Fila Making Strides With 1990s Fashions. Remember Dad Shoes?

They’re the chunky, thick-soled throwbacks to the 1990s known as dad shoes. And they’re beloved by millennials, whose fascination with retro footwear has brought Fila back from the dead.

They’ve also helped Yoon Yoon-soo amass an unlikely fortune. Gene, as he’s known in English, is estimated to be worth about $830 million through his stake in Fila Korea Ltd., which acquired the global Fila brand in 2007 in what South Korean media called a shrimp swallowing a whale. Yoon went on to oversee a revival in Fila’s fortunes, sending shares of his company surging.

Central to Fila’s comeback was its move to bring back iconic products from the ’90s, targeting shoppers craving classic looks. Its “Disruptor 2” sneakers, for example, reintroduced in 2017, were among the most popular women’s shoes at one point last year, according to global fashion search platform Lyst. Fila estimates that more than 10 million pairs were sold as of January.

Yoon, 73, declined to comment for this story. He told a local newspaper in South Korea in 2017 that Fila is more than just a sports brand to him. “It’s more like a baby I had at the late age of 45,” he said.

Jenner, Rihanna

Fila has also been helped by celebrities wearing its products — U.S. model Kendall Jenner and singer Rihanna have both been seen in clothing bearing Fila’s iconic red, white and blue logo — and by its relatively low pricing.

“Fila changed its target from people in their 30s and 40s to younger customers while cutting prices,” said Na Eun-chae, an analyst at Seoul-based brokerage Korea Investment & Securities Co. “That worked well, along with its focus on the shoe segment.”

Fila Korea shares have surged 400% from the start of last year through Friday, boosting its market value to $4.3 billion. The stock rose as much as 0.4% in early trading Monday. Yoon and his family own about 20% of the company.

Yoon, a late bloomer who graduated from college in his 30s, started at Fila in 1991 as head of the company’s South Korea business, earning an annual salary of $1.5 million. But he had his sights set on bigger things. In January 2007, he spearheaded a $400 million leveraged buyout of the global Fila brand and all its subsidiaries. In 2010, he took the company public in South Korea.

Originally started in Italy in 1911, Fila had been sold to U.S. private equity firm Cerberus Capital Management in 2003. Its heyday ended in the 2000s when it suffered from declining sales and management made excessive investments.

Another key part of Yoon’s strategy was building a majority stake, starting in 2011, in the company now called Acushnet Holdings Corp., the maker of Titleist golf balls. Acushnet listed its shares in New York in 2016. Fila Korea reported 2018 revenue of 3 trillion won ($2.6 billion), 61% of which came from Acushnet, according to Fila Korea.

Fila’s footwear and apparel sales, excluding Acushnet, saw a 52% increase to 1.2 trillion won in 2018 from the year before, the company said in a presentation.

Yoon never envisioned a career in dad shoes and golf balls. His mother died of typhoid shortly after his birth. He lost his father to cancer in high school and wanted to become a doctor, but failed three times to get into medical school. He ended up studying and graduating in political science and diplomacy.

His age made him an unappealing candidate for entry-level jobs at most companies. After many attempts, Yoon landed at J.C. Penney Co., buying Korean products to sell in the U.S. Later, he came across Fila in the U.S. and persuaded the firm to manufacture shoes in South Korea. After that, Yoon was asked to set up and lead the company’s Korean business, which he later bought out before acquiring the global brand.

Fila now operates in more than 70 countries. The brand is seeing rapid growth in markets such as China, where Fila Korea has a 15% stake in a joint venture with Anta Sports Products Ltd.

Yoon, who once said he’d like his epitaph to be that he “worked hard,” is unlikely to be judging his success by his net worth alone.

“Wealth accumulation that’s not morally justified has no meaning,” he once told South Korean newspaper Chosun Ilbo. “We need to look back on how we made our fortunes.”

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The Dow is On Track to Post Its Best June Since 1938

Over the weekend, Donald Trump tweeted about news that the stock market has seen its best June in decades. “Thank you Mr. President!” ended the note.

Indeed, the S&P 500 has so far seen a 7.3% month-over-month jump as of June 21, the highest percentage gain over that time period since 1955. The Dow Jones Industrial Average was up 7.8% over the same period, the best performance since 1938, according to stock market data reviewed by Fortune.

Good news? Maybe, but performance during other months of this year have been modest in comparison and experts say an flashback to irrational exuberance is generally not a harbinger of good news.

The numbers for June are unusually high compared to the rest of 2019, and so aren’t representative of what the markets as a whole have been doing. Although year-to-date S&P returns have been 17.8%, more than a third of those gains have come in June alone. The Dow is up 14.7%, with June kicking in more than half those gains.

“In May, we had our first 5% pullback of the year,” said Robert Phipps, director and portfolio manager at Per Sterling Capital Management. “Much of what we’re seeing in June is a rebound of the sell-off we saw in May.” The June jump is “irrationally” based on “something beyond perfection,” said Tony Roth, chief investment officer of Wilmington Trust.

Driving the recent rally is a collection of factors which have one common denominator: They all involve some wishful thinking. One is the prospect of a trade deal between the U.S. and China at the G20. “I think the best we could get is some wording that we made some progress so we’ll hold off on the $350 billion in [additional] imports at tariffs of 25%,” Phipps said.

Although Trump announced the new round of tariffs, they are not yet active and could be withdrawn. Economists have expressed concern that the new round, announced in May, would have significant negative effects on the economy, as Fortune has reported. “The market doesn’t believe Donald Trump’s threat to impose new tariffs,” Roth said. “If he puts the tariffs on, then he’s dead, politically. If he does, the market has a long way to fall to price that in.”

There is also a strong chance, according to some trade experts, that there might be no meeting at all, as Fortune has previously reported.

As for rate cuts, rates are so low that the Fed probably cannot drop them far enough to have a significant and lasting effect on the economy. “The reasons businesses and people aren’t spending more are uncertainty and lack of confidence,” Roth said. “Capital is abundantly available right now. Cutting rates by 25 to 50 basis points won’t have a meaningful change on behavior.”

“It normally takes 500 to 600 basis points to pull out of a recession but all they have is 250,” said Phipps.

Not everyone assumes the month’s gains are precarious. “Although geopolitical risks are high and may not recede in the near term, economic fundamentals remain strong and equities are still very attractive relative to fixed income securities,” said Alfredo La Rosa, chief investment advisor at Intercontinental Wealth Advisors. “Consumer debt and net corporate leverage are not excessive. We do expect that company earnings will continue to grow in high single digit numbers for the remainder of the year. Further support is being fueled by buoyant consumer optimism and the fact that major developed markets’ central banks are pivoting to more dovish policies. The chances that the S&P 500 and Dow maintain their positive momentum through the month and the next quarter are very high, especially if geopolitical risks somehow diminish.”

What’s next, then? A big helping of uncertainty and hope that everyone keeps spending. “If the consumer is removed as the supporter of the economy, we’re in real trouble,” Phipps said.

So enjoy June–or at least what’s left of it.

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Trump Sanctions Iran’s Supreme Leader in Provocative Move

President Donald Trump imposed sanctions on Iran’s supreme leader, Ayatollah Ali Khamenei, and eight senior military commanders, a provocative step designed to increase pressure on the Islamic Republic.

Trump told reporters at the White House on Monday that the penalties would deny Khamenei and his office access to financial resources.

“The supreme leader of Iran is the one who ultimately is responsible for the hostile conduct of the regime,” Trump said.

Trump last week abruptly canceled planned air strikes against Iran for shooting down a U.S. Navy drone on Thursday. The administration also blames Iran for recent attacks on two oil tankers near the Persian Gulf, though Iran denies it.

The penalties won’t have a significant impact on a country that’s already in recession and facing heavy sanctions from the U.S. Still, the new restrictions serve as symbolic reprimand for the attacks, according to former Treasury officials.

‘Annoy the Iranians’

“It will have an effect because it will annoy the Iranians and make negotiations hard to pull off if the supreme leader is sanctioned,” said Brian O’Toole, a senior fellow at the Atlantic Council who previously worked in the U.S. Treasury Department’s sanctions unit.

The U.S. already has sanctioned more than 80% of Iran’s economy, according to Secretary of State Michael Pompeo. He’s en route to Saudi Arabia and the United Arab Emirates to rally a front against Iran.

Khamenei, who was initially elected president of the nascent republic in 1981, has “possessions” worth an estimated at $200 billion, according to a Facebook post by the U.S. embassy in Baghdad in April. He is backed by the Islamic Revolutionary Guard Corps and has survived an assassination attempt and frontline combat.

The U.S. Treasury Department said Monday those sanctioned also include eight officials of the Guard Corps who supervised “malicious regional activities,” including its ballistic missile program and “harassment and sabotage” of commercial ships in international waters.

Treasury Secretary Steven Mnuchin said at a news conference in Washington that some of the sanctions had been “in the works” and others were a result of “recent activities.” He said sanctions against the Islamic Republic have been effective in cutting off funds to the military and “locking up” the Iranian economy, and that the new penalties would be effective as well.

Mnuchin said the U.S. will impose financial restrictions on Iran Foreign Minister Javad Zarif “later this week.”

Trump told reporters Monday that, “A lot of restraint has been shown by us, a lot of restraint — and that doesn’t mean we are going to show it in the future, but I thought that we want to give this a chance,” he said.

Any financial institution that knowingly assists with a financial transaction for those who were sanctioned could be cut off from the U.S. financial system, according to the Treasury.

Trump’s Warning

Trump had warned of additional sanctions on Saturday. At the same time, he said an interview that aired Sunday on NBC’s “Meet the Press” that he thinks Iranian leaders want to negotiate and he’s willing to talk with no preconditions except that the outcome must be Iran acquiring no nuclear weapons. Trump said the proposed discussions have “nothing to do with oil.”

Even before the new penalties were announced, the U.S. had applied sanctions to nearly 1,000 Iranian entities, including banks, individuals, ships and aircraft. In May, the Trump administration prohibited the purchase of Iranian iron, steel, aluminum and copper.

Iran’s Foreign Ministry had said new penalties won’t force the country to negotiate or capitulate.

“Are there any other sanctions left for the U.S. to impose on Iran?” ministry spokesman Abbas Mousavi said Monday prior to Trump’s announcement, according to the official Islamic Republic News Agency. The Trump administration “knows full well that if pressure and sanctions were the answer, they would have yielded results much earlier.”

Tensions have spiked in the Gulf since May, when the Trump administration revoked waivers on the import of Iranian oil, squeezing its economy a year after the U.S. walked away from the landmark 2015 deal meant to prevent the Islamic Republic from developing a nuclear weapon. Since then, a spate of attacks on oil tankers near the Strait of Hormuz shipping choke point have raised the specter of war and pushed up oil prices. The U.S. has blamed the attacks on Tehran, which has denied any wrongdoing.

On Monday, Trump questioned in comments on Twitter why the U.S. was protecting the shipping route on behalf of other countries.

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–Your questions about the U.S.-Iran standoff, answered

Black women voters will be central to the 2020 election, experts predict

–Can Trump fire Fed Chair Jerome Powell? What history tells us

–Airlines worldwide react to the U.S. ban on Iranian airspace

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Yellow Vests, Brexit and Cruise Backlash: Why Carnival Can’t Catch a Break in Europe

Recession in Southern Europe. The “yellow vest” revolts in France. Citizen backlash in Venice, Barcelona and Amsterdam. Price wars in Germany. And don’t forget about Brexit. Add it all up, and Carnival Corp has a big Europe problem.

The weight of the old world’s macroeconomic and geopolitical troubles helped sink the company’s full-year guidance estimates late last week and sent shares tumbling more than 8 percent over the past two trading days. The situation on the other side of the Atlantic deteriorated so quickly that the world’s largest cruise ship operator surprised the markets on Thursday by pushing up its second quarter results to warn of an uncertain second-half of 2019.

On a call with analysts, CEO Arnold Donald said the company was slashing full-year guidance from $4.35-$4.55 earnings-per-share to $4.25-$4.35 EPS. Donald singled out its Italy-based Costa and German-speaking AIDA cruise ship businesses as two culprits contributing to the 10-to-30-cent forecast drop. “Our Continental European brands have been facing heightened geopolitical and macroeconomic headwinds, which has impacted operating performance this year,” Donald said.

It could have been worse. Cheaper fuel costs and favorable currency swings cushioned the blow by a few pennies last quarter, the company said. But should oil prices spike due to tensions in the Persian Gulf or should the already flagging euro weaken further, these external factors could weigh further on the company’s business abroad, and its bottom line.

Europe has been a particularly challenging market for the entire sector, but Carnival appears more exposed than its rivals. “Carnival is unique in the publicly traded cruise line space. They have what I would refer to as national, or nationalistic, brands,” says Sharon Zackfia, an analyst that covers the sector for William Blair, referring to Costa and AIDA. “And so, they become a little bit more levered towards the environment in those home markets.”

And there’s a lot of turbulence to deal with. At the start of the year, Amsterdam began levying a new tax on cruise ship passengers, forcing Carnival and others to dock elsewhere. Meanwhile, Barcelona and Venice, two popular Carnival cruise destinations, are both trying to divert ships to more distant ports to regulate the flow of tourists and to reduce carbon emissions. Venetians have stepped up protests against the massive cruise ships in recent weeks after the MSC Opera cruise liner, run by rival MSC Cruises, lost control and collided into a busy pier earlier this month.

But the company says the big problem in Italy is the lackluster economy. Italy has been in and out of recession in recent years, and that’s starting to bite into the spending power of the Italian middle class. The company cited the opening of lower-budget resorts in North African and Turkey that are adding competition to the southern Europe vacation market and driving down prices everywhere.

While Italy and Southern Europe is a problem of weak demand for cruise holidays, the German problem is one of overcapacity, or too much supply, Zackfia says. The German-speaking markets have seen an in-flux of new tour company entrants, driving down ticket prices–not just in Germany, but in Switzerland and Austria.

That German pricing issue could turn around as soon as next year, Zackfia noted. But the problems in Southern Europe are beyond the company’s control. And it’s that lack of visibility on when the company might fully steer through the choppy waters in Europe that led to her decision to downgrade the stock on Thursday.

Carnival has problems elsewhere. The Trump Administration, for example, slapped new restrictions on Cuba, for example, that have torpedoed a promising new port of call. But it’s Europe, which Zackfia says accounts for 27% of the company’s cruise ship capacity, that will hobble the company over the next few quarters.

“Given the uncertainty in Europe, and the situation there, and, in addition, the pressure on pricing in aggregate over the next six months, it didn’t seem as if there’d be an opportunity for the stock to out-perform over our rating time horizon, which is twelve months,” she explained in downgrading Carnival from a buy to hold.

At least for investors, it’s not looking like calm seas are in the near future.

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Hollywood Stars to Perform Live Reading of Mueller Report. Here’s How to Watch

If you’re waiting for a cinematic adaptation of the Mueller Report, you likely have a long wait ahead of you. If, however, you want to hear some of Hollywood’s biggest actors give their take on the special counsel‘s investigation of Donald Trump and interference in the 2016 election, you only have to wait a few hours.

Monday night, June 24 at 9 p.m. E.T., a gaggle of stars will give a live performance of the report, which will be live streamed on the website of Law Works, a group that is hoping to raise the public’s awareness of the report’s contents and “expose current threats to core American values and electoral systems”.

The Investigation: A Search for the Truth in Ten Acts, as the reading is called, was organized by Pulitzer Prize-winning playwright Robert Schenkkan, who also earned an Emmy for his HBO series The Pacific in 2010.

Among the actors who will participate in the reading are Annette Bening, Kevin Kline, John Lithgow, Sigourney Weaver, Julia Louis-Dreyfus, Mark Hamill, Justin Long, Piper Perabo, Michael Shannon, and Zachary Quinto.

The reading is being produced by Susan Disney Lord, Abigail Disney, and Timothy Disney, the grandchildren of Roy Disney and grandnieces and grandnephew of Walt Disney.

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Mayor Pete Faces the Music: RaceAhead

Last week, a black South Bend, Ind. resident was shot and killed by a white police officer. His name was Eric J. Logan. He was 54 years old.

The officer involved claimed that Logan approached him with a knife and ignored repeated orders to drop it. Neither the dashcam or the officer’s bodycam video had been activated. As a result, there are a lot of unknowns.

The incident has inflamed existing tensions between South Bend’s young and charismatic mayor, Pete Buttigieg, and the city’s black community. Now Buttigieg, who had been winning over crowds across the country during his unlikely quest as presidential hopeful, is facing his first test of truly public leadership.

“How’s he handling it?” said Oliver Davis, the longest-serving black member of the South Bend Common Council to The Washington Post. “Well, he talked to the media before the family. He skipped the family vigil, full of black residents. And then he then gave a speech to the police. So, how do you think that went over?”

Those tensions came to a head during a town hall meeting yesterday afternoon with a deeply skeptical and angry majority-black hometown crowd.

It went poorly for Mayor Pete.

“We don’t trust you!” yelled one audience member. “Liar!” yelled another, as the meeting descended into chaos. Twitter users also followed the action closely. “Don’t treat Black folks horribly, ignore police violence against them and try to run for president thinking Black folks are just gonna fall in line & back you just because you’re a Democrat,” said one user. “Black people in South Bend wasn’t having it.”

The mayor has been called out in the past for his economic development plan which razed low-income black and Latinx neighborhoods, and for his handling of police misconduct cases and lack of diversity on the police force.

A quarter of the city’s 100,000 residents are black, 40 percent of whom live at or below the poverty line. Many of them showed up yesterday. “You might as well just withdraw your name from the presidential race,” said one woman in the crowd. “His presidential campaign is over… I believe that today ended his campaign.”

Had Buttigieg still been the relatively unknown head of a small Midwestern city, the death of Mr. Logan and the subsequent investigation might not have made the national news. Instead, a small group of citizens, angry and ready for prime time, were able to bring their legitimate grievances to their celebrity mayor, and as a result, the rest of the world.

It’s the best argument thus far for having so many people run for president.

Former Vice President and current presidential candidate Joe Biden is facing his own problems with race, which we’ll cover in greater depth as they continue to plague him. Because they will.

Instead, I’ll end today’s dispatch on a lighter note of race and reconciliation, courtesy of the BET Awards, which aired last night.

While the show is always a joy-fest–and, this year included a magnificent tribute to slain artist Nipsey Hussle–there was one moment of inclusion that deserves a special call-out.

This year, the BET family welcomed Billy Ray Cyrus to the stage, as he joined rapper Lil Nas X in a performance of his country-rap hit “Old Town Road.” Lil Nas X, resplendent in yellow fringed chaps, has found a country home in the heart of the R&B community, one that was denied him on the music charts.

If you’re old enough to remember the backlash when Houston, Tex. native Beyonc? performed with the Dixie Chicks at the 2016 CMA Awards, then you understand what a moment this was.

It’s nice for Cyrus to have this surprising second act. But I have to believe he’s earned the love not just for his country bona fides, but for his willingness to stand up for a talented young brother who was facing an unfair barrier to his advancement. It was an ally power move.

Now that’s a leader we can believe in.

On Point

[bs-title]Focusing on just diversity numbers creates tunnel vision[/bs-title][bs-content]And that makes it difficult to create a truly inclusive workplace, writes Tim Ryan, U.S. chairman of PwC, in Fortune. “Establishing a workplace where each employee feels comfortable bringing their true selves to work is key,” he says. That’s why reforming company culture needs to be central to any diversity and inclusion strategy. These efforts shouldn’t be “tacked on as an extracurricular,” he says, but rather central to the company’s approach. To that end, CEO Action for Diversity and Inclusion–a coalition of 700 companies–has introduced a pledge for participating CEOs to present their diversity and inclusion plans to their respective boards of directors, creating a “mechanism which holds them accountable to their employees to make the workplace better for all.”[/bs-content][bs-link link=”” source=”Fortune”]

[bs-title]A transgender Goldman Sachs employee describes how she ‘became herself at work'[/bs-title][bs-content]”Wall Street has had a hard time kicking its reputation as a dismal place for people who aren’t straight white men,” this New York Times feature points out, but “Goldman presents itself as being ahead of the curve on lesbian, gay, bisexual, and transgender issues.” Although obstacles remain evident in Wall Street work culture, Goldman’s medical plan has covered gender-affirming surgery and hormone therapy since 2007. Maeve DuVally is just the second Goldman employee to officially transition at work. Following a company-hosted LGBT event, she decided to come out. “[F]rom a very early age,” DuValley says she had known she was transgender, “But I never, on a conscious level, thought that there was anything I could do about that.”
[/bs-content][bs-link link=”” source=”New York Times”]

[bs-title]Maysoon Zayid joins cast of ‘General Hospital'[/bs-title][bs-content]Longtime raceAhead readers know Zayid for her work as an advocate for equity and inclusion and her non-nonsense, comedic chops–her 2013 TED Talk helped the Palestinian-American actress and comedian to raise awareness of her mad skills and the lack of representation for people with disabilities in film and television. “People with disabilities are the largest minority in the world, and we are the most underrepresented in entertainment,” she says. But now, as a no-nonsense attorney representing some shady character in some sort of custody battle, she’s become what she asked for, a powerful character on an iconic show, who just happens to have a disability. “Thank you for believing in me and for being integral in making my dream come true,” she tweeted the GH cast. Just as a reminder of what a badass Zayid is, she once defied death threats to perform a free show to delegates at the 2016 Republican National Convention.[/bs-content][bs-link link=”” source=”Brianne Amira on Medium”]

[bs-title]The gazebo where Tamir Rice was killed has been moved to Chicago[/bs-title][bs-content]Samaria Rice, Tamir’s mother, knew the gazebo where her son was killed could not stay in Cleveland. Working with artist Theaster Gates and his nonprofit Rebuild Foundation, it’s been moved and reassembled, shingle by shingle, as the centerpiece of a temporary exhibit at the Stony Island Arts Bank, on Chicago’s South Side. The gazebo will debut this week for what would have been Tamir’s 17th birthday. Stony Island will host the gazebo for two years, which will be surrounded by a community garden. “We are humbled to house and have the opportunity to construct a space for community healing and reflection that honors the life and memory of Tamir Rice,” said Gates in a statement.[/bs-content][bs-link link=”” source=”Hyperallergic”]

On Background

[bs-title]The complicated definition of innocence[/bs-title][bs-content]Law & Order re-runs aside, today, very few criminal cases go to trial anymore. Instead, mostly innocent people are now forced into plea bargains, the often bizarre dance between a person stuck in the criminal justice system and the system that wants to extract some measure of efficient justice. But the horse-trading between prosecutors and defendants has changed dramatically. “American legislators have criminalized so many behaviors that police are arresting millions of people annually–almost 11 million in 2015,” explains The Atlantic‘s Emily Yoffe in this deep dive. Plea deals are often capricious, and thanks to them, now millions of Americans have criminal records.[/bs-content][bs-link link=”” source=”The Atlantic”]

[bs-title]Four writers on being ‘on their meds'[/bs-title][bs-content]There are some 44 million people living with some sort of mental illness, and roughly 19 million are being treated with some combination of medication and therapy. The stigma associated with medication remains profound, and the casual way people talk about psychiatric states–are you crazy?–can further isolate people with mental illness. “I was a 26-year-old undergraduate who could barely manage to eat or shower once a day. I eventually admitted to myself that I was not well,” writes Anthony James Williams. “But I did not know anyone black who was on medication for their mental health, and asking for any form of assistance made me feel weak.” It also means making it work at work, depending on your needs. “It’s awkward to bust out a pill bottle in the middle of a small office or classroom, but it would be more awkward to have a bipolar episode at work,” writes Diamond Sharp.[/bs-content][bs-link link=”” source=”The Outline”]

[bs-title]On being the great-granddaughter of an Igbo slave-trader[/bs-title][bs-content]This surprising and important piece from Adaobi Tricia Nwaubani, explores the complex history of the slave trade from the Nigerian side of the equation. Some of this we already knew: Long before the Europeans took trafficking in human beings to scale, the Igbo people enslaved other Igbo people as punishment for crimes, indebtedness, or as spoils of war. But what is extraordinary to learn is the degree to which the amplification of demand impacted the community, and how the descendants of formerly enslaved Igbo people are still stigmatized to this day. For the Nigerian people who are lucky enough to know their own history, it can get complicated. “African intellectuals tend to blame the West for the slave trade, but I knew that white traders couldn’t have loaded their ships without help from Africans like my great-grandfather,” she writes.[/bs-content][bs-link link=”” source=”New Yorker”]

[bs-content]Tamara El-Waylly helps produce raceAhead and assisted in the preparation of today’s summaries.[/bs-content]


[bs-quote link=”” author =”–Random country music fan, angry at Beyonc?’s 2016 performance”]SHE DOES NOT BELONG!!!! When have they ever invited ANY country singer to their BET awards… NEVER!!!!STOP IT. I bet Alan, George and Vince think CMT has gone NUTS. [/bs-quote]

FUCT Clothing Can Now Get Trademark Protection, Supreme Court Rules

The U.S. Supreme Court has ruled in favor of a streetwear clothing line that sounds a lot like the F-word can trademark its name.

In a battle for free speech, the high court on Monday said that Los Angeles-based company called FUCT can receive federal trademark protection after the U.S. trademark office said the company violated the law over “immoral or scandalous” trademarks.

The ruling is considered a victory for longtime streetwear clothing designer and artist Erik Brunetti who co-founded his company selling hooded sweatshirts, loose-fitting pants, shorts, and T-shirts in 1990 with a shrewd name questioning authority and society. The FUCT name is short for “FRIENDS U CAN’T TRUST.”

In a 44-page opinion, the Supreme Court struck down a 100-year-old provision of a federal law banning registration of proposed trademarks that are scandalous if they are “shocking to the sense of truth, decency, or propriety” or “disgraceful, offensive, disreputable.”

In a mix between liberals and conservatives, Justices Elena Kagan, Samuel Alito Jr., Clarence Thomas, Ruth Bader Ginsburg, and Neil Gorsuch ruled in favor. They argued that the statute doesn’t stand because it “infringes the First Amendment” and “disfavors certain ideas.”

Despite its counterculture marketing, whenever Brunetti tried to register the company’s name with the federal trademark, he was told it was too scandalous and offensive.

In the favoring opinion, Kagan said while the company is pronounced as four letters, one after the other: F-U-C-T. “But you might read it differently, and if so, you would hardly be alone,” she said. The court said the century-old provision of the law is “viewpoint discrimination.”

“What is scandalous?” Kagan wrote. “It goes against society’s current view of morality, and that is viewpoint discrimination.”

Meanwhile, conservative Chief Justice John Roberts, and liberal Justices Stephen Breyer and Sonia Sotomayor offered partial dissents. The 6-3 ruling in the case, Iancu v. Brunetti, could lead to more requests to trademark words that may be considered lewd, profane, and vulgar. Breyer wrote that “these attention-grabbing words,” especially appearing in public sapces, could lead to “the risk of verbal altercations or even physical confrontations.”

“Just think about how you might react if you saw someone wearing a t-shirt or using a product emblazoned with an odious racial epithet,” Breyer said.

However, Justice Alito Jr. wrote in a concurring opinion that the high court’s opinion “is not based on moral relativism but on the recognition that a law banning speech deemed by government officials to be ‘immoral’ or ‘scandalous’ can easily be exploited for illegitimate ends.

Alito Jr. also encourages Congress to adopt “a more carefully focused statute that precludes the registration of marks containing vulgar terms that play no real part in the expression of ideas.” He also admitted that such trademarks “serves only to further coarsen our popular culture,” and that the justices are “not legislators and cannot substitute a new statute for the one now in force.”

In an interview on a streetwear magazine site earlier this month, Brunetti said a Supreme Court ruling in his favor will give him a sense of freedom.

“I’ll be able to shut down the tremendous amount of bootlegging that’s been happening for years. It will also enable me to eventually sell the brand if I so choose,” Brunetti said. “In regards to other brands, it’s going to allow Jason Dill to register his brand (F—— Awesome). Therefore he’d be able to expand from where they already are, for example.”

Brunetti also told the site that he and his co-founder, pro skateboarder Natas Kaupas, thought it would be clever to call the brand FUCT and present it as very corporate.

“So you had to question the pronunciation of the name based on the way it looked,” Brunetti said. “It was very premeditated. We didn’t wanna just call it FUCT to make it look crazy. We wanted it to be confusing.”

More must-read stories from Fortune:

–Trump’s MAGA rallies cost big bucks–and cities foot the bills

Black women voters will be central to the 2020 election, experts predict

–Can Trump fire Fed Chair Jerome Powell? What history tells us

–Alexandria Ocasio-Cortez’s message for democrats after “boy bye” tweet

–What you need to know about the upcoming 2020 primary debates

Get up to speed on your morning commute with Fortune‘s CEO Daily newsletter.

Are Too Many Democrats Running for President? Voters Are Tuning Out

Nearly two dozen Democratic presidential candidates have crisscrossed the country for six months selling their vision for the United States. But, on the eve of the first debates in the campaign , a new poll from The Associated Press-NORC Center for Public Affairs Research shows most Democratic voters haven’t fully tuned in.

Only 22% of Democrats registered to vote say they know a lot about the candidates’ positions, while 62% say they know a little. And only 35% say they’re paying close attention to the campaign, with almost two-thirds saying they’re paying some or no attention.

“It’s kind of a blur,” said Maggie Banks, 32, of suburban Denver, who has two young children and only has a chance to glean a few details about the race while listening to National Public Radio during her commute.

Banks said she has only a “vague” idea of who’s running and didn’t realize her state’s senior senator, Michael Bennet, or former governor, John Hickenlooper, were in the race.

Voters like Banks comprise the vast majority of the Democratic electorate, implying there’s great potential for change in what’s essentially been a static race to date. Former Vice President Joe Biden holds a solid but not dominant polling lead , followed by some combination of Sens. Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Kamala Harris of California and Mayor Pete Buttigieg of South Bend, Indiana. Behind them are a wide range of contenders from Senate veterans like Amy Klobuchar of Minnesota to lesser-known candidates like internet entrepreneur Andrew Yang.

The first big opportunity for candidates to break out of that muddle comes with the two nights of debates this week beginning Wednesday. Two groups of 10 candidates will get a chance to take their messages directly to a national prime-time audience from the stage in Miami.

The Democratic field is enormous and unprecedentedly diverse. It features several women, multiple candidates of African and Asian descent, one Latino and a gay man, Buttigieg, who at age 37 is less than half as old as the front-runner, Biden.

But majorities of Democrats say those characteristics make no difference to their level of enthusiasm about a presidential candidate. Four in 10 Democratic voters said they would be more excited about voting for a woman for president, and 36% said the same of a younger candidate. Only about a quarter were more excited at the idea of supporting a candidate who is black or Latino, while roughly 2 in 10 said they’d be more excited to support an Asian candidate or lesbian, gay or bisexual candidate.

What Democrats want the most is experience in elected office: 73% cited that as a quality they’re looking for in a presidential candidate.

Benji Grajeda, 50, of Santa Ana, California, was once excited at the idea that Hillary Clinton could become the first female president. Now he just wants stability.

“I don’t think it matters, gender,” said Grajeda, instead citing experience in office as his top priority because “Trump has no experience.”

“I never really thought about it until he won — he’s just not qualified,” Grajeda said.

There’s a large appetite for the campaign among Democratic voters, 79% of whom say they’re interested in the 2020 race. Republicans are only slightly less interested, with 70% reporting interest. But only about 3 in 10 voters overall say they’re paying close attention more than seven months before the first votes are cast in the Iowa caucuses.

Some, like Charles G. Cooper, 57, of Orlando, Florida, say they figure it wasn’t worth tuning in too far before this week’s debates, which they expect to help shape the field. Cooper supports Biden — “I’m an Obama guy, and he was the vice president,” Cooper said — but he knows the front-runner has a history of gaffes during his past races and wants to see how he handles them.

Adam Pratter, 43, of San Diego, is also being strategic. He has studied up on the five candidates leading in the polls but studiously ignored the rest.

“Unless something extraordinary happens, they’re not going to make it,” Pratter said.

The stakes are high in this week’s debates and another set that will follow in late July . After that, it gets tougher to get onto the main stage.

For the third debate in September, the Democratic National Committee is requiring candidates to receive donations from 130,000 or more individuals and poll at 2% or higher in three polls. Analysts and many campaigns think that — and the difficulty raising money if a candidate does not continue to qualify for the debate stage — will winnow the field down quickly.

Banks hopes so. Her husband is a fan of New Jersey Sen. Cory Booker, and she likes Sanders, but she doesn’t know how she could learn enough to judge the current, sprawling field.

“Some people will be weeded out as we go along, and I want that to happen so I can look at everybody’s ideals and experience,” Banks said.

More must-read stories from Fortune:

–Trump’s MAGA rallies cost big bucks–and cities foot the bills

Black women voters will be central to the 2020 election, experts predict

–Can Trump fire Fed Chair Jerome Powell? What history tells us

–Alexandria Ocasio-Cortez’s message for democrats after “boy bye” tweet

–What you need to know about the upcoming 2020 primary debates

Get up to speed on your morning commute with Fortune‘s CEO Daily newsletter.

Woman and Three Children Found Dead at U.S.-Mexico Border

The Latest on four bodies found at the U.S.-Mexico border (all times local):

10:30 a.m.

Authorities say four people, including three children, found dead in South Texas near the border with Mexico likely died of dehydration and heat exposure after crossing the Rio Grande into the U.S.

A law enforcement official close to the investigation told The Associated Press the four were overcome by the heat and foul play is not suspected. The official spoke on condition of anonymity because the person isn’t authorized to speak publicly about the bodies found Sunday.

Authorities say a woman in her early 20s, a toddler and two infants were found dead by U.S. Border Patrol agents at or near a park in Mission that borders the river.

Investigators suspect they had died days before being discovered.

Hidalgo County sheriff’s Sgt. Frank Medrano says the area is commonly used by migrants entering the country illegally.


9 a.m.

A spokesman for a Texas sheriff’s department says the bodies of a woman in her early 20s, a toddler and two infants were found in an area of South Texas near the Mexican border that is a common route for migrants entering the country illegally.

Hidalgo County sheriff’s Sgt. Frank Medrano told The Associated Press Monday that bodies were found Sunday in or near Anzalduas Park, which borders the river in the city of Mission.

The FBI is leading the investigation into the deaths because the park is on federal land.

Authorities believe they may have been dead for days before being discovered. The names of the four have not been released and authorities are working to determine their country of origin.


7:45 a.m.

A sheriff in South Texas says Border Patrol agents have discovered the bodies of four people, including three children, within a wildlife management area near the border.

Hidalgo County Sheriff Eddie Guerra tells the McAllen Monitor that the dead appeared to be two infants, a toddler and a woman in her early 20s. The sheriff tells the newspaper that they may have been dead for a few days by the time they were discovered Sunday in Las Palomas Wildlife Management area near the Rio Grande River.

The newspaper reports that area is known locally as El Rincon del Diablo, or the Devil’s Corner, and is often used for illegal border crossings.

The sheriff said on Twitter that the FBI will investigate the deaths.

More must-read stories from Fortune:

–Trump’s MAGA rallies cost big bucks–and cities foot the bills

Black women voters will be central to the 2020 election, experts predict

–Can Trump fire Fed Chair Jerome Powell? What history tells us

–Alexandria Ocasio-Cortez’s message for democrats after “boy bye” tweet

–What you need to know about the upcoming 2020 primary debates

Get up to speed on your morning commute with Fortune‘s CEO Daily newsletter.

Why Microsoft’s Ban of Rival Slack May Be a Mistake—Data Sheet

Happy Monday. Aaron here, back from vacation, essay writing and curating this week, as Adam goes off on a break.

Catching up on all the tech news while I was away, I was sent spiraling down memory lane by Friday’s GeekWire scoop that Microsoft maintains a list of “prohibited and discouraged technology.” Said list is said to ban popular work messaging app Slack (which we use at Fortune) and online grammar checker Grammarly, while discouraging use of Google Docs, Amazon Web Services, and cloud security company PagerDuty. The various rationales offered in the document cite security concerns, but also the obvious rivalry aspects. For example: “Slack Enterprise Grid version complies with Microsoft security requirements; however, we encourage use of Microsoft Teams rather than a competitive software.” Microsoft declined to comment to GeekWire.

There’s a long history of tech companies eschewing the products of their competitors. Google stopped its employees from using Microsoft Windows a decade ago, also citing security issues, and Microsoft discouraged use of the Apple iPhone early in the smartphone era.

Personally, I was sent back to my tenure at Yahoo, when CEO Marissa Mayer only allowed use of the company’s ad-laden, performance-challenged web client for all work email. The proffered explanation was that the limitation would prompt employees to offer feedback-and likely push for rapid improvements-to help the engineers on the web email team better the product. That happened some, but it also sapped the productivity of people in jobs that depended on robust email communications capabilities, like, say, salespeople-or reporters.

The new banned list at Microsoft is a bit surprising given that part of CEO Satya Nadella’s successful strategy for reviving the software giant has been to embrace other platforms and abandon the only-made-here mindset. At the very least, deeply knowing the competition would help ensure Microsoft’s own products keep pace. Historically, that may have been part of the problem behind what Bill Gates just called “one of the greatest mistakes of all time.” Appearing at an event at VC firm Village Global last week, Gates admitted he made that all-time whopper by failing to create the mobile operating system alternative to Apple’s iOS. Instead, Google, where co-founder Sergey Brin was an early fan and avid user of the iPhone, grabbed the other spot. Gates called it a $400 billion mistake.

Hopefully, history won’t repeat, despite the bans.

Aaron Pressman


This time is different. It’s been a banner beginning of summer for bitcoin investors, as the cryptocurrency on Monday traded above $11,000 for the first time in more than a year. Still a ways to go before bitcoin surmounts its previous high around $20,000 reached at the end of 2017, however.

Virtually tit for tat. President Trump may have pulled back from standard military attacks on Iran last week, but he allowed a cyberattack on the country’s rocket and missile launch computer systems to go forward, The Washington Post reports. Then on Saturday, the Department of Homeland Security warned U.S. businesses to beware of Iranian computer strikes. “These are the guys that come in and they burn the house down,” Christopher Krebs, director of the Cybersecurity and Infrastructure Security Agency at DHS, said. The administration is also considering a further crackdown on the Chinese tech sector by requiring that all equipment used in U.S. 5G mobile networks be designed and manufactured outside of China. Even European telecom gear makers Nokia and Ericsson manufacture their products in China.

Follow the money. Elsewhere in the nation’s capitol, two senators plan to introduce legislation on Monday that would force tech companies like Google and Facebook to disclose the value of the user data they collect. Democratic Sen. Mark Warner and Republican Sen. Josh Hawley announced their bill on Sunday night, dubbed the Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data, or DASHBOARD, Act on Sunday night.

Keeping me up at night. A few new entries in the files of things to be concerned about. A New York Times story questions why Amazon allows counterfeit book listings. And The Los Angeles Times debates the collection of video by Amazon and Walmart’s in-home home delivery services.

Size doesn’t matter. Also a couple of news bits on the Raspberry Pi beat. NASA says the hackers who last year stole data about upcoming Mars missions cracked network security by breaching an unauthorized Pi computer connected to its network at the Jet Propulsion Laboratory in Pasadena. On Monday, the nonprofit Raspberry Pi Foundation unveiled its fourth generation model of the credit card-sized computer. Starting at $35, the Raspberry Pi 4 gets faster insides, more memory, and more ports.

Start saving your pennies. We’ve got a new leak about Apple’s rumored 16-inch laptop. The larger version of the MacBook Pro will have the highest screen resolution ever on an Apple laptop at 3072 pixels by 1920 pixels and will cost over $3,000.


Sometimes it feels like Silicon Valley is leading a charge against the value of experienced employees, but that’s not the case with venture capitalist Jeff Jordan of Andreessen Horowitz. In a profile of the seasoned, 60-year-old investor, Fortune’s Polina Marinova examine’s Jordan’s approach that led to winning early investments in Airbnb, Pinterest, and Instacart, among others. His prior work experience at stops including Disney and eBay were key to recognizing the winners, she writes. For example:

Jordan’s first reaction to Airbnb was that it was “the stupidest idea I had ever heard.” It was 2011, and he was at an Allen & Co. tech-investing meeting in Arizona. Brian Chesky, then a relatively unknown entrepreneur, was explaining his business, and Jordan couldn’t help mentally listing the number of risks associated with opening up one’s home to strangers. Then it hit him. Airbnb’s fast growth and online marketplace that matched homeowners with renters reminded him of eBay. It was, he says, “a d?j? vu experience.” Having worked in top positions at eBay for seven years, he literally had seen this picture before.


I will not end my first newsletter back from vacation with tales of the delicious meals, amazing sites, and beautiful art I saw in Italy. Instead, distract yourself with Travel + Leisure’s list of the 12 most romantic vacation destinations in the world. And until tomorrow, arrivederci.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.