Desert Storm Begins
Rule Breaker. The year 1991 dawned. The first news of the new year was, as expected, the president's New Year's address. President Roh, who seemed to have received a massive confidence boost through Yoo Jae-won, appeared truly imposing. He declared that the local elections this year would serve as a milestone for democratic development, adding that the government would strive for balanced regional growth. It sounded as though he was implying that voting for the ruling party would bring generous regional projects.
Yet the television did not feature only President Roh. North Korea's Kim Il-sung New Year's address also appeared. In his directly delivered speech, Kim Il-sung proposed holding a "National Unification Political Consultative Conference" involving representatives from both Koreas, along with various political parties and social organizations. He was essentially suggesting a pause in the competitive phase to initiate dialogue first. Yoo Jae-won thought the timing was rather convenient. The reason became clear on January 16, when the entire world witnessed it with their own eyes.
"Dozens of fighter-bombers are taking off from the USS Independence, which has entered the Gulf. Additionally, the missile destroyers escorting the carrier have been continuously launching Tomahawk cruise missiles for the past thirty minutes." CNN correspondent Mark raised his voice, microphone in hand. Behind him, fighter jets streaked across the sky trailing blue flames, while from a nearby destroyer, yellow-flamed missiles soared vertically before banking ninety degrees and streaking toward Iraq.
In the early hours of January 16, after Iraq ignored the final United Nations ultimatum to withdraw from Kuwait, the famous Operation Desert Storm had begun. For the next several days, the world would witness just how terrifying an air force armed with cutting-edge technology could be in modern warfare. Starting with stealth aircraft bombing Baghdad, waves of Tomahawk cruise missiles and B-52 strikes would continue relentlessly for two weeks. Iraq, gripped by fear of missiles arriving from unknown directions, fired anti-aircraft guns desperately into the sky, yet few achieved any meaningful intercepts.
Iraqi President Hussein had firmly believed that Baghdad's air defenses rivaled the ironclad protections of Moscow, Pyongyang, and Warsaw. Western assessments had been similar. However, once Operation Desert Storm commenced, hundreds of cruise missiles and stealth bomber strikes punched holes through the defenses, shattering that confidence. Iraq's only response to the relentless day-and-night bombing was Scud missiles. They launched dozens in retaliatory strikes against Saudi Arabia and Israel. Yet the Scuds proved largely ineffective. Most were intercepted by pre-positioned Patriot missiles, and those that reached their targets caused minimal damage due to their large circular error probable. Moreover, by deploying missiles while air superiority had already been lost, their launch positions were exposed. Special forces and U.S. Air Force units subsequently destroyed the Scud batteries.
Even before ground troops were committed, the sight of Iraqi forces being swept away left an unimaginable shock on China, North Korea, and other anti-American nations. They had witnessed that a nation could be dismantled without deploying ground forces that would suffer heavy casualties, simply through overwhelming missile barrages. China's leadership, gripped by the fear that they would meet Iraq's fate if they did not come to their senses, accelerated the modernization of the People's Liberation Army while fully opening their previously sealed economic system. North Korea followed suit. As a far more severe dictatorship where the leader's dignity took precedence over the people's welfare, North Korea would likely have only bowed its head once U.S. carriers appeared in the East Sea had Kim Il-sung maintained his confrontational stance. Instead, his New Year's address advocating dialogue allowed for a swift shift in posture.
Thanks to this, President Roh's diplomacy, which had been pursuing northern engagement policies beginning with diplomatic ties to the Soviet Union, gained powerful tailwinds. Behind-the-scenes contacts for establishing relations with China began, and high-level talks with North Korea initiated discussions on exchanges and cooperation in sports.
The ID Group was also responding in real time to Operation Desert Storm, the opening act of the Gulf War.
"As you predicted, Chairman, oil prices are surging." With the start of the Gulf War and its display of overwhelming firepower, oil prices had instead begun to rise. If Iraq were swiftly defeated and the war concluded early, Middle Eastern stability would return and prices should fall. At the outset of Operation Desert Storm, oil prices had been trading sideways. The renewed surge occurred because Iraq, unable to withstand the missile and bomber onslaught, began acting recklessly. Iraqi forces, unable to hold their positions, had started withdrawing from Kuwait. Yet during the retreat, they began systematically destroying Kuwait's oil wells. Red flames and black smoke rising high into the desert sky were captured by war correspondents' cameras. The pressure from the wells was so intense that the fire columns exceeded one hundred meters in height. Even if Kuwait were liberated, the destruction of its oil fields meant oil prices would not stabilize anytime soon.
"Should we bet on the rise even now?" Oil prices were climbing. Since the destruction of Kuwait's oil wells could not be prevented, there was no way to stabilize prices for several months even if the war ended early. With Kuwaiti and Iraqi crude exports halted by the conflict, OPEC member nations had already maximized their production increases. Therefore, they needed to purchase futures or call options. This was the assessment of the conservative Vincent Greenhill.
"No. Once prices exceed thirty-four dollars, establish short positions. The amount... use only the funds raised from general investors this time."
Yoo Jae-won issued an order that defied conventional wisdom.
"That would be a little over four hundred million dollars. Understood."
Vincent Greenhill naturally wanted to ask for the reasoning behind the decision. However, since the investment was limited to just four hundred million dollars, he simply accepted it. ID Investment's accounts still held 6.7 billion dollars after taxes. Additionally, starting January 3, they had raised investment capital from individual investors, totaling a staggering 300 billion Korean won—four hundred million dollars. Numerous investments in the hundreds of millions had poured in, along with many exceeding a billion. Of course, there were countless participants investing less than a million won. Thanks to this enthusiasm, within less than a month of opening the investment recruitment account, the total raised had surpassed 300 billion won. The Hongkong and Shanghai Banking Corporation, which had become ID Group's primary bank after a fierce bidding war, could barely contain its joy at striking gold immediately after signing the contract.
The investment period for this financial product was one year, with no option for early termination. After one year, investors could decide whether to liquidate or reinvest based on the results. Yoo Jae-won had not ordered short positions without reason. America's motivation for launching the Gulf War was not pity for Kuwait, but securing a stable oil supply. Stable crude supply meant stable oil prices, and the United States was prepared to do whatever necessary to achieve that. The multinational ground forces soon to be deployed numbered in the hundreds of thousands, with war expenditures reaching hundreds of billions of dollars. They would not tolerate oil prices undermining their war-making capability. Therefore, the White House would announce extraordinary measures if oil prices crossed a certain threshold.
On January 19, 1991, the United States announced it would release 33 million barrels from its strategic petroleum reserve to stabilize prices. Furthermore, it declared that additional reserves would be released if prices did not stabilize. With U.S. reserves totaling 580 million barrels, this sent a powerful signal to the market. Japan, Germany, France, and others also announced they would release their stockpiles in coordination with the U.S. That day, oil prices plummeted by eleven dollars.
Once again, Yoo Jae-won's prediction had proven correct. Naturally, his credibility within ID Investment, including with Vincent Greenhill, grew even stronger. Yet Yoo Jae-won himself felt little excitement, as he was merely managing other people's money and collecting fees. What brought him some relief was confirming that the major trends he knew had not deviated. However, this did not mean his vigilance had slackened. The strategic petroleum reserve release had originally been scheduled for the 17th but had been delayed by two days for unknown reasons. Previously, futures prices had changed; now even dates were shifting. If he had invested all of ID Investment's available capital based on his memory, they might have suffered significant losses. He resolved that from now on, he would avoid investments where timing was absolutely critical, such as futures or options, unless absolutely necessary.
What he could truly trust was technology alone! Therefore, ID Group's operational strategy would reduce financial product investments and instead focus on concentrated investments in venture companies and cutting-edge technologies.
"Please investigate companies holding patents for the technologies I'm about to send, or those in market-leading positions. Significant capital may be invested, so be thorough."
Network equipment, CMOS and CCD sensors, non-volatile memory technology, miniature GPS, touchscreens, LED, LCD, instant photo printing, low-power CPUs—the list went on, encompassing numerous and diverse technologies. To Vincent Greenhill, these seemed impossible to categorize under a single heading. In his common sense, he could not fathom Yoo Jae-won's intentions. Still, since they were all technologies within the IT category, he did not find it strange. Moreover, ID Investment had hired numerous experts to compensate for his own lack of IT knowledge. Since this was the chairman's directive, even if he oversaw the investigation, the actual work would be handled by IT specialists, so there was no burden.
"By the way, we still haven't heard from Microsoft, have we?"
"No, Chairman. They're maintaining complete silence."
On Christmas Eve, Yoo Jae-won had sent Microsoft a grand gift in the form of an acquisition proposal. Yet Microsoft remained silent, for reasons unknown.
"I think we've waited long enough. Proceed with a hostile takeover declaration and begin unlimited purchases of Microsoft shares on the stock exchange."
Yoo Jae-won's reasons for wanting Microsoft were clear. Their world-class development team, countless computer-related patents, and globally extended sales network—all contained nutrients that would rapidly enhance ID Technology's capabilities if acquired. Success in the acquisition would multiply the value of the Android operating system by ten times, perhaps even a hundred times or more.
"Yes, Chairman!"
Vincent Greenhill responded crisply, having finally received a mission worthy of his abilities, and the call ended.
Ring ring!
Coincidentally, just as he finished the ID Talk call, the telephone rang.
"Oh?"
Strangely, Yoo Jae-won felt as though he already knew who was calling. Though the phone lacked caller ID, the feeling was unmistakable. It had to be Microsoft. This was not the first time a tiger appeared the moment it was mentioned. This time too, Yoo Jae-won was certain.