted an aggressive year-long easing cycle in June, has little choice but to tighten policy soon to avoid a second currency crisis in as many years.

HIGHLIGHTS

Lira hits historic low vs dollar as volatility returns.

After aggressive easing, traders bet on policy reversal.

Previous central bank head sacked for ignoring Erdogan.

The lira hit a historic low on Thursday and is down nearly 20 percent versus the dollar so far this year, despite the greenback’s own weak performance.

While the central bank’s policy rate is 8.25 percent, the November money market pricing for three-month lending is at 10.75 percent, implying 250 basis points of tightening by year-end.

Some fear that in a worst-case scenario, interventions to stabilize the lira lose steam as the central bank’s reserves run thin, prompting further depreciation, inflation and a ballooning current account deficit.

“We have a lot of ingredients here to have a full blown crisis,” said Nikolay Markov, senior economist at Pictet Asset Management. “The hope is to have a more proactive policy response from the central bank.”

Turkish annual inflation is high at near 12 percent, leaving real rates deeply negative for depositors in lira, a factor which has hastened the currency’s slide.

Economists polled by Reuters before the latest lira selloff expected more rate cuts once things cooled down.

But after two weeks of volatility, Goldman Sachs now expects 175 points of hikes by year end. Pictet’s Markov said that Turkey boasts the biggest gap among major emerging markets between the current policy rate and where it should be based on inflation and other factors.

Ankara is running out of alternatives to monetary policy.

The central bank’s gross FX reserves have dwindled to $51 billion from $81 billion this year, official figures show.

Data and the calculations of traders show the drop is in part due to the central bank and state banks selling some $110 billion in dollars since last year, including an acceleration in recent weeks, to stabilize the lira.

Ankara’s appeals for funding from the US Federal Reserve and other central banks have only yielded a deal with Qatar.

Rate hikes are only an option if more foreign funding cannot be found, a senior Turkish banker said, adding: “We do not anticipate a rate rise unless there is no other option.”