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Remember when the oil crash was supposed to be "unequivocally good" for the global economy and the US consumer, only for this to be disproven as the biggest macroeconomic lie since "QE is good for the people"? We do - quite vividly - which is why in December of last year we presented "150 Billion Reasons Why Low Oil Prices Are Not Good For The Global Economy" and countless other articles subsequently explaining why the great oil collapse of 2014 (and 2015) is actually "unambiguously bad." It took the so-called experts the usual 6-8 months to catch up, and admit they were wrong or at least stay silent this time.
In fact, 10 months after our first exposition on the death of the Petrodollar, the massive upcoming reserve liquidation (read Treasury selling) that is about to be unleashed as a result of the soaring dollar and plunging price of oil, has finally become a topic du jour at such banks as Bank of America and Deutsche Bank, who have finally grasped that the great oil crash precipitated nothing short of the world's first Reverse QE episode in history as some $10 trillion in accumulated reserves start being sold.
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That, however, mostly impacts the uber-wealthy: those whose net worth is invested in financial assets which are about to be sold en masse by some of the world's biggest central banks. Where it hits much closer to home is when firms such as Houston based ConocoPhillips announce that the E&P giant is about to terminate 10%, or 1,800 people, of its global workforce, in the next several weeks as it copes with low oil prices.
As the Houston Chronicle's FuelFix blog writes, "Daren Beaudo, a company spokesman, confirmed that an internal communication was sent to employees earlier this week informing them of the upcoming staff reductions. Most of those affected workers will receive layoff notifications next month."
But don't worry: the greatly (fabricated) US jobs recovery myth will not be impaired: all these formerly highly-paid engineers, technicians, drillers and chemists will find minimum wage jobs flipping burgers at their local recently IPOed Shake Shack.
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FuelFix adds that "the largest portion of the job cuts will come from North America, he said, where the Houston oil producer drills for crude from the oil sands in northern Canada to the shale plays in South Texas. The firm will also trim about 1,000 core contractors from its workforce."
Beaudo said ConocoPhillips has informed employees, city and state agencies that more than 500 of the firm’s 3,750 employees in Houston will also be cut. In Canada, the firm is cutting 400 employees and 100 contractors.
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And just in case there is still any confusion about the real impact of the great oil crash, here is Conoco again warning it will certainly not be the last to engage in mass layoffs: “We’ll know more in the next several weeks as we work through our formal process,” Beaudo said in an emailed statement. “Our industry is undergoing a dramatic downturn, which has caused us to look at our future workforce needs. As we have assessed the implications of lower prices on our business, we’ve made the difficult decision that workforce reductions will be necessary.”
But before anyone panics and gets worried that while thousands are losing their jobs, there is a threat to the luxurious living standards of the 1% of Americans who alone benefit from the Fed's policies and corporate cash flow generosity, fear not: COP may be firing thousands, but at least the dividend is safe, for now.
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