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Shmuck’s Ville

By chance I happened to see a short series of what I would call podcasts on the BBC entitled ‘The Life of Luxury.’

I looked at two of them, one centered on Dior and the other Bulgari.

One reason for watching them was that neither was longer than a couple of minutes or so, and therefore in my attention span capacity.

To me, the very term ‘luxury’ has become rather debased and these brief pieces on the BBC of all places to discuss such a topic only confirmed the point to me.

As I have pointed before, any visit to an airport elicits ennui at the same branded ‘luxury’ shops, if you can so readily access something I think that it is then difficult to define it as ‘luxury’.

Anyway what struck me about these podcasts was that in the intro there was the picture of a yellow diamond and an ugly watch encrusted in diamonds.

So diamonds it would seem still retain their claim to fame as one of the ultimate luxuries, well certainly for the BBC.

This contrasts somewhat with what I saw wondering down the Bahnhofstrasse in Zurich the other day, where I spied splattered across one of the ‘luxury’ shops specialising in jewellery in this street of über luxury, ’Sonderverkauf Schmuck 40-60%’.

It caught my eye because ‘schmuck’ has a particular meaning to me and not the meaning I was told was the case in Swiss German of a ‘sale’.

I thought that my pejorative meaning actually was more relevant given such a statement in such a place doing more to make a schmuck out of all of those who continue to insist that diamonds are something so terribly special and not the commodity that they really are.

The only thing that is becoming special about diamonds is the bad news stories emanating from the industry.

The latest is the bankruptcy of Exelco in Antwerp for some crazy sum of money in the order of over $50 million, with a couple of banks carrying around $20 to $25 million each.

Attempts by one bank to grab whatever it could of the demised company’s stock has run into legal impediments in Antwerp, which apart from anything else must add salt into the wound of the bank.

My own experience of legal proceedings in Antwerp are that they are more biased or flexible in favour of the indigenous inhabitants than even is the case in those various countries in Africa where I have had experience.

The model that the diamond industry has clung onto through the gritted teeth of an aging ‘gentleman’s’ club has become totally toxic.

Everyone in the industry knows that the fate of Exelco is merely the tip of an iceberg, much much bigger problems overhang the market, but it is simply not in the interests of those directly affected to pull the plug, so to speak.

I will pass over the fact that when I looked up on the De Beers website Exelco was listed as a DTC sightholder and the fact, I was told, was still claimed on its own website.

I have been unable to verify the fact myself as when I went to the website I was told it was ‘under construction’.

An article by Bloomberg reporting on this pointed out that earlier this year the company had lost its status as a sightholder and had been downgraded to an accredited buyer, not something that it would appear anyone was keen to actually tell anyone else about.

The reality is one of complete unreality. Financing for the industry is drying up faster than any drought can take full effect even in Africa.

Who in their right mind would or should be willing to lend to an industry so immersed in such palpably archaic and deliberately disingenuous modes of practice?

It must raise serious questions about the motivation for much of the lending itself.

So now we have an industry, which insists that it is ‘special’, it is not a commodity business, but is a luxury with undertones of stored value being thrown onto the public as some discounted can of baked beans and which banks are treating with all the care anyone would reserve for a pot of radioactive waste.

Schmuck’s Ville.

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