Diamond traders and the rest of the industry woke up Friday morning to a major shock. At 6:00 A.M. the semi-official price list for the diamond industry, the Rapaport Diamond Report, was updated and all prices were lowered by about 5%. The diamond industry, known for its secrecy and behind-closed-doors transactions, suddenly found itself in the spotlight.

On Thursday evening, Martin Rapaport of the eponymous report told an industry crowd at the Ramat Gan Diamond Exchange that things will never be the same again, referring to the economic crisis. Rapaport said demand for diamonds has dropped and that prices are already falling around the world, including in Israel. He added that since many traders are trying to maintain their sales volume they are forced to lower prices.

The Rapaport Report is widely considered to be the most important price list for the diamond industry world-wide. While Rapaport may have tried to calm fears, the sudden 5% loss on paper in the value of everyone's merchandise did not sit well with the traders. This is a problem in particularly for those diamond traders who have used their gems as security for loans.