In Hong Kong, we build a global business empire

Chapter 803 I object!
Meanwhile, on a conservative radio call-in program, the host roared in an inflammatory tone: "This is blatant invasion! The 'Pearl Harbor' of the financial world!"
What are the gentlemen on Capitol Hill waiting for? They must immediately strengthen scrutiny of these kinds of transactions to protect America's financial fortress!

Clearly, these proud Americans, especially those who are still immersed in the glorious old dream of the "American Century," have an almost instinctive wariness and rejection of any change that might challenge their established order and "purity."

In stark contrast to some native-born Americans who are immersed in the anxiety of "American fortresses," there is another large and unique group in the United States who are watching this financial feast far away on Manhattan Avenue with completely different feelings.

New York, Chinatown.

The afternoon sun shone through the slightly worn signs and onto the bustling street.

Kinmen Restaurant, Heji Restaurant, Guangchanglong Grocery Store, Dongfang Bookstore...

The televisions in many shops were switched to the live financial news channel.

When Lin Haoran shook hands with Walter Riston and received the board member's plaque symbolizing power and recognition, the Chinese people gathered in front of the screen erupted in an uncontrollable burst of excitement.

"See that? Lin Haoran! We Chinese! We Chinese can also enter the power center of Citibank, the core of Wall Street!" An elderly gentleman with white hair pointed at the TV screen in Mandarin with a heavy Cantonese accent, his fingers trembling slightly with excitement.

He has been running a restaurant on this street for over forty years, weathering many storms and deeply understanding the hardships faced by Chinese people climbing the social ladder in mainstream society.

"Incredible! Truly, the younger generation is to be feared! This is a historic breakthrough! It brings honor to us Chinese!" A fellow old man in a Tang suit laughed loudly.

For this generation of immigrants, the feeling of pride and triumph when they see their compatriots occupying a place in the once unattainable Western financial mecca is indescribable.

It wasn't just the older generation; young Chinese faces were equally excited.

Several young people working as junior analysts at a nearby financial institution gathered at a tea restaurant during their lunch break to watch the live stream.

"That's incredible! Lin Haoran has really broken through the ceiling, hasn't he?" A young Chinese man wearing black-rimmed glasses lowered his voice, but the excitement in his eyes was undisguised.

“We used to think that becoming a vice president was the limit, and the core management team wouldn’t even dare to dream of it. But now he’s an executive director, with real power!”

"It's not just the ceiling, he's put chairs for Chinese people right here in that 'board room.' Will this pave the way for those who come after him?"
"At least, will those white people look at us differently in the future?" another girl chimed in, her tone filled with longing.

This sense of pride is not limited to New York's Chinatown.

In San Francisco, Los Angeles, Chicago...

Wherever there are Chinese communities, Lin Haoran's name and his position at Citibank become hot topics of discussion, like a warm current conveying encouragement and hope in the Chinese community.

What they saw was not just the success of a business genius, but a symbol, a sign.

This symbolizes that the Chinese community is moving towards an unprecedented level of prominence and visibility in the American socio-economic sphere.

People were talking about it, regarding Lin Haoran as a symbolic figure of the rise in the status of Chinese people, and their tone was full of pride.

The capital market is always the most discerning touchstone.

On the New York Stock Exchange, Citigroup shares also experienced a dramatic turn of events after the official announcement of the appointment.

At the start of trading, the stock price immediately dropped by more than 3%, with a surge of selling pressure clearly reflecting the initial doubts and panic of some investors.

These American stock market investors instinctively reject the unknown non-American key decision-makers and speculate about the motives behind this complex transaction.

After all, it is hard for many Americans to understand why Citibank, a global financial giant and a symbol of pride in the American financial world, would choose to appoint a Chinese person who is not even an American citizen as an executive director, thus placing him in the core of Citibank's power.

In their view, Citibank's decision was undoubtedly a disastrous one, tarnishing Citibank's sacred status in the financial world.

However, a turning point came with Lin Haoran's performance at the press conference.

When he calmly and fluently explained his global perspective in English on live television, and defused sharp doubts with a clear logic and a grand vision, market sentiment began to subtly shift.

Following closely, major television and radio stations quickly followed up with in-depth analysis and reports on his legendary business resume.

The brilliance of this resume is enough to catch the eye of even the most demanding investors.

Shortly after graduating from London Business School, he entered the Hong Kong business world. In just a few years, he not only completed the acquisition of several local business giants, but also repeatedly won in his battles with established British trading companies such as Jardine Matheson.

His ability to accurately grasp global macroeconomic trends is even more astonishing. He stockpiled crude oil before the oil crisis, leveraged his position to go long on futures before the gold price surge, and most notably, he made a classic investment in Apple and cashed out after its IPO, reaping a return of over thirty times...

This series of actions, which resembled divine pronouncements, together paints a picture of a business genius with keen insight and decisive decision-making.

"Unbelievable, but if all of this is true, then his involvement would probably be more beneficial than harmful to Citigroup." In the trading hall, a fund manager muttered to himself as he looked at the scrolling news summary on the screen.

The market balance has completely tipped.

As Lin Haoran's image transformed from a "mysterious young Chinese man" to a "business genius with the Midas touch," Citibank's stock price began to recover, and buying gradually gained the upper hand.

Ultimately, by the close of trading, the stock price not only recovered all its losses but also bucked the trend with a slight increase of 3.5%.

This "√" shaped trend of falling and rising vividly illustrates the process of the capital market moving from skepticism to acceptance, and even to anticipation.

At this moment, many people who were previously puzzled as to why Citigroup was willing to pay such a high price, including why it acquired SITC Bank and granted core board seats, seemed to suddenly understand.

Any rational business entity knows how to choose between a powerful partner and a potential, formidable competitor.

Clearly, Citibank, under Walter Ristols' leadership, made a highly strategic decision.

What they need is not just the assets of Haifeng Bank, but also the enterprising business acumen, profound understanding of emerging markets, and almost legendary growth momentum represented by Lin Haoran himself.

They transformed a formidable rival who might have been a fierce competitor in the US market into a powerful partner in the same trench.

This deal was made with the right people in mind from the very beginning.

……

The commotion after the press conference still lingered in his ears, but Lin Haoran was not immersed in the joy of entering the core of this financial empire's power.

He knew, of course, that dealing with the media was more about posture and declarations; the real test lay in how to fully integrate into the small team on the Citibank board of directors.

In particular, he insisted on taking the position of executive director; it was not something that Citibank offered him voluntarily.

Therefore, many senior executives at Citibank must be dissatisfied and even resentful.

This afternoon, he will be attending his first formal meeting as an executive director: the Citibank quarterly executive director meeting.

This was also his first time stepping into the core command center that truly determines the course of the financial behemoth Citibank, in his capacity as an executive director of Citibank.

After the press conference, Walter Riston hosted a welcome banquet in a high-level lobby at Citibank.

The main purpose of the banquet was to allow Lin Haoran, the newly appointed executive director, to get to know other core management members of Citibank.

After lunch and a short rest at the hotel, Lin Haoran, accompanied by Li Guowei, once again entered the Citibank headquarters building.

Unlike the media frenzy at the morning press conference, the path leading to the top-floor boardroom was unusually quiet.

The thick carpet absorbed the sound of footsteps, and only occasionally, well-dressed senior employees who brushed past cast curious but restrained glances.

Li Guowei whispered a reminder: "Boss, according to the agenda, the afternoon meeting will mainly discuss three topics: a summary of global business in the first three quarters, an assessment of capital adequacy and risk management, and a strategic plan for dealing with the current US economic situation and potential market opportunities."

Lin Haoran nodded slightly, his gaze sweeping over the black-and-white photographs hanging on both sides of the corridor, documenting Citibank's century-long history, his eyes calm and unwavering.

2:50 p.m.

When Lin Haoran and Li Guowei, led by John Reed, entered a luxurious conference room in the Citibank Building, the conversation inside paused slightly.

Six or seven people were already seated around the long conference table. Apart from Chairman Walter Riston, whom I had met that morning, the others were all powerful executive directors of Citibank, with an average age of over fifty, typical of Wall Street's power elites.

Many of these people represent powerful conglomerates or independent interest groups.

Upon seeing him, Walter Riston immediately stood up and gave him a formulaic smile: "Mr. Lin, welcome to your first executive board meeting. Please have a seat."

He pointed to an empty seat at the back of the conference room, indicating that the seat belonged to Lin Haoran.

Lin Haoran calmly took his seat, while Li Guowei sat down in the audience seat to his side and quickly opened his notebook.

Soon, three or four more people entered the conference room. When they came in, they would first give Lin Haoran a scrutinizing look before returning to their seats.

When it was exactly three o'clock in the afternoon, the heavy door of the conference room was closed.

"Ladies and gentlemen, we are delighted to have a new partner with us at today's meeting. Let's give a warm round of applause to welcome our Chairman Lin!" Walter Riston, as chairman, took the lead in applauding immediately, with a professional smile on his face.

Sparse applause rang out in the conference room, clearly perfunctory.

Some directors even clapped their hands symbolically a couple of times before stopping, placing their hands crossed on the table and scrutinizing Lin Haoran with sharp eyes. Clearly, they weren't enthusiastic about Lin Haoran's addition as a Chinese-American; they were merely giving face to Vice President John Reed and Chairman Walter Riston to ultimately agree to the deal.

Li Guowei was somewhat indignant, feeling that these Citibank executives were showing no respect for his boss.

However, Lin Haoran was already mentally prepared. He knew that it would not be easy to get these proud Americans to completely accept him.

Unless he makes a contribution that they have no choice but to acknowledge, or demonstrates foresight far exceeding theirs at a crucial moment.

He had anticipated any slights or scrutiny beforehand, so he was not angry about it.

His expression was calm, even with a faint smile, as he nodded slightly to the directors present, seemingly oblivious to the meaning behind the sparse applause and scrutinizing gazes.

“Mr. Lin joined us during a crucial period of transformation at Citibank, and we believe his extensive business experience will bring fresh perspectives,” Walter Riston continued. “So, let’s begin today’s agenda.”

The first half of the meeting proceeded smoothly.

Department heads reported on their performance using charts and data, and discussed risk exposures. The atmosphere was professional, but somewhat dull for Lin Haoran.

Lin Haoran and Li Guowei mostly remained silent, listening attentively. Only when it came to business in the Asia-Pacific region did they occasionally raise one or two incisive questions, demonstrating their familiarity with the regional market. This made several directors, who had initially only paid polite attention to him, take notice.

However, he could still sense several unfriendly gazes.

Sitting opposite him was a director named Charles White, who was in charge of the commercial banking sector. From the moment Lin Haoran entered, he had not given him a friendly look, his eyes filled with undisguised scrutiny and a hint of rejection.

Another female director, Susan Lancaster, who was in charge of compliance and legal affairs, was better at managing her expressions, but the occasional glances she gave carried a sense of detachment and caution.

Lin Haoran understood that these reactions were perfectly normal.

It's understandable that a young person who "parachuted" in, especially a foreigner, would suddenly find himself in this core circle, potentially threatening the interests of some or simply triggering preconceived prejudices.

He is not in a hurry to defend himself or flatter others; recognition of value requires time and tangible results.

The meeting moved to its last and most important topic: the current economic situation in the United States and Citigroup's response strategy.

Richard Miller, a middle-aged man who was in charge of global markets, walked up to the projection screen and began to explain his analysis.

"Ladies and gentlemen, we are at a critical economic turning point. High inflation and economic stagnation have made the government and the people suffer greatly."

However, I believe that the dawn has broken! He pointed with his long stick to the outline of the new economic policy displayed on the screen.

"The series of policies implemented by President Reagan, which we will call 'Reaganomics' for the time being, are at the core a bold practice of supply-side economics!"
First, there will be massive tax cuts, with the highest marginal tax rate for personal income tax dropping from a staggering 70% to 28%, and the corporate tax rate falling from 46% to 33%! This will undoubtedly greatly stimulate investment and production!
At the same time, controlling the money supply to curb inflation, reducing government spending, and deregulating—this combination of measures will undoubtedly revitalize the US economic engine!

Miller became increasingly excited as he spoke: "The logic is very clear: tax cuts increase corporate and household income -> stimulate consumption and investment -> corporate profits rise -> economic recovery -> stock market surge!"

This is an inevitable cause-and-effect relationship. I believe we should immediately and decisively adjust our investment portfolio and increase our allocation to US stocks, especially to the manufacturing, financial, and consumer sectors that benefit the most from tax cuts!
This is an upcoming feast, and as an American financial giant, Citigroup must seize the initiative and secure the most advantageous position!

His views were endorsed or tacitly approved by the majority of the directors present.

One board member even echoed, "Richard's analysis is correct! Now is the time for greed, not fear. We should use our own funds and guide client funds to enter the stock market in a big way."

History will prove this to be a wise move.

Stock market investment is also one of the main sources of profit for Citibank, so there was an optimistic and eager atmosphere in the meeting room.

Even Riston and Reed nodded frequently, clearly leaning towards agreeing with this mainstream view based on their emotions and initial judgment.

Earlier this year, Reagan proposed an economic recovery plan to Congress that was the product of combining the economic theories of these two schools of thought, and it embodies the main content of Reaganomics.

The plan has four main points:

First, reduce government spending, especially social welfare spending, to reduce the fiscal deficit and achieve a balanced budget by 1984.

Second, large-scale tax cuts, including a significant reduction in personal income tax over three years and the implementation of a system to accelerate cost recovery for businesses, will provide tax incentives to enterprises.

Third, relax government restrictions on corporate rules and regulations to reduce government intervention in enterprises.

Fourth, we will strictly control the growth of the money supply and implement a stable monetary policy to curb inflation.

These policies have not yet been implemented, but the senior executives at Citibank know that this is not just talk, but a done deal, it's just a matter of time.

After all, as Citibank, one of the top ten financial groups in the United States, they know far more inside information than ordinary people!
This is why Richard Miller's optimistic analysis is so convincing, as if he could already see the stock market soaring after the policy was implemented.

However, Lin Haoran, who was sitting to the side, frowned slightly.

Miller's analysis sounded logically consistent and tempting, but as a time traveler, his memories of this history gave a completely different signal!

In his previous life, he had studied Reaganomics in detail during his university years.

He clearly remembers that the so-called "Reaganomics" did not immediately turn the tide in its early stages.

On the contrary, the tight monetary policy has led to high interest rates, coupled with market concerns about the huge fiscal deficit.

Shortly after the policy was implemented, the US stock market did not experience the expected surge, but instead suffered a significant decline, and the economy even fell into a deeper recession in the short term.

It wasn't until several years later, through a combination of factors, that the market truly emerged from the shadows and began a bull market.

If Citigroup rashly invests heavily at this moment, it may end up buying at the halfway point of a downturn, facing huge unrealized losses. This would undoubtedly be adding insult to injury for Citigroup, which has just completed a major acquisition and needs to stabilize its performance.

Just as the discussion was heating up and a unanimous decision was about to be reached, Lin Haoran suddenly raised his hand and said loudly, "I object!"

All eyes immediately turned to him.

Even Li Guowei looked at his boss with some surprise.

After all, this Hong Kong financial expert couldn't get a word in edgewise on such topics concerning US economic policy; he could only listen from the sidelines.

But the boss actually stood up and objected, and this happened during his first executive board meeting, when he was faced with almost unanimous optimism.

What courage and confidence that takes!
Walter Riston was somewhat surprised, but still nodded: "Mr. Lin, what are your thoughts?"

Lin Haoran stood up. He didn't look at the document on recent US economic policies on the conference table. Instead, his gaze calmly swept over each director present, finally settling on Richard Miller.

"Director Miller's analysis was brilliant, and the logic seemed impeccable," he began with a polite affirmation.

But then he changed the subject and continued, "However, please allow me to offer some different perspectives. I believe that concluding that the stock market is about to surge based on this 'perfect logic' and making large-scale, aggressive investments accordingly may be overly optimistic and even hide huge risks."

The meeting room fell silent immediately after these words were spoken; you could hear a pin drop.

Charles White let out a light snort without any politeness.

Lin Haoran remained unmoved and continued, "First of all, we have noticed the stimulating effect of tax cuts, but we may have underestimated their side effects and the complexity of their implementation."

Large-scale tax cuts will inevitably lead to a sharp decline in government revenue in the short term, while controlling the money supply and tightening monetary policy will keep interest rates high.

On one hand, there's the potential for a widening fiscal deficit; on the other, there are high interest rates. Will this combination ultimately benefit or harm businesses by increasing their financing costs and actual profitability? I believe a careful assessment is needed.

He paused, noticing the thoughtful expressions on the faces of the board members, and continued, "Secondly, market sentiment and expectations. Ladies and gentlemen, the market is not a completely rational machine. With inflation currently high, public and business confidence in the economic outlook has not truly recovered."

A new policy that has not yet been tested in practice will have a delayed effect. Before the real economic data shows a genuine and sustained improvement, the market may choose to vote with its feet due to concerns about deficits and high interest rates.

The stock market reflects expectations; when reality falls short of overly optimistic expectations, a correction is inevitable.

"Finally, I would like to draw your attention to a key indicator: interest rates! Will the Federal Reserve continue to maintain or even further raise interest rates in order to combat inflation?"
In a high-interest-rate environment, the increase in risk-free returns directly suppresses stock market valuations. Will funds flow to the stock market, where expected returns are uncertain, or to the stable government bond market? This is a question worth pondering.

He looked at Richard Miller: "Director Miller, the 'necessary causality' you mentioned may hold true in the long run, but financial markets often die from overconfidence in short-term judgments."

I believe that what Citigroup needs right now is not aggressive 'greed', but rather cautious 'observation' and 'defense'.

We should prioritize strengthening liquidity management and controlling risk exposure, and wait for clearer signals of policy effects and evidence of genuine market stabilization before considering increasing equity asset allocation.

The timing for a large-scale investment now may be far from ripe, therefore, I oppose Citibank's major foray into the stock market at this time.

Lin Haoran's voice echoed in the silent conference room.

Lin Haoran's speech was very clear and logical, directly addressing the core contradictions and potential risks of the early stages of "Reaganomics".

This differs from the global perspective he displayed at the press conference this morning; what he is showing now is a profound insight into the operating rules of the macroeconomy and financial markets.

(End of this chapter)