GemThoughts

I was prepared to write my next big issue for 2015, number 5, but this week's news in the diamond business has diverted my attention.  Conditions have reached the boiling point, and the future is foggier than ever. Without repeating all the details that I assume most concerned people have already learned, let's look at the upshot.  (A well done update is this week's column by Edahn Golan, issued just before the latest twist.  Look at his column at http://edahngolan.com/how-sightholders-take-care-of-business-a-market-report/)  In essence, the pipeline is stuffed with diamonds.  Some sightholders have been borrowing to buy goods, but using cash flow from under-priced sales to fund investments in other, more profitable ventures.  But many of those ventures have turned sour, and there have been some bankruptcies.  Apparently, there are many dealers under great pressure, and the market is seizing up as there is fear about selling anyone.  While I do...

Everywhere we turn these days, we read about the weakness in jewelry retailing in the US.  The numbers are down vs last year, every month for the last six months, and there does not seem to be any reason to think the summer will be any better. We can, of course, see all this as the "canary in the mine."  Jewelry has frequently been described as the first to get hurt in a downturn, and the last to recover, being that such purchases are discretionary and remain low on a list of priorities, excepting in most cases for the purchase of an engagement ring. All that does not seem to ring true at this point.  Back in 2007, I began to hear many retailer say that there was something wrong.  After a few great years (2006 being the best) they saw business drop off sharply in mid-year.  I took that as a real warning, an early warning, and echoing the declines we saw with the recessions in the 1980's and again in 2001. This time, though, the country has been out of the...