Reuters

All you need to read and some more.

Gold’s London AM fix this morning was USD 1,661.25, EUR 1,253.02, and GBP 1,024.70 per ounce. Yesterday's AM fix was USD 1,662.50, EUR 1,256.61 and GBP 1,021.44 per ounce.

Silver is trading at $30.85/oz, €23.37/oz and £19.10/oz. Platinum is trading at $1,570.00/oz, palladium at $677.60/oz and rhodium at $1,350/oz.

Just when we thought the president didn't have any tricks left up his pre-election sleeve on the anniversary of Osama's death announcement, here he comes and surprises everyone with what has just been disclosed as a secret visit to Afghanistan, where in a televised statement at 7:30 pm Eastern, the president will announce a strategic partnership with president Karzai, and where he will designate Afghanistan a major non-Nato ally - the "first such designation of the Obama presidency."

Two weeks ago, when reporting on Chesapeake's most recent legal problem in the aftermath of the Reuters report on McClendon's private well deal, we explicitly said: "to all those scrambling to short the company: beware. CHK has a history of being able to fund itself with HY bonds come hell or high water. If and when the stock tanks, the short interest will surge on expectations of a funding shortfall. Alas, courtesy of the Fed's malevolent capital misallocation enabling, we are more than confident that the firm will be able to issue as much HY debt (unsustainably at 10%+, but that is irrelevant for the short-term) as it needs, crushing all short theses. What this means, simply, is that anyone who believes traditional fundamental analysis will and should work in the CHK case is likely to get burned, especially if China is involved which will have its own tactics vis-a-vis the future of McClendon and/or CHK. And all, of course, courtesy of the Chairman of course." Sure enough, we just got confirmation of what happens when a company that everyone has left for dead gets a bit of good news, in the form that CHK has ended the wells deal and is looking for a new chairman: the stock explodes, as it has this morning when it is now nearly 10% higher in the pre market. That, and the fact that everyone and their grandmother is short, also doesn't help.

As the runoff round of the French presidential election approaches, the only hope for Sarkozy who was trailing Hollande by a 9-10 point margin was that right winger Marine Le Pen would endorse his candidacy. If at all, she was expected to do so this morning. She did not. Instead, she told her followers to cast a blank vote, in essence cementing the fate of Sarkozy, and setting France and Germany on a big showdown over the fate of the fiscal union, and Europe's austerity. Of course, this is for the cameras. What happens behind is quite different, and usually coincides with the wishes of he, or in this case she, who pays the bills. Yet it was her assessment of the "choice" presented to the French people that was very much dead on: "Who out of Nicolas Sarkozy or Francois Hollande will be most subservient when carrying out austerity politics? Who will obey to the letter the orders of the troika: the IMF, ECB, European Commission?" It is he who shall be elected.

• Europe focus of global May Day labour protests (BBC)
• Occupy movement's May Day turnout seen as test for its future (Reuters)
• BofA to Cut From Elite Ranks, will fire 2000 (WSJ)
• Man Group Has $1 Billion Outflows; Shares Slide on Cash Concern (Bloomberg)
• Obama Fails to Stem Middle-Class Slide He Blamed on Bush (Bloomberg)
• Berlin insists on eurozone austerity (FT)
• This must be really good for AMZN's 1.5% operating profit margins: Microsoft muscles in on ebooks (FT)
• Ohio Union Fight Shakes Up Race (WSJ)
• How to Lose $7.8 Billion and Still Be Top of the Rich List (WSJ)
• Hollande Seen Bowing to Debt Crisis in Socialists’ Balancing Act (Bloomberg)
• BP profit falls as Gulf spill costs still weigh (Reuters)

In this case we really do hate to say we-told-you-so but our concerns over social unrest and the rise of extreme nationalism (here, here and here) in an austerity-focused and massively unemployed Europe appear to becoming ever more prescient. Just last week we saw extreme parties in France of all places receive high levels of votes and in a note today from BBC News, the leader of the Greek Socialist Pasok party, Mr. Creosote himself - Evangelos Venizelos, told a rally in Patras that voters should not allow neo-Nazis to "goose-step into Parliament with Hitler salutes". 

A month ago we chronicled what we consider one of the biggest problems for America's long-term viability in "No Country For Thin Men: 75% Of Americans To Be Obese By 2020" which goes straight to the heart of the biggest shortfall in America's balance sheet: the net present value of future spending associated with Medicare and various other healthcare related programs, which will sadly only rise as more and more Americans become morbidly obese, and demand more expensive health service out of the piggy bank that even now has tens of trillions in unfunded liabilities. And while the future is certainly not bright, the past and present are just as bleak. A Reuters report focuses on just how it is that America got to where it is today (most likely sitting in front a computer, eating potato chips and drinking sugar-laden soda): "The percentage of Americans who are obese (with a BMI of 30 or higher) has tripled since 1960, to 34 percent, while the incidence of extreme or "morbid" obesity (BMI above 40) has risen sixfold, to 6 percent. The percentage of overweight Americans (BMI of 25 to 29.9) has held steady: It was 34 percent in 2008 and 32 percent in 1961. What seems to have happened is that for every healthy-weight person who "graduated" into overweight, an overweight person graduated into obesity." Which is not surprising: with pink and white slime food substitutes (as an example) allowing more and more low income individuals to drown their sorrows in fat (aka high calorie dollar meals) it was only a matter of time. Sadly, there is nothing in the equation that indicates this is set to change any time soon, even as the all too real costs, to both the individual and to society, mount in an exponential manner.

As noted earlier, and in the aftermath of both the UK and Spain officially double dipping, very soon a majority of Europe will be submerged under the latest recessionary tide which has already engulfed Spain, UK, Greece, Italy,  Portugal, Ireland, Belgium, Denmark,  Holland, Czech Republic, and  Slovenia. The primary wildcard remains Germany, although there is a more than 50% chance that following some very weak PMI data, the country will follow up its already negative Q4 GDP print with another decline, officially pushing the European growth dynamo into recession as well (as for France which reps and warrants that everything is great, it is not as if anyone actually believes those numbers, especially after Hollande becomes president in one week). For everyone who wants to track the European double dip tsunami in real time, the following interactive chart from Reuters is just for you.

CFTC data from Friday showed that money managers cut long positions on Comex gold futures and options in the week ended April 24 to the lowest level in more than three years. Managed funds slashed 2,225 long positions, or bets prices will rise, and added 2,450 short positions, or bets prices will fall.  The managed-fund net long position was cut by 4% and now represents around 10.7 million troy ounces of gold. This took their net position down 4% to 107,600 long contracts, from 112,275 long contracts. That's the lowest in CFTC data since the week ended Jan. 20, 2009. The low in January 2009 corresponded with the low in the gold price for 2009 - monthly low of $807/oz - prior to seeing gains which saw the gold price rise more than 50% to above $1,200/oz in late November 2009 (see chart below). A similar price gain would see gold rise from $1,663/oz today to $2,494.50/oz in the coming months. Also of note is the fact that large commercial traders have greatly cut back their short positions in gold and especially in silver. This has often been a sign of a bottom and suggests that they do not expect gold and silver to fall much further. In Comex silver futures and options, these traders added 248 long contracts and 2,883 short contracts. This reduced their net long position by 20% to 10,756 contracts, from 13,390 contracts the previous week. The net silver position represents around 53.7 million troy ounces of silver.

• Only the cattle cars are missing: Greece opens detention camp for immigrants as election looms (Reuters)
• China really wants that Iran oil - China mulls guarantees for ships carrying Iran oil (Reuters)
• U.S. eyes testy China talks, Chen backer expects Chinese decision (Reuters, FT)
• Possible arsenic poisoning probed in death of coroner's official (LA Times)
• Europe’s Anti-Austerity Calls Mount as Elections Near (Bloomberg)
• Law firm Dewey dumps executive; talks with rival end (Reuters)
• Greek bank appeals for fresh equity (FT)
• Banks seek to put pressure on small rivals (FT)
• Obama falls short of meteoric expectations abroad (Reuters)

While Greece has had its fair-share of EURs funneled to it and through it over the course of the last year or two, it appears they have now created their first 'internal' bailout as things go from bad to worse. As Athens News reports, Greece will provide EUR250mm in emergency funds to its ailing electricity providers to prevent a California-style energy crisis. This liquidity injection to the country's power utlities was yet another unintended consequence of government intervention action. An increasing number of consumers stopped paying their electricity bills following the TROIKA's Greek government's infliction of EUR1.7bn property taxation via the electricity providers. The main power utility PPC had a liquidity hole blown through it as non-payments mounted and while regulators claimed the system needed at least EUR350mm to stay afloat, the government has agreed to allow PPC to hold EUR250mm of the property tax it has collected on behalf of the state until June 30 - by which time, it is hoped the utility will have managed to secure other lending facilities. Quite an incredible move - to force the electricity provider to gather the property taxes - and while this attempt clearly failed we suspect the next move will be food-and-water-rationing without proof of tax payment.

It must be difficult for the BRICS countries today. On one hand, they continue to jockey for respect among the Western powers, insisting on participating in quasi-European bailout funds like the IMF. On the other hand, they are also clearly aware of the Western nations' continuing efforts to surreptitiously devalue their domestic currencies, and the pernicious effect that has had on them as exporters and as lenders of capital. In that vein, it was interesting to note that during the latest BRICS Summit held this past March in New Delhi, the main topic of discussion centered on the creation of the group's first official institution, a so-called "BRICS Bank" that would fund development projects and infrastructure in developing nations. Although not openly discussed, reports suggest what they were really talking about was creating a type of BRICS central bank - an institution that could facilitate their ability to "do more business with each other in their local currencies, to help insulate from U.S. dollar fluctuations…" Given the incredible scale of western central bank intervention over the past six months, the BRICS' increasing frustration with their printing efforts should be a given by now. The real question is what they're doing about it, and what assets they're accumulating to protect themselves from the inevitable, which brings us to gold.

Better late than never. All you need to read. 

The Fed’s promise to use more QE should the economy falter is supporting gold.

The global economic picture remains grim, with euro zone economic sentiment falling more than

expected in April and the US job market recovery showing signs of a slowdown.

Apple earnings and the tech boom and indeed possible tech bubble remains one of the primary

drivers of continuing irrational exuberance and risk appetite.

The poor and deteriorating economic backdrop is gold supportive.