1/ In @RayDalio's perspective, we are at the very late stages of the long term debt cycle. These long term debt cycles typically take 50-75 years to play out. This cycle began in 1945 when World War II ended and we began the US dollar-dominated world order.

2/ In the words of @RayDalio, "Right now, the world’s major central banks have the least fuel in their tanks since the late 1930s so are now in the later stages of the long-term debt cycle. Because they come along about once in a lifetime most people aren’t aware of them."
3/ Central banks have spent the last decade in a race to see who could devalue their currency the fastest. Near 0% interest rates have meant increased printing of the dollar, euro, and yen. Central banks no longer have the ability to tighten credit so they print money.
4/ Being towards the later stages of the long-term debt cycle there is a global sovereign debt bubble similar to what we saw in the 20's & 30's. In 2019, global debt-to-gdp hit 322% with total debt reaching a new all-time high of $253 Trillion.
5/ The wealth gap has also expanded to levels last seen in the 30's. Historically, inequality and large wealth gaps have eventually led to dire consequences. Periods of conflict and social unrest often marked by taxes, revolutions, or wars.
6/ As unrest spreads, the corporate media will find ways to get Americans to point the finger at one another. To divide us by race, religion, politics, class, etc. But it's important to remember that a broad systemic debt cycle lies beneath the surface of this social unrest.
7/ The years of anger & social unrest have only made their way onto the streets after decades of the bottom 300,000,000 Americans losing their wealth to the top 330,000 Americans. And after decades of CEO pay skyrocketing as fast as the homeless populations rose in LA & NY.
8/ In a capitalist society, this unrest manifest in mistrust of institutions which no longer serve the "common people"; government, media, banks, etc. The "common people" vote against the "elite establishment" thus you get the rise of Brexit & President @realDonaldTrump.
9/ Covid-19 stomped on the gas pedal of all of these systemic problems. The fed printed more money in three months ($4.3 Trillion) of covid-19 than it did in the seven years following the 2008 financial crisis. The wealthiest got even wealthier while the poorest got even poorer.
10/ The corporate media will turn us against one another while using the virus as a scapegoat. Remember, the virus did not make the debt bubble & we did not create social unrest. Nonetheless, as Americans, we are all in this same boat facing the end of this long-term debt cycle.

More from Kanekoa

*The Election Map*

There is overwhelming evidence of election fraud in all contested states. Therefore it is the duty of the Executive, Legislative, & Judicial branches to throw out the fraudulent votes & to honor their oath to protect & defend the Constitution of the USA.🇺🇸🦅



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1/ Trend Factor: Any Economic Gains from Using Information over Investment Horizons? (Han, Zhou, Zhu)

"A trend factor using multiple time lengths outperforms ST reversal, momentum, and LT reversal, which are based on the three price trends separately."


2/ This resembles combining multiple measures of ST reversal, momentum, and LT reversal (forecasts determined by walking forward rather than using signs from the full sample).

Unlike normal moving average signals, these are *cross-sectional.* More below:

3/ Unsurprisingly, the Trend factor formed by this approach outperforms benchmarks in terms of both Sharpe ratio and tail metrics. It's combining momentum with two factors that are negatively correlated to it AND using multiple specifications.

More here:

4/ "Average return and volatility of the trend factor are both higher in recession periods. However, the Sharpe ratio is virtually the same.

"Interestingly, all of the factors still have positive average returns.

"Momentum experiences the greatest increase in volatility."

5/ "In terms of maximum drawdown and the Calmar ratio, the trend factor performs the best.

"The trend factor is correlated with the short-term reversal factor (35%), long-term reversal factor (14%), and the market (20%) but is virtually uncorrelated with the momentum factor."

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