NEW YORK (TIP): The Royal Bank of Scotland reportedly has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.

The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008, the UK Telegraph explains.

“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, also known as RBS, said in a client note.

“Andrew Roberts, the bank’s research chief for European economics and rates, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs,” Ambrose Evans-Pritchard reported.

Roberts said the bank’s red flags for 2016 — falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans and deflation — had all been seen in just the first week of trading. “We think investors should be afraid,” Roberts said.

RBS also said if oil falls below $30, then $16 is on the horizon, CNN Money added.

RBS compares the market mood with that of 2008 before the collapse of Lehman Brothers and the start of the global financial crisis.

At least then, emerging markets were there to save the world from complete collapse.

China can’t save the world this time around, let alone any other big emerging market. RBS remains “deeply skeptical” that Chinese authorities can right the ship any time soon. It warns that without allowing a massive devaluation of its currency — around 20% — China can be of no help.

RBS believes China suffered a massive outflow of capital in December — perhaps as much as $170 billion — with much of that money going straight into the dollar.

This latest warning follows on from an incredibly bearish outlook for 2016 that Roberts’ team issued late last year, Business Insider reminds us. At that time, Roberts said there are “a number of bad headwinds affecting the world right now, which will worsen in 2016” and that this means RBS is wary of “mostly everything except high-quality 5-10 year government bonds.”