The Royal Bank of Scotland (RBS) are advising investors to brace themselves for a “cataclysmic year”, warning that stock markets are likely to crash and oil prices will dip to $16 USD per barrel. The banks credit team have warned clients that the markets appear to be flashing similar “stress alerts” that preceded the Lehman crisis in 2008, advising clients to “sell everything”. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” the bank told clients. Smh.com.au reports: Andrew Roberts, the bank’s credit chief, said both global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings, and uncharted waters given that debt ratios have reached record highs. “China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the ‘Goldilocks’ love-in of the last two years,” he said. Mr Roberts expects Wall Street and European stocks to fall by 10pc to 20pc, with an even deeper slide for the FTSE-100 thanks to its high weighting of energy and commodities. “London is vulnerable to [...]