Massive policy shift likely in US/EU/Japan in 2016

If deflation & inequality intensified by recession, investors should anticipate massive policy shift in 2016 in US/EU/Japan from QE to fiscal stimulus and in China from fiscal stimulus to QE & FX depreciation; positive for TIPS/gold/commodities, for Main Street not Wall Street plays, and for Chinese small cap, assets that bears should accumulate using cash if markets head to new lows.

U.S. municipal bond issuance for capital spending on transportation, infrastructure and state spending in 2015 running at lowest level since 1997. Sell bonds into strength: in a year of commodity collapse, "flash crashes", manufacturing recession, default fear in resources & EM, breakeven inflation rates down to lowest levels since 2009 total return from global fixed income is -1.3%. 

Only if Q3 was the trough in global growth & Fed can hike rates because macro improves and US$ does not rally (so no EM/commodity rout & EPS better). Big ask but note small cap stocks in both Europe & Japan have broken out. Q3 was not the trough and investors rebel against further ECB & BoJ QE, says BofAML.