Presidents Corner November 2011 - The Great Salamander

If you allow me, I'd like to talk once again about the state of the world's economy. But fear not, this is not going to be a boring lecture in economics. Instead of throwing numbers around, let me introduce you to some ancient mythology. And what a better place to start than the cradle of western civilization, Greece?

Consider the following as a modern fable: Upon finishing their customary afternoon Ouzo drink, the two Greek fishermen had a difficult decision at hand; they needed to act before the market opened in New York.

Should they vote to accept the bailout of Greece by the 20 wealthy nations, or should they turn a cold shoulder and refuse the bailout package? If they accept then the world might be saved from the approaching total economic meltdown, whereas if they refuse then the Dow Jones index and the NASDAQ will nosedive and lead the world to a new economic crisis – like never seen before.

The entire world was waiting for their decision, but Aristotle and Salamitos had a problem of their own and did not understand that everyone was depending on them. Their fisher net was torn and all of the fish were escaping through the hole back into the sea. Suddenly a call interrupted their efforts to salvage their lot. The payphone at the corner of the harbor was ringing and a powerful banker from Wall Street was on the line.

Jon Corzine, MF Global Holdings Inc. Chairman and CEO, was urging them over the phone: guys make up your mind, and don’t worry about the fisher net. I will buy you a new polyester net with a motorboat of your choice - just accept the bailout! 'Mensch', you are playing with fire. If you refuse then you have nothing- no net, no motorboat and your country is broke. I will file for the 8th largest bankruptcy in the history of the US bank Industry.

The decision was made, and following Bankruptcy, Jon Corzine had to resign from MF Global. How absurd does it sound that the health and wellbeing of the world's financial industry, was put in the hand of two Greek fishermen and whether they accepted or refused the bailout from the world wealthy nations?

The market is falling, yet just a few days after an impressionist painting by Auguste Clement was sold for 40 Million dollars. The world economy is about to collapse and people are spending 40 Mil for a painting?!?

Now let’s consider the Argyle Pink Diamond Tender………

Prices of Argyle pink diamonds are skyrocketing, and the chances of finding a nice pink stone, even at such high cost, is fading. Don't the buyers of paintings and important fancy color diamonds listen to the news about the impending end of all economies?

Pink Collection

I guess that like me, they hear the so-called "news,” but don’t necessarily take it at face value.

I recently had dinner with a head of a wealth management fund in London, who asked me "How do you see the world in 5 years down the road?" Since I was enjoying my crispy duck together with a fine glass of wine, my vision of the world was unfolding in optimistic terms. So I told him about the Salamander, the mythological lizard-like creature which is created from within seven years of fire. The blood of the salamander was believed to posses magic properties. If one succeeded in slaughtering the salamander, while it was still in the fire and then smeared its blood on his body, then one would become immune to fire.

People and countries who succeeded in withstanding seven years of beating, and succeeded in making money to restart their economy, are immune to any further pains. The flames cannot harm them anymore. 

And so my prediction is that 2012 will be The Year of America. The evil spirit which depressed the world will be buried. Companies and individuals are sitting on billions of dollars and they don't want to get upset any further, but to spend their money - and enjoy it as well. Just look at the signs - they are all around.

The smartest man around, Warren Buffett, is showing the way in which the world is going: Investing 5 Billion dollars in Bank of America and shortly after, put up another 10.7 Billion for the big blue IBM.

The same goes for the diamond industry: both Chow Tai Fook and Graff are planning to raise 1 Billion dollars to roll out their business in Asia. If you pass by the window of Graff at Bond St. in London, you'll see that the windows are full again with canary diamonds. Every second item is fancy colored jewelry.

This is the right time for spoiling yourself and enjoying your money. Forget about the Greek fisherman and go on with your life…the sun is just rising -but this time from the West.


Leibish Polnauer

President, LEIBISH

Popular Articles View more articles
Article Image

Savvy diamond collectors made their voice clear with fancy color diamonds at Phillips, the venerable auction house whose roots date to London in 1796.

Article Image

The best news I’ve heard in a long time from our industry is that Anglo American, the multinational British-based mining company, is considering a sale of

Article Image

Well, it was good while it lasted, or was it? The LGD party left a heap of collateral damage in its wake, to the consumer who was fed a promise that didn’t