Luxist Report: Diamond cartel tries to pull an OPEC

When the global economic crisis set in, few segments of the luxury market took it harder than jewelry. Big brands have been laid low and some fairly major retailers, including Fortunoff, Whitehall and Robbins Brothers have filed for bankruptcy. And hit hardest of all has been the diamond industry. While prices for gold (as is typical during uncertain times) have been on an upswing the past few months, diamonds prices have fallen steadily -- even precipitously.

The response from the diamond producers has been to take the well-trod path of cutting supply. De Beers has instituted work stoppages at some mines and reduced exploration projects in Africa and Canada. With fewer rough stones coming out of the mines, the ripple effect has spread to the diamond-cutting and -polishing centers in India. Some estimates say that as many as 500,000 diamond workers have lost their jobs. Many in the industry are wondering what happens next.