By Charles Wyndham.
There is a curious hiatus hanging over the diamond business at the moment, but then it could be said that there is a hiatus hanging over the whole world’s financial situation.
The news that after a record break of nearly two years that Belgium might be getting itself a new government, may be good or bad, that is if it is news in the first place.
My inclination is to think that things were probably best left where they were.
The whole euro zone fandango gets ever more out of hand as now the logic of the situation is that Germany itself might be threatened with a downgrade by the rating agencies.
I have some sympathy with those in the EU for whom I usually have little to no sympathy, complaining about the extraordinary impact of that rating agencies, that is the same agencies who contributed so successfully to the sub prime aberration in America.
I suppose the point is that the EU politicians have ended up doing an even better job of creating ‘calculated incoherence’, a term I read some academic charlatan used in reference to the paintings of Pollock and whatever the school of painting is called, than the rating agencies.
In diamonds we are waiting to see what the change in ownership of De Beers is going to mean in practice, but it must not be forgotten that this change will not become effective till the second half of next year.
In the interim we are waiting to see what changes the new MD of De Beers, brought in by the outgoing Oppenheimers, is going to trigger.
It might be that there will be status quo till the Oppenheimers actually leave the building, no doubt in an orgy of sentimental twaddle punctuated by some gala events.
I might suggest that the Oppenheimers follow the fate that befell Monty Charles and Teddy Dawe when they left De Beers and had a party at the British Museum which soon got the soubriquet of the ‘Fossil Party’.
The difference was that Dawe and Charles actually made money for the company.
Again, the other party for Charles and Dawe was held at the Big Hole in Kimberley... thinking about it that might be more appropriate.
There does however appear to be a consensus even among the sightholders to whom I have spoken that things really are going to change.
But what does ‘change’ mean?
The new management / owners of De Beers are going to have to find a way where they maximise the price of the rough, they cannot go on either giving it away or forcing it down peoples’ throats when the market turns.
At the same time a sudden and total switch to an efficient marketing system will spell disaster for one and all especially in a time of financial stringency.
So the key is going to be firstly identifying how they want to sell the diamonds and secondly how to manage the change to that system which provides enough oxygen for those working in the current system to be able to survive and flourish (well some of them) under whatever new system they choose.
It will be interesting to see what choices are made and just as importantly how they are implemented.
It is going to be a difficult balance to strike, but anything must be better than clinging to the Oppenheimer heritage.
Bonne chance is what I say and as a warning I would refer them to the blurb on a can of insect repellent in Botswana, ‘Instant success, Lasting death’.