

De Beers profits fall 92% - stuffthatmatter
http://www.ft.com/cms/s/0/89c46692-782e-11de-bb06-00144feabdc0.html?nclick_check=1

======
gruseom
This reminds me of a joke I heard a (scarily) long time ago: "You bring De
Beers, let's have apartheid."

Apart from their unparalleled success in protecting an artificially scarce
market for so many years, did you know that De Beers were the early geniuses
in product placement? Diamonds didn't use to be such a big deal. The romantic
association of diamonds with love and commitment (primarily for women) was a
marketing invention of De Beers. One way they did it was by paying to insert
scenes involving diamonds into Hollywood movies (in the 1940s, IIRC), such as
the heroine's friends telling her: "He gave you a ring without a diamond? The
cad!" Diamonds started popping up in climactic scenes of reconciliation and
inevitable marriage proposals.

I can't remember how I know this... it might have been in an old episode of
This American Life. The other thing that surprised me was that they were a
British company, not a South African one.

~~~
yalurker
I have to say, anything bad happening to De Beers is music to my ears. As
you've mentioned they run a cartel to sell worthless rocks at huge markups to
irrational consumers, but my real problem comes from the toll their actions
take on human lives in third world countries. The human rights violations of
the diamond industry are unparalleled.

I'd recommend everyone read up on "blood diamonds" or "conflict diamonds" as
well as the diamond market in general before ever purchasing a diamond for
jewelry.

~~~
die_sekte
Hey! Diamonds aren't worthless! One can make knives/scalpels/drills/… out of
them!

~~~
gchpaco
Diamonds are superb materials and are used every day in industrial processes
all over the world. None of these are gem quality nor does anybody give a
rat's arse about their diamond paste or diamond cutting wheel being pretty.

------
jbarciauskas
Can't feel too badly for these guys, they've been capitalizing on market
inefficiency (the bad kind, anti-competitive actions) for decades. For anyone
interested in the diamond industry, this Wired story from 2003 provides some
great insight into the cartel:
<http://www.wired.com/wired/archive/11.09/diamond.html>

~~~
absconditus
This article is also very good:

<http://www.theatlantic.com/doc/198202/diamond>

~~~
davidmathers
Ever since I read that article, maybe 10 years ago, I've been wondering "If
that's all true then why is it taking so long?"

------
jrockway
Wow, selling rocks with no actual value is no longer profitable? Who would
have thunk it! (This is like the Web 1.0 version of those "things" you can buy
your friends on Facebook. No actual value, they're just a row in the database,
but marketing and artificial scarcity makes people want to buy them. It
doesn't last, though, once people realize that your worthless shit is
worthless.)

------
growt
I first read that as 'Beer profits fall 92%' and was slightly worried.

(I know you're picky about houmorous comments here, but please don't vote me
down to -8)

~~~
rewind
I wouldn't be surprised if beer sales increase in a recession as people stay
home and drink more beer yet at a lesser overall cost than if they went out
and drank half as much in a restaurant or bar.

~~~
mahmud
Not just buying them. I know of two different IT people (in two continents no
less) who finally have the time to build their own little basement brewery :-)

There is something about programmers and DIY foods and beverages. A good
friend of mine also became an "urban farmer".

------
dawie
Bottom line: De Beers spent lots of money on 2 mines in Canada and now has
$1.5bn in debt, while demand for diamonds are at an all time low.

------
alanthonyc
...registration required to read...

~~~
andrewbadera
nah, just change false.html to true.html and chop off the redirect, like this:

[http://www.ft.com/cms/s/0/89c46692-782e-11de-
bb06-00144feabd...](http://www.ft.com/cms/s/0/89c46692-782e-11de-
bb06-00144feabdc0,Authorised=true.html?nclick_check=1)

~~~
dawie
One of the worst registration process I have had to go through. And you wonder
why Newspapers are so f!@#^&ed. Their article is not even well written!

Clever little hack to get by the registration!

~~~
skorgu
I paid for a year's subscription to the FT back when I had time in the
mornings to sit and read it. Nice and relaxing but I realized I got most of my
news via google reader anyway so knew most of the headlines before I opened
it.

Anyway I canceled my subscription. That was about a year and a half ago. I
still get a copy, every morning, without fail on my doorstep.

~~~
michaelfairley
You should tell them you're "on vacation" from now until forever. Saves paper
and keeps you from having to bother with disposing of it.

------
helveticaman
Creative destruction at its finest.

