Sandra Navidi - SuperHubs - How the Financial Elite and Their Networks Rule our World

First published in the English language in 2017 by Nicholas Brealey Publishing

An Hachette company

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Copyright © Sandra Navidi 2016, 2017

The right of Sandra Navidi to be identified as the Author of the Work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means without the prior written permission of the publisher, nor be otherwise circulated in any form of binding or cover other than that in which it is published and without a similar condition being imposed on the subsequent purchaser.

Library of Congress Cataloging-in-Publication Data

Names: Navidi, Sandra, author.

Title: Superhubs: how the financial elite and their networks rule our world / Sandra Navidi; foreword by Nouriel Roubini. Other titles: Superhubs. English

Description: Boston, MA: Nicholas Brealey, 2017. | “First published as Super-hubs: Wie die Finanzelite und ihre Netzwerke die Welt regieren [copyright] Sandra Navidi 2016.”

Identifiers: LCCN 2016034403 (print) | LCCN 2016043460 (ebook) | ISBN 9781857886641 (hardback) | ISBN 9781857889796 (ebook)

Subjects: LCSH: International finance. | International economic relations. | Financial institutions, International. | Business networks. | Strategic alliances (Business) | BISAC: BUSINESS & ECONOMICS / Money & Monetary Policy.

Classification: LCC HG3881. N333513 2017 (print) | LCC HG3881 (ebook) | DDC 332/.042--dc23

LC record available at https://lccn.loc.gov/2016034403

Hardback ISBN 978-1-85788-664-1

Trade paperback ISBN 978-1-85788-665-8

U.S. eBook ISBN 978-1-85788-979-6

U.K. eBook ISBN 978-1-47364-511-0

Nicholas Brealey Publishing

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Nicholas Brealey Publishing

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Tel: (617) 523 3801

www.nicholasbrealey.com

www.beyond-global.com

Dedicated to

My Parents and Grandparents in Gratitude

Contents

Foreword

Introduction

Genesis

About This Book

The Financial Industry and the Power of Networks

Applying the Lens of Network Science: Systems Thinking

Crisis Alert

Author’s Note

CHAPTER 1

THE FINANCIAL UNIVERSE: AN INNATELY HUMAN SYSTEM

The Stratosphere of Power: Davos

The Orbit of the Financial Elite: The Gravitational Force of Networks

The Financial System: Applying the Lens of Network Science

The Human Factor: The Power of Personal Connections

Introduction: Meet the “Superhubs”

Fault Lines: The Fragility of Our Financial System

CHAPTER 2

SUPERHUBS: THE FINANCIAL ELITE AND THEIR NETWORKS

The Superhub Prototype: Hedge Fund Titan George Soros

A Blueprint for Networks: Nodes, Hubs, and Superhubs—Bankers, Executives, and CEOs

Financial Superhubs: Network Equals Networth

Network Geography: Location Matters

Location: Reputation Matters,

Reputation: Access Matters

Access: Social Capital Matters

CHAPTER 3

THE LINKS THAT CONNECT SUPERHUBS: MONEY, INFORMATION, AND OPPORTUNITIES

Network Nucleus: Larry Fink

Network Power: Money

The Printing Presses: Central Banks

Federal Reserve Chairman: In Charge of the World’s Reserve Currency

Central Bank of Central Banks: The Bank for International Settlements

A Primer on Banks: Regular and Shadow Banks

The Perpetual Crisis Manager: The International Monetary Fund

Network Currency: Information

The Influence of Personal Connections

Information Access and Proximity

The Benefit of Connections in Tumultuous Times

Thought Leaders—Superhubs of Valuable Information

Network Investments: Social Capital

Money + Information + Social Capital = Infinite Opportunities

CHAPTER 4

THE MATRIX: DECODING THE SUPERHUB DNA

The Alpha Personality: Jamie Dimon

EQ: Connecting Emotionally

Master Closers: Steve Schwarzman

Inquiring Minds

Inventing Ideologies

The Cult of Failure

CEOs—Chief Ego Officers: Bill Gross

On a Monomaniacal Mission: Ray Dalio

CHAPTER 5

HOMOPHILY: SIMILARITY BREEDS CONNECTION

The Charitable Superhub Network: The Robin Hood Gala

A Law of Nature: Why the Rich Get Richer

Global Conquest: The Transnational Financial Elite

Meeting of the Minds: Circle of Trust

The Hegemony of Homogeneity

The IQ Elite: A Master’s Degree in Networking

Network Plutocracy: “The Old Boys’ Club”

That’s Rich: Superhubs and Super-Riches

The “Flocking Effect”: The Superhub Habitat

CHAPTER 6

EXECUTIVE NETWORKING: RELATIONAL CAPITAL

The Superhub of Superhubs: Klaus Schwab

Friends with Benefits: Capital Networks = Network Capital

More an Art than a Science: Attraction + Interaction = Transaction

Digital Bits versus Human Touch

Beyond Networking: How to Win Friends and Influence People

The Alchemy of Chemistry: Charm Offensive

The Lords of Networks and Their Creations

Negative Notions on Networking

Think Tanks: Network Motherboards

INET: Connecting the Connected at Bretton Woods

CHAPTER 7

MEMBERS ONLY: THE EXCLUSIVE NETWORKING PLATFORMS OF THE GLOBAL SUPER-ELITE

A Dinner of Consequence: Attack on the Euro

Conspiracy Theories: An Explanation for Attempted Explanations

Why Networks Need Platforms: Connectivity

The Annual Power Circuit: Dispatch from Davos

The Global Financial Power Center: The International Monetary Fund

Washington, D.C.: The Financial Shadow Capital

IMF Meetings in Istanbul: Dancing on the Titanic

Power Summit: The Bilderberg Conference

Stealth Power: Family Office Gatherings

Feeding Off Power: Power Lunches

Power Workout: Networking, Working, and Working Out

“Superhub-Nobbing”: Private Parties

The Higher Purpose of Networking: The Charity Circuit

CHAPTER 8

OPPORTUNITY COSTS: THE DOWNSIDE OF THE UPSIDE

Missing Out on Memorable Moments

Stress Test: When Being a Superhub Is Not So Super

Married to Their Jobs: Work-Family Life Imbalance

Media Madness: Living Under a Microscope

Super-Sick: Paying the Ultimate Price

Clash of the Titans: Close Combat and Coups d’État

Triumph and Defeat: A Turbulent Career

CHAPTER 9

“WOMENOMICS”: THE MISSING LINK

The Gender Gap: Women Missing in Action

The Access Gap: Exclusive Means Excluding

The Networking Gap: Schmooze or Lose

The Assessment Gap: Performance versus Potential

The Wage Gap: Selling Women Short

The Failure Gap: Demoting Promotions

The Mentoring Gap: Missing Out on Mentoring

The Sexism Gap: The Wolves of Wall Street on the Prowl

The Resilience Gap: Male Might and Female Feebleness

Closing the Gender Gap: Superhub Christine Lagarde

CHAPTER 10

REVOLVING SUPERHUBS: CREATING NETWORK MONOPOLIES

Psychological Kidnapping

The Revolving Door

The Oscillating Megahub: Robert Rubin

Open Doors: Tony Blair

Cross-Connections: Cooperating Constructively in Times of Crises