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.” 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.” 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 ...

Neither gold nor silver did much of anything in Far East or European trading on Wednesday. A short, sharp rally into the London a.m. fix went nowhere, and there wasn’t any serious activity after that until the floor traders on the Comex went to work yesterday. Gold tacked on $10 in about two hours time, but once the London p.m. fix was in at 10:00 a.m. New York time, that was it for both metals. Volume was very light…only around 69,000 contracts…net of switches.

Tuesday’s open interest numbers were underwhelming, as volume was very light on Tuesday as well. Gold open interest dropped a mere 1,227 contracts…and silver o.i. was down a minuscule 48 contracts.

What I mentioned might happen yesterday never materialized. All in all, Wednesday was a big zero in the gold and silver market. It was nice to see the precious metals stocks eke out a gain despite how

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