Are you worried yet?

I will be off for the day visiting the Traders Expo in Ontario, CA. (http://www.tradersexpo.com/). Last year's expo in San Diego was something of a disappointment (for me), but it's a chance to see some old friends and swap lies about how fabulous we're all doing. Last year's focus was on robotic trading and FX, so I'll be interested to see how many of those outfits are still in business and what new offerings are coming down the pike.

In the meantime, my trading buddy and guru Dr. Carl Wyman sent me the following because he knows there's nothing I like better than heart palpitations and a good cold sweat.

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Stocks, Credit Slump Will Worsen, RBS's Janjuah Says (Update1)
By Alexis Xydias
June 18 (Bloomberg) -- The worst of the stock and credit market declines that began last year is yet to come as inflation accelerates and economic growth falters, according to a Royal Bank of Scotland Group Plc strategist.
Central bankers are ``in a dangerous corner'' where the chance of a ``major policy error has just super-spiked,'' Bob Janjuah, a London-based credit strategist at the U.K.'s second- largest bank, wrote in a report. Any stock rally in the next month ``will be the significant opportunity this year to get short stocks,'' he wrote in a report dated June 11.
The Standard & Poor's 500 Index may fall to 1,050, a 22 percent decline from current levels, Janjuah said. The cost of protecting bonds from default is likely to soar, pushing the benchmark Markit iTraxx Crossover Index of credit-default swaps on 50 European companies to a record 700 basis point from 473, the note said.
The S&P 500 dropped 12 percent from a record last June as writedowns stemming from the credit turmoil approached $400 billion. The index is down 3.5 percent this month after Federal Reserve and European Central Bank policy makers indicated interest rates may need to increase as the threat of inflation intensifies.
``Mid-July through to October is likely to be the most bearish period we will experience in the bear market,'' Janjuah wrote.
In a short sale, traders borrow stock to sell it, on expectations prices will fall. Europe's Dow Jones Stoxx 600 Index dropped 1.1 percent to 302.88 as of 1:43 p.m. in London today.
Default Expectations
ECB President Jean-Claude Trichet said June 5 the bank may raise the euro zone's benchmark rate next month to curb inflation, running at the fastest pace in 16 years. Four days later, Fed Chairman Ben S. Bernanke said policy makers will ``strongly resist'' a surge in inflation expectations.
Janjuah ``is talking about it happening in three months so we don't have to wait very long to see if he's right,'' said Malcolm White, who helps manage about $7 billion in fixed-income assets at Legal & General Investment Management in London. ``Inflation fears will limit central banks' ability to take steps to control the crisis. Corporate defaults are going to increase, it's inevitable.''
Banks led declines in European equity trading today, with RBS falling 3.7 percent to 232.25 pence ($4.54) in London. Barclays Plc lost 2.9 percent to 330.5 pence, and Fortis fell 3.8 percent to 13.25 euros ($20.52) in Amsterdam.