JPMorgan Chase

Hillary Clinton’s campaign is absolutely imploding right now. When people get desperate, they do desperate things, and the latest move by the Clinton campaign reeks of putrid, panicked desperation. Of course, it makes perfect sense that Hillary Clinton, JP Morgan and Bank of America would share the same strategist. After all, they are the exact same brand.

When we first wrote on the subject, there was considerable criticism as to the possibility that such a program would ever be attempted, let alone succeed. And, granted, it was so Orwellian that it was understandably seen as a crackpot idea. But since that time, the program has been developing extremely rapidly. In the last six months alone, it has become so visible that it has even garnered a name - "the War on Cash." Once complete, state wealth control will exist.

Another day, another plunge in The Baltic Dry Index, which just dropped a further 3.1% to 402 today - a new record low. While the index is driving headlines, under the surface, reality in the shipping (and shipbuilding) industry is a disaster. Total orders at Chinese shipyards tumbled 59% in the first 11 months of 2015, and as Bloomberg reports, with bulk ships accounting for 41.6% of Chinese shipyards’ $26.6 billion orderbook as of December, there is notably more pain to come, as one analyst warns "Chinese shipbuilders won’t be able to revive even if you try breathing some life into them."

While the list of "most hated buyside" stocks is at least actionable, not even we are sure what to do with the list of companies that are most hated by the sellside, besides perhaps revealing what it is.  So for all those wondering, here courtesy of Factset, is the list of 10 S&P500 companies with the highest percentage of Sell ratings.

My overriding theme and the central drama for the coming year is that unexpected events can take on greater importance as the Federal Reserve ends its near-decade-long Zero Interest Rate Policy. Consensus premises and forecasts will likely fall flat, in a rather spectacular manner. The low-conviction and directionless market that we saw in 2015 could become a no-conviction and very-much-directed market (i.e. one that's directed lower) in 2016. There will be no peace on earth in 2016, and our markets could lose a cushion of protection as valuations contract. (Just as "malinvestment" represented a key theme this year, we expect a compression of price-to-earnings ratios to serve as a big market driver in 2016.) In other words, we don't think 2016 will be fun.

Banks have finally woken up to the risk their billions in C&I loans issued to fund "financial engineering" are exposed to. The reaction: an unprecedented surge in loan collateralization, with the percent of total loans secured by collateral soaring by nearly 50% in the past quarter to a record 55.9%, the highest ever!

"Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates.” 2016 Democratic presidential candidate and Senator from Vermont Bernie Sanders said in an op-ed on Wednesday that a full independent audit of the Federal Reserve is necessary “to reign in Wall Street."

• Global Stocks Take Breather After Oil-Fueled Rally (WSJ)
• Junk Investors Evade the Trade (WSJ)
• How the Third Avenue Fund Melted Down (WSJ)
• Oil Traders Set to Pounce as U.S. Prepares to Lift Export Ban (BBG)
• JPMorgan Says Japan Inc. Must Prepare for Yen Below 100 a Dollar (BBG)

• Battered oil wins respite, lifts stocks (Reuters)
• Oil Halts Decline as Emerging Market Stocks Climb on China (BBG)
• Bonds Set to Beat Stocks Globally in 2015 After China Falters (BBG)
• SpaceX Falcon rocket nails safe landing in pivotal space feat (Reuters)
• China Leaders Flag More Stimulus After Top Economic Meeting (BBG)
• SEC to Retrench Case Against SAC’s Steven A. Cohen (WSJ)

Someone forgot to give the banks the memo that the Fed's first rate hike since 2006 was supposed to, at least on paper, benefit the savers of America and not so much the, well, banks.. Because the ink hadn't even dried on the Fed's statement and one after another banks revealed that they would promptly boost their Prime lending rate from the current benchmark of 3.25% to the new Fed Funds-implied prime rate of 3.50%.

First it was just junk, then investment grade bonds started getting whacked, then liquidity in the 10Y Treasury imploded, and now CLOs are getting hit: “The price declines are alarming and worrying," according to Rishad Ahluwalia, JPMorgan’s head of global CLO research.

Financial crises can happen quickly, like the bursting of the tech stock bubble in early 2000, or slowly, like the late-1980s junk bond bust. The shape of the crash depends mostly on the asset in question: Equities can plunge literally overnight, while bonds and bank loans can take a while to reach critical mass. China’s bursting bubble is of the second type. "If, as seems likely, the government has succeeded in getting funding to higher risk sectors by relaxing bond approvals," wrote Christopher Wood of brokerage CLSA in a recent note, "it is all rather scary, given the regulatory failures exposed by the A share boom-bust cycle."

Amid souring bets on Brazil and the general malaise across EM, PIMCO has been dethroned as the king of emerging market bonds. A fund run by Ireland-incorporated Stone Harbor has overtaken PIMCO's EM Local Bond Fund as the world's largest emerging market fixed income fund by AUM as rollercoaster bets on Brazil and the departure of both El-Erian and Gross weighs on investor sentiment.

• Security jitters drive European investors back to safe havens (Reuters)
• Global Anti-ISIS Alliance Begins to Emerge (WSJ)
• Merkel says cancelling soccer match was 'responsible' decision (Reuters)
• Paris attacker may have had accomplice on journey through Balkans (Reuters)
• Drop Assad demands if you want to unite against Islamic State: Russia to West (Reuters)
• Putin sets up commission to combat terrorism financing (Reuters)

• BOE Stays Cautious on Rate-Hike Timing as Inflation Outlook Cut (BBG)
• China Enters Bull Market (WSJ)
• Britain says Islamic State likely brought down Russian plane (Reuters)
• Dollar jumps as markets fix on December rate expectations (Reuters)
• Activist Investor Bill Ackman Plays Defense (WSJ)
• BOJ Survey Data Reveals Signs of Growing Inequality in Japan (BBG)
• UAW Warns of General Motors Strike If Workers Fail to Approve Contract (WSJ)