In an impassioned "State of the Diamond Industry" address, Rapaport Group Chairman Martin Rapaport said the jewelry industry cannot sell to people on credit anymore and also criticized members of the trade for not trading diamonds to keep prices from dropping.

Las Vegas--In his annual "State of the Diamond Industry" address, delivered on Monday morning during the JCK Las Vegas show, Rapaport Group Chairman Martin Rapaport gave an impassioned speech covering the good, the bad and the ugly about the current state of the diamond industry.

"I am very, very pissed off about some of the things going on in the market," he said.

In contrast to last year's State of the Diamond Industry address--in which Rapaport caught heat from audience members for increasing diamond prices on his Rap list as much as 25 percent just before the Las Vegas jewelry shows--this year's speech drew laughter and even applause from the audience.

One issue that seemed particularly well received was Rapaport's comments on credit memo, a hot-button topic in an industry that thrives on loaning goods out on memo but also has been hurt by the practice when stores file for bankruptcy.

"I'm going to blast the hell out of credit," Rapaport said before launching into his tirade. "It makes me want to throw up."

He said the jewelry industry simply cannot sell to people on credit anymore, and that diamonds at all levels of the trade must be sold to "real" buyers who actually have the money to pay for them.

"You need real people with real money," he said. "We can't memo our way out of the recession."

He called out the U.S. market specifically as being one that relies too heavily on credit to finance its jewelry trade.

"People in the jewelry industry in the United States of America don't seem to be willing to put their money on the line," he said.

He urged the industry to "just say no" to memo and encouraged dealers to sell diamonds for cash and simply avoid those who are not liquid enough to buy the stones.

"You don't have money, go screw yourself. That's the bottom line," Rapaport said, a statement that drew a hearty round of applause from the audience.

During his hour-and-half-long speech, Rapaport also criticized members of the trade for sitting on stones and not trading them to keep prices from dropping.

"Buy and sell, buy and sell, buy and sell, that's the business," he said. "Diamond prices going down is not the end of the world. Make money, focus on profits. That's the key to survival in these times."

Rapaport also remarked on where future demand for diamonds lies.

Demand in the U.S. market "stinks," while demand in India and China--two nations with large populations and a rapidly growing middle class--is "rocking and rolling," he said.

Diamond jewelry sales are down 11 percent in the United States, according to Rapaport, but up 3 percent and 5 percent in India and China, respectively.

"The new game in town is China and India," he said.

Overall, Rapaport said he views the current recession--which is impacting the diamond and jewelry industries just as it is impacting other trades--not as a crisis but rather as a new reality. He said it is bringing about a fundamental change in social, economic, political and generational values. He pointed to the election of Barack Obama, the first African-American president in the United States, as evidence of the changing times.

The diamond industry, he said, must learn to change with it--to figure out how to sell diamonds to a consumer whose mindset has shifted--or risk being left behind.

"It's not just about money," Rapaport said. "There's a shift in societal values."

The Rapaport Group is an international network of companies providing added-value services that support the development of free, fair and competitive global diamond markets. Established in 1978, the Rapaport Diamond Report is the primary source of diamond prices and market information. For more information about the company, visit Rapaport.com.