The wonderful thing about Exodus is its detachment from emotions and the headlines that sometimes sets a mood in the wrong direction. Often times the headlines can cause one to make foolhardy decisions.

This is rarely the case with Exodus.

On Friday, the shortest term duration of all of our algorithms, the 3 month, flagged a systemwide Oversold signal. This isn’t something that I deem actionable, but more of a canary in the coal mine. The 3 mo algorithm’s threshold score is now higher than the 36 mo, which is the principle algorithm by which the system relies upon. This is indicative of a stronger trending market. It also means, according to the recent stats, that over the past 3 months the market has rallied off these levels.

Moreover, a sundry of bullish upside ETFs ended the week oversold, also indicative of a market that may bounce in the interim.

My feelings are irrelevant in regards to these signals. I’m overtly bearish on markets, but keenly aware that markets ebb and flow and tend to trend upwards over time. I do believe these signals to be backward looking and lacking sufficient data points to make any strong opinions, one way or another.

In short, if you believe the market will continue to behave as it has over the past 3 months, this is the point where you buy. However, if you believe the tides have turned for the wor st and a malevolent storm of 10,000 hurricanes approaches, ignore these signals and wait for the principle 36 month algorithm to be triggered, before dipping into the markets on the long side.

If this doesn’t tell you everything you need to know about the legitimacy of Chinese listed companies in the United States, nothing will.

Chinese regulators are contemplating a move to bar Chinese ‘going private’ transactions and relisting their scams at home at what they view as excessive valuations.

They know the true nature of these scam artists, unlike our investment banks who willingly turn a blind eye.

Shares of many Chinese deal stocks unraveled last week, shedding billions in market cap. Over 40 companies have received buyout offers, valued at over $35 billion, with 75% of these deals open and pending. The biggest deal pending is QIHU at $9.3 billion.

The unraveling started on May 6 when the China Securities Regulatory Commission said that it’s studying the impact of companies seeking to relist domestically after withdrawing from overseas. The regulators are concerned the valuations estimated for some domestic backdoor listings are too high and could affect the stability of the stock market, according to the people familiar with matter. Policy makers also want to avoid encouraging more buyouts that could prompt capital outflows, the people said, asking not to be identified as the information is private.

Below is a table comparing the U.S.-listed Chinese companies with the largest differences between their share prices and buyout offers. The widening of the offer premium indicates increasing concern that the deals will complete.

Company Name Closing Price ($) Offer Price ($) Premium (%) Premium A Week Ago
China Information 1.20 4.43 269.17 216.43
21Vianet 13.66 23 68.37 23.26
Renren 2.5 4.2 68.00 37.70
Momo 11.68 18.9 61.82 29.63
KongZhong 5.50 8.56 55.64 24.24
YY 44.85 68.5 52.73 20.98
Trina Solar 7.94 11.6 46.10 31.52
Dangdang 5.49 7.812 42.30 19.27
iKang 17.98 25 39.04 17.65
AirMedia 4.32 6 38.89 25.19
Jumei 5.29 7 32.33 15.51
Autohome 24.80 31.5 27.02 11.78
Note: share prices are as of May 13.

It’s worth noting that Chinese regulators are actively trying to crack down on corruption, from their scam IPOs to food safety to casinos. However, as an American investor in these mystery wares, you should be alerted to these facts before diving in headlong. For the most part, China is still the Wild West, corrupted by an institutional and innate culture of thievery and corruption.

Buyers beware.

No one wants to own Yahoo, an unbelievable fact to behold inspite of its gigantic BABA windfall. Marissa Mayer is racing to sell the company, in an effort to lock in her golden parachute.

Apparently, Warren Buffett, a man who has eschewed the internet like the bubonic plague, is reportedly interested in backing Dan Gilbert aka   ‘Basketball Brains’ from Quicken Loans to buy the piece of shit.

Mayer and Co. will conduct a second round of bidding for the beleaguered company…cause the first round went so swimmingly.

The good times of March are over, assuredly. Data released this weekend are nothing less than disastrous for those embedded in the lie of a Chinese economic resurgence. Such a resurgence has led to sharp spikes in oil, copper and stocks. If we are to be slaves to the data and dog eating nation of China, all should reverse now.

Behold.

Growth in factory output cooled to 6 percent in April, the National Bureau of Statistics (NBS) said on Saturday, disappointing analysts who expected it to rise 6.5 percent on an annual basis after an increase of 6.8 percent the prior month.

China’s fixed-asset investment growth eased to 10.5 percent year-on-year in the January-April period, missing market expectations of 10.9 percent, and down from the first quarter’s 10.7 percent.

Fixed investment by private firms continued to slow, indicating private businesses remain skeptical of economic prospects. Investment by private firms rose 5.2 percent year-on-year in January-April, down from 5.7 percent growth in the first quarter.

Zhou Hao from Commerzbank Singapore said “It appears that all the engines suddenly lost momentum, and growth outlook has turned soft as well. At the end of the day, we have acknowledge (sic) that China is still struggling.”

In a related note, Reuters is reporting that Chinese government officials have sent ‘urgent messages’ to Chinese banks to clear up hurdles to providing them with lines of credit. This is an act of wanton desperation.

Chinese banks sharply cut new lending in April after a record first-quarter credit spree, much of which appeared to go to the state sector and may have helped inflate asset bubbles in real estate and commodities.

According to the document seen by Reuters, the China Banking Regulatory Commission (CBRC) is requiring financial institutions to conduct checks on their implementation of central government directives intended to make it easier for private firms to access bank credit.

It also tells them to work to resolve any problems in cases where lending support to private enterprise is insufficient, including small and micro-businesses.

The document requires institutions to report their implementation results to the regulator by May 20.

The CBRC did not respond to calls seeking comment from Reuters.

One of the people with direct knowledge of the order said the important part “is to implement State Council requests and notifications. The key points are areas where policy solutions have not been put into place, or measures have not been introduced, impacting private investment’s stable and sustainable growth.”

The Shanghai is unch and U.S. futs are flat. Noone gives a shit.

Over the next few weeks, the monopolists at Amazon will launch private label items, from nuts to detergents to coffee to diapers, under the brands Happy Belly, Wickedly Prime, Mama Bear etc.

This is a huge step, one obviously copied from major supermarket chains, that will boost margins and further Amazon’s goals to decimate and destroy all physical stores in favor of a virtual world.

To me, this is a huge affront across the bows of PG, CLX, CL and other household names. The entry of Amazon into this sector, via private labels, means that pricing power will be challenged for the manufacturers of consumer goods. Studies have shown that people don’t recognize the difference between private labels and professionally managed brands made by companies like Church and Dwight.

Typically, private labels retail for 25-40% less than branded labels and have proven to be very effective tools in re-negotiating better deals for retailers with manufacturers.

The clowns over at Moody’s downgraded the House of Saud’s credit rating this weekend, thanks to the price of crude slumping. Taking into account the high expenses of their harems and torture facilities, as well as operating the EPA inside of the United States, Moody’s believes their credit profile to be less than ideal.

While the government has ambitious and comprehensive plans to address the shock by diversifying its economic and fiscal base, those plans are at an early stage of development and their impact remains uncertain,”

It is not yet clear how this cumulative financing need will be met: while Saudi Arabia’s low levels of government debt at 5.8 percent of GDP in 2015 provide fiscal space, no medium-term funding strategy has yet been announced,” Moody’s pointed out.

It’s worth noting that the Obama administration, under the guise of global warming, has just passed new rules to punish American oil companies. This, of course, is a net positive for Saudi Barbaria and will help towards funding their freshly stocked harems, torture chambers, and global terrorist cells.

These are our great friends. We enable them with open eyes.

This is a story about a man, Jack, who was obsessed with a stock, which, eventually lead to his downfall.

He was in love with it. He fought for it and eventually died for it. In the end, Jack, gave everything for his investment, including his life. The love that he shared with his investment was entirely one sided, which was made abundantly clear when he was denied access to the floating door (spoiler alert!), a door that could’ve easily been shared, but was selfishly hogged by his bitch of an investment.

When the weather was balmy, she was exceedingly accommodative. However, once the storms came, self-preservation triumphed the childish notions of love, which enabled her to leave Jack in the icy waters without the comforts of a floating door.

This is a classic Wall Street tale, one that teaches those to remain emotionally detached from their investments, otherwise, you’ll end up in the arctic waters, destined for an icy demise.

I am opening up the lines for suggestions. Believe me, I am not without topics to discuss. There are many issues to touch upon, all to do with markets on the precipice of unparalleled disaster.

Nonetheless, the floor is yours. Try to set a nice negative tone for the week ahead.

Thanks

-Management

CEO of StockTwits, H. Lindzon, just completed an interview with Bloomberg, where he discussed this, that, and the other thing. None of which he said was important. What did stand out, however, was his black t-shirt, which was placed underneath a checkered button down shirt– a no-no amongst all of the fashion circles from Milan to San Fransicko.

Observe.

C

For those of you who are interested in seeing the black shirt in action, here is the entirety of his interview.

Harvard University just released compensation data for their former investment chief, Jane Mendillo, and it was somewhat underwhelming according to a sundry of morons who think the university is underpaying for talent.

Ms. Mendillo received $13.8 million in her last year of employment, which ended in 2014. Moreover, the top six gurus pm’s at the endowment were paid $50 million in 2014, in spite of the fact that performance has been lackluster.

Under Jane Mendillo, the school produced an average annual gain of 10.5%, which ranks second lowest amongst all Ivy League schools.

“It seems like they’re not paying the market price for talent,” said Ge Bai, an assistant professor of accounting at Washington and Lee University in Lexington, Virginia, who studies compensation at nonprofits. “They’re paying extremely high bonuses to get mediocre performance.”
Alternative Assets

Really?

In addition to running a very lackluster endowment, Mendillo is on the boards of Lazard, The Andrew Mellon Foundation and GM. With exception to Mellon, the other two boards pay their members $250k per annum.

I have no problem with people getting compensated for doing a good job. I’m not Bernie Sanders over here, crying for the underclass to rise up and takeover the upper class, which would, essentially, drive this country into the ground. However, paying someone a salary of almost $14 million for performance that could be achieved in an index fund is just silly. She’s not to blame, naturally. The University itself are the fools who negotiated such a bad deal (extra Trump).