Chapter 132 - Leveraged Trading in Gold Futures
"Boss, as far as I know, Citibank's headquarters building is not on Wall Street, but about 7 kilometers away on Lexington Avenue," Su Zhixue said. "Then we'll just have to take a cab. You've never been to New York before — how do you know Citibank's headquarters isn't on Wall Street?" Lin Haoran asked curiously as they walked. "Because last year, something happened at Citibank's headquarters that caught the attention of media worldwide. All major Hong Kong news outlets reported it. If you didn't follow it back then, it might be hard for me to explain now, but once you see the building, you'll understand," Su Zhixue replied with a smile.
Lin Haoran nodded without pressing further, hailed a taxi, and headed toward Citibank's headquarters. It was indeed very congested in downtown New York at that time. Although the distance was only 7 kilometers, it took almost half an hour to get there. After getting off, Lin Haoran finally saw the magnificent structure. The Citigroup Center was one of New York City's most striking skyscrapers, standing 279 meters tall with its unique 45-degree slanted roof, dominating the skyline. What amazed Lin Haoran most was that the building was supported by four giant pillars instead of a traditional base structure. The building stood atop four 35-meter-high columns, each located at the center of each side of the building.
"Boss, look," Su Zhixue said, gazing up at the towering building. "This design led to a terrifying event last year. On August 30th, the U.S. weather bureau issued a warning: the strongest hurricane ever recorded in the Canadian maritime area, Hurricane Ella, had formed south of Bermuda and was heading toward New York. Within a day, the storm's wind speeds had increased to 205 km/h. Meanwhile, the Citigroup Center's chief engineer, William LeMessurier, discovered a terrifying design flaw — if wind speeds exceeded 133 km/h, the bolts holding the building together could shear, risking catastrophic collapse."
"As Hurricane Ella approached with speeds over 220 km/h, panic swept through New York. Citibank even alerted the police and Red Cross about the potential collapse. Fortunately, at the last moment, the hurricane veered northeast toward Canada, and New York was spared." Su Zhixue, although visiting the building for the first time, remembered the event vividly from news reports back in Hong Kong.
At that time, Lin Haoran had not yet transmigrated; his former self was still working at a small cement factory in Yuen Long and knew nothing of these events. "It's certainly an interesting story. Let's go inside this legendary building," Lin Haoran said with a smile.
The four of them entered the elevator. Thanks to Lin Haoran's Citibank Black Card, they passed security without any issues. In fact, security personnel promptly notified management via radio after verifying his card. After all, the Citibank Black Card symbolized a client with assets exceeding one hundred million dollars — not someone to obstruct.
Reaching the main reception lobby, a sharply dressed staff member approached. "Sir, may I assist you?" His name tag indicated he was a senior manager responsible for handling VIP clients. "I'd like to conduct a futures transaction involving over one hundred million U.S. dollars, and I want Citibank to handle it," Lin Haoran stated directly.
The middle-aged man immediately realized this was above his authority. "Sir, please wait in our VIP lounge. I will report this to upper management immediately," he said politely. Lin Haoran nodded, and they moved to the lounge area where a young lady promptly offered them drinks.
Barely a few minutes later, the senior manager returned. "Sir, I have informed our superiors. Citibank's Executive Vice President, John Reed, will personally receive you. I'll escort you to his office now," he said respectfully. "Thank you," Lin Haoran replied.
Given the transaction size, Lin Haoran preferred dealing with top management. Establishing a relationship with Citibank's leadership could open many doors. Lin Haoran and Su Zhixue followed the senior manager into the elevator, while Li Weiguo and Li Weidong remained in the lounge. There was no need to worry about personal safety here — Citibank's reputation spoke for itself. If they had ill intentions, no number of bodyguards could protect you anyway.
Soon, the elevator reached the 55th floor — the executive level. After walking down a long corridor, they arrived at an office door. Knock, knock, knock. A man in his forties opened the door. "Welcome, please come in," said John Reed with a warm smile.
Originally, the name "John Reed" hadn't triggered anything in Lin Haoran's mind. After all, it was a common name. But upon seeing him, memories stirred. Wasn't this the future Chairman and CEO of Citigroup? Lin Haoran remembered reading about Citibank's history in his past life. Although the memory was vague, seeing John Reed's face made everything click.
John Reed was an outstanding banker who, under his leadership, would transform Citibank into the world's largest commercial bank. His résumé was dazzling. He joined Citibank in 1965 when it was still known as First National City Bank. By 1968, he had become the bank's youngest Senior Vice President at age 30. From 1984 until his resignation in 2000, he served as Chairman and CEO of Citigroup and concurrently led Citibank's main subsidiary.
In total, he worked at Citigroup for 35 years, holding its highest office for 16 years. In front of him now stood the future head of Citigroup — someone even more influential than Shen Bi at HSBC. Lin Haoran hadn't expected to meet such a financial titan so early.
"I'm John Reed, Executive Vice President of Citibank. May I have your name, sir? It's rare to meet such a young billionaire," Reed said warmly, shaking Lin Haoran's hand. "My name is Lin Haoran. I come from Hong Kong and currently serve as Chairman of two listed companies there. I've chosen Citibank because of your excellent reputation both in Hong Kong and worldwide," Lin Haoran replied with a smile.
"Please, have a seat. Would you like something to drink?" "No, thank you," Lin Haoran declined politely. "I've traveled to Hong Kong a few times. Citibank's history in Hong Kong is very long — we began operations there as early as 1902. Hong Kong is an important market for us. Thank you for choosing us, Mr. Lin. May I ask what futures transaction you wish to conduct?" Reed inquired.
"I would like to know if it's possible to conduct this transaction on a leveraged basis?" Lin Haoran asked. "Of course," John Reed replied. "We can offer leverage of five to ten times, depending on the margin you deposit."
Lin Haoran's eyes lit up. He was very confident about the upcoming surge in gold prices. Hong Kong's stock market didn't allow leveraged investments, but here, he could use leverage on the futures market — no wonder New York was the world's top financial center.
This way, he could retain some liquidity for other investments. "I plan to invest in gold futures. Mr. Reed, you must know that gold's recent trend has been very bullish. I'm very optimistic about the future of the gold market. However, I have a concern: how large an investment would start influencing the gold futures market?" Lin Haoran asked.
"Mr. Lin," Reed explained patiently, "the gold futures market is massive. Since 1976, gold prices have been steadily rising. As of May this year, the pace of increase has accelerated, and trading volumes have soared. Our experts estimate that global gold futures trading now exceeds 100 trillion ounces annually. Just at the New York Mercantile Exchange alone, monthly trading exceeds 6.5 million contracts. It's a massive market. In my opinion, investments under 500 million dollars, handled through our operations, would not significantly impact the market. Beyond that amount, there could be some effect," Reed analyzed.
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