Oct

13

 A diamond ETF appears to be in the works. Prices are down a bit at the moment. A "One Quadrillion dollar" Russian diamond story that went viral is reassessed by a specialist. A "diamond planet" makes the news. F. Scott Fitzgerald's story "The Diamond as Big as the Ritz" is mentioned.

1)

FactorShares, the ETF issuer known for its suite of spread products, has filed plans with the Securities and Exchange Commission (SEC) to possibly introduce an ETF that tracks companies engaged in the exploration, production and sale of diamonds. The fund could debut as early as the fourth quarter.

2)

Diamond prices are on the slide again, as macro economic gloom continues. The Rapaport Diamond Trade Index, which is derived from the average asking price for the top 25 best-quality one-carat diamonds and is seen a global benchmark, fell to $9,391 last week….

…However, the long-term trend looks positive. Worldwide demand for rough diamonds may climb more than 6pc between 2010 and 2020, according to consultants Bain & Co. This is higher that the expected growth in diamond supply.

3)

Those in the diamond world were shocked. "Holy s—", is how Dustin Chalchinsky, a geological specialist for Eurostar Belgium, one of world's top loose gem companies, decribed his reaction. "This can't be real. This is almost science fiction.

Chalchinsky went on to write a comment on Reddit that explaining just how unlikely the asteroid scenario was. "It seems extraordinarily unlikely," Chalchinsky told Business Insider in a phone interview. "But extraordinarily unlikely things do happen.

4)

Orbiting a star that is visible to the naked eye, astronomers have discovered a planet twice the size of our own made largely out of diamond.

The rocky planet, called '55 Cancri e', orbits a sun-like star in the constellation of Cancer and is moving so fast that a year there lasts a mere 18 hours.

5) From Wiki on Fitzgerald's story:

Washington immediately finds himself in a quandary; the value of diamonds multiplied by the sheer number available for him to mine would make him the richest man ever to live, but, based on the economic law of supply, the sheer number of diamonds, if ever discovered by outsiders, would drive their value to near zero, thus making him a pauper.

David Lillienfeld writes:

The problem with diamonds these days is that DeBeers no longer controls the market, so there's no basis for assuming any sort of price stability. The Russians can flood the market at will, and may choose to do so to raise money if oil prices decline. Whether there's more diamond to be found in Canada is any one's guess, so there is the possibility of additional supply hitting the market from up north, never mind that machine made diamonds are close to marketing, too. (Did you know that one can take the ashes from a cremated loved one and have them placed inside of a man made diamond?) And of course, there's the demand side of the equation–I don't see developing countries having the same demand for diamonds that they do for gold. So while Bain may want to think that diamonds will increase through 2020, I don't see any basis for that contention. It does make for some nice dreams, though.


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