1. Behold the “negative basis trade,” per John Dizard: “You can own a corporate bond, or emerging market sovereign bond, buy default protection on the paper with CDS, and collect interest payments for taking no risk. That’s right: because CDS prices are depressed, relative to the comparable bonds, you can collect money for taking no risk.”
  2. Per Riccardo Barbieri of BofA-Merrill Lynch, “as long as [oil] prices rise only moderately from here – say, revisiting the $80 a barrel level by year-end, this would not pose severe risks for the advanced economies, while the emerging ones would be able to tolerate even higher levels, say, $100, in due course.”
  3. David Pilling notes that “Vietnamese exports have been fairly resilient. While economies such as Singapore and Taiwan have seen declines of 30 or 40 per cent in shipments, Vietnam was down a modest 3.7 per cent in the first four months of this year against the same period in 2008.  Economists think Vietnam might be benefiting from a new Wal-Mart effect by which western consumers switch from expensive branded products to cheaper goods in which countries such as Vietnam excel.  Last month, the port at Ho Chi Minh City was so busy it was backed up with ships. ‘They’re not producing i-Pods and laptops; they’re producing T-shirts and shoes,’ says Jonathan Pinkus of Harvard University’s Kennedy School of Government.”