Oil Futures and the Heritage Foundation
About ten minutes after visiting the Information Super-Highway store, Yoo Jae-won realized there wasn't much reason to linger. It was a single-story shop, after all. Remington handled inventory and daily closings with his usual efficiency, so there was no need for the boss to dig through the warehouse himself. Instead, they had decided to close the store completely during lunch and treat everyone to a steakhouse meal. If this kept up, it might become a tradition—whenever the president visited, a steak party would follow.
"I'll leave it to you."
"Yes, sir. I'll make sure everyone leaves stuffed like a satisfied cat."
Yoo Jae-won didn't join the steakhouse outing. He left the treat in Remington's capable hands and headed upstairs to the second-floor office of the Manhattan flagship store with Kim Dae-seok. There, tucked away from prying eyes, was a highly confidential office—the Manhattan branch of ID Investment. Though the name sounded grand, it was really just a small room attached to the flagship store's office. In Manhattan, where real estate and office rents were exorbitant, it made perfect sense for the still-small ID Investment to piggyback on the store's space. Legally and operationally, however, the flagship store and ID Investment were completely separate companies, sharing only the same owner.
"Hello, Mr. Greenhill. This is our first time meeting in person, isn't it?"
"Yes. You're even younger than I imagined. Still, I've seen you so often on television that your face feels quite familiar."
The white-haired gentleman shaking Yoo Jae-won's hand was Vincent Greenhill, the sole employee of ID Investment's Manhattan office. Among the three brokers Remington had vetted, he was the only one who had ultimately signed a contract with ID Investment.
"I'll take that as a compliment."
"It is, of course. Is there anyone else your age who has caused such a nationwide—actually, worldwide—sensation?"
Though this was their first in-person meeting, they had spoken on the phone several times, so the conversation flowed easily. After a friendly handshake, they sat across from each other at the table.
"You're curious about the investment results, I imagine?"
Vincent Greenhill cut straight to the point the moment they sat down. Of course he was. Yoo Jae-won nodded firmly. Vincent then lifted the Egg PC from the desk with one hand while carrying the keyboard and mouse with the other, shifting everything into position. The computer was already powered on, its screen displaying the Android Alpha desktop.
"Ever since this thing arrived, work has become much easier."
Vincent skillfully maneuvered the mouse and double-clicked the ID Office spreadsheet icon on the desktop. A neatly organized investment performance report appeared, broken down by date. The document was meticulously detailed. It recorded how the initial $100,000 invested in oil futures had dipped to $79,000, then noted the additional $100,000 Yoo Jae-won had sent. The numbers were substantial enough to require several scrolls. As the pages moved, the balance gradually climbed past $179,000. After five more pages, the final figure appeared.
"$325,000 as of January 2, 1990," Vincent announced proudly.
Nearly doubling one's money in the volatile oil futures market was certainly something to boast about.
"Wow, that's better than I expected."
Yoo Jae-won was genuinely pleased. He had hinted that oil prices would rise by the end of the year, but he hadn't specified how high. Achieving nearly double the return based on nothing more than a vague prediction of an increase was proof of solid skill. More importantly, Vincent had taken his words seriously and concentrated his investments on the rising-price scenario. That kind of conviction was exactly what Yoo Jae-won liked.
"The principal was $200,000, so the profit is $125,000?"
"That's correct. Thanks to your tip, sir."
"You're the one who actually executed the trades. Let's split the credit evenly. I'll give you half—$62,500—as your bonus."
"Pardon?"
America was the world's most advanced nation. In 1990, its per-capita GDP stood at an impressive $35,000. That was the national average; the top 10% of earners typically made two or three times that amount. As ID Investment's futures trading manager, Vincent already received a substantial salary. Receiving an additional $62,500 bonus on top of that was beyond anything he had anticipated. At this rate, it was almost as if he were keeping everything except the original principal. The sum felt disproportionately large compared to the work he had done. For a moment, he wondered if this was somehow connected to some unusual financial crime.
"In exchange, I'm planning to entrust you with a rather heavy and important task going forward."
"An important task?"
The mention of a weighty responsibility helped Vincent regain his composure. With his extensive experience in futures trading, he had a fair idea of what Yoo Jae-won was about to say. After all, he had been headhunted by Remington of ID Technology and brought into ID Investment, given $100,000 to invest in oil futures. Before receiving the funds, he had signed a contract filled with stern warnings and submitted his personal information to the company. Everything had been legal and aboveboard. This wasn't some eccentric rich person's whim or involvement with shady back-alley organizations.
"Is this another oil futures investment? In that case, the amount of capital will be significantly larger than before."
Yoo Jae-won was slightly surprised by Vincent's deduction but nodded readily.
"Yes, that's correct!"
Vincent's reasoning was straightforward. The owner of ID Investment was Yoo Jae-won, the young genius businessman who had dominated the entire United States from last winter through the start of the new year. Most notably, he had secured a $200 million settlement in the lawsuit against Microsoft—an unprecedented record for corporate damages. With that kind of wealth and such keen interest in oil futures, the answer was obvious.
"I expect the oil futures market to experience extremely sharp price movements this year."
"An upward movement, I presume?"
"Yes. But the sharp spike won't last. It'll be like a frog leaping up and then coming back down—after hitting its peak, prices will plummet back to previous levels."
It would be a temporary phenomenon. Yet in the futures market, such drastic price swings created enormous variables. No one in the room understood that better than Vincent Greenhill. If Yoo Jae-won's prediction was accurate, they could reap an enormous profit in a single stroke. Of course, the futures market was a perfect zero-sum game—someone would suffer massive losses. But that was simply how the futures market worked. One person's loss was another's gain.
"So before summer ends, I intend to invest a total of $100 million in the oil futures market."
"Whoa!"
Vincent had expected something big, but the number still drew an involuntary gasp. Having spent decades at the New York Mercantile Exchange, he had brokered deals worth hundreds of millions. Those, however, had been transactions for large investment firms, not positions he had personally chosen and funded. Vincent had tried investing his own money based on his own judgment before, but the results had been poor—painful losses. After confirming the limits of his own abilities, he had focused solely on brokerage rather than proprietary trading.
"Of course, I won't put the entire $100 million in at once. I'll start with $30 million and add the remaining $70 million around summer."
Oil prices, which had shown a slight upward trend through 1989, began declining in the early 1990s. The current price hovered just above $22 per barrel and was expected to fall below $18 by summer. Then war would break out, sending prices surging—the Gulf War, which would showcase America's modern style of warfare to the world. The coalition's massive offensive, Operation Desert Storm, would become so famous that even elementary school students would know of it. At the same time, CNN, which broadcast the war live from the front lines, would rise to prominence. The images CNN delivered straight from the battlefield would reach living rooms across America, making the brutal conflict feel almost like a sporting event.
"May I ask what led you to that conclusion?"
Vincent, unable to comprehend Yoo Jae-won's thinking, asked despite the potential rudeness. No matter how carefully he studied the oil futures charts he received from Bloomberg, he could find no indication that prices would spike so dramatically.
"Heh, even if I explained it, you probably wouldn't understand easily. The conclusion comes from factors outside the market. That's why you won't find any signs on the charts no matter how hard you look."
"Pardon? Factors outside the market?"
"The U.S. economy is always solid, and the global economy continues its steady upward trajectory. Naturally, most of the energy required for that growth comes from oil. So what happens if there's suddenly a disruption in the crude oil supply? When demand is high, prices naturally rise, don't they?"
"A disruption in the crude oil supply… Are you suggesting OPEC will cut production?"
That had been the story during the first and second oil shocks. There would be no third oil shock in the future. After suffering greatly from OPEC's actions, the United States and Europe had worked tirelessly to reduce their dependence on the cartel. They had aggressively developed offshore fields and shale gas around the world, while simultaneously supporting pro-American, pro-Western regimes in the Middle East.
"No, that's not it. I can't tell you the details yet, but an event that will severely impact oil prices is going to occur."
Yoo Jae-won wanted nothing more than to tell him outright that the Gulf War was coming. But he was already doing things no one could imagine; revealing that he could precisely predict the future as well would be going too far. Vague explanations and results were the best approach.
"I'd like you to use oil futures and call options to maximize profits by taking the most leveraged positions possible. Also, once the big win happens, taxes will be substantial, so we'll need the most effective tax-saving strategies. If you need additional personnel, let Remington know in advance. Background checks take time, so it's best to give him a heads-up early."
"Pardon? Ah, yes! Understood."
$100 million was already an enormous sum, but investing it all in futures and call options was beyond anything Vincent could have imagined. He was still reeling. The mention of taxes made it clear that Yoo Jae-won was confident they would generate profits. Still, the task itself wasn't particularly difficult for Vincent. While this would be his first time deploying such a massive amount in a single bullish position, he had plenty of experience buying oil futures and options. The outcome, however, was impossible to guarantee. Even if the investment succeeded, the exact profit amount would depend on market conditions. If it failed, the answer was simple: $0. With such an extreme position, the $100 million invested in call options would become worthless scraps of paper, and the oil futures would vanish like a mirage the moment a margin call arrived. Nothing would be left.
"Once you're ready, contact the Seoul office. After we review the documents, the first tranche of $30 million will be wired."
"Yes, understood."
As he answered, Vincent found his own reaction strange. Logically, he should have tried to talk Yoo Jae-won out of this. But the man sitting across from him wasn't ordinary—he was Yoo Jae-won, the figure who had shaken not only America but the entire world.
"Ah, and please pay the utmost attention to security for this investment. By the time the full $100 million is deployed, the market will inevitably notice, but until then, nothing must leak."
"Of course."
Vincent nodded solemnly at the warning. It felt as though they were embarking on some grand operation together. At the same time, the thrill of moving $100 million with his own hands made his heart pound harder.
The conversation with Vincent Greenhill wrapped up in less than an hour, yet Vincent felt ten years younger. With the secret meeting concluded, Yoo Jae-won's schedule in New York was essentially complete. The Manhattan flagship store was running smoothly, Vincent's reliability had been confirmed, and the major assignment had been smoothly delegated. If Vincent had refused, things would have become complicated—thankfully, that hadn't happened. Now all that remained was to enjoy a relaxed day of shopping before boarding a direct flight from JFK International Airport back to Seoul. That had been the plan, at least, until Remington appeared with a troubled expression.
"Boss, it looks like we'll need to adjust a few items on tomorrow's schedule."
"What's going on?"
"Edwin Feulner, the president of the Heritage Foundation, says he absolutely must meet with you."
Hmm? The Heritage Foundation? It was the premier think tank in American politics and economics—highly conservative and closely aligned with the Republican Party. Its influence had peaked during Ronald Reagan's presidency. They were the ones who had labeled the Soviet Union the "evil empire," and rumor had it they were also behind the controversial Star Wars initiative. The information surfaced in Yoo Jae-won's mind without needing to access his Memory Palace; it was common knowledge.
Edwin Feulner had served as the Heritage Foundation's longest-tenured president, from 1977 to 2013. He also maintained fairly close ties with Korean chaebols and politicians. His relationship with the Bush administration was particularly strong. With so much on his plate, why would he suddenly request a meeting?
Could it be…?
Yoo Jae-won had a suspicion, though not a strong conviction. Then again, why was he even puzzling over this? He could simply ask Remington! The man was a former detective, after all—he wouldn't report something without knowing the purpose.