Schlumberger
to cut 9,000 jobs on oil-price plunge - (www.cnbc.com) Schlumberger
Ltd, the world's No.1 oilfield services provider, said it will cut 9,000 jobs,
or about 7 percent of its workforce, as it focuses on controlling costs in
response to a continuing fall in oil prices. The company took an already
announced $1 billion charge in the fourth quarter related to the job cuts and
trimming of its seismic business. Schlumberger's customers—oil producers—have slashed capital
budgets and reduced the number of rigs amid a nearly 60 percent slump in oil
prices over the past six months. Analysts at Barclays said last week oil
companies could cut spending on exploration and production in North America by
30 percent or more this year if U.S. crude oil prices hovered around the
$50-$60 per barrel range. "In this uncertain environment, we continue to
focus on what we can control. We have already taken a number of actions to
restructure and resize our organization that has led us to record a number of
charges in the fourth quarter..." Chief Executive Paal Kibsgaard said.
North
Dakota rigs at 5-year low: Governor - (www.cnbc.com) Oil's
recent plunge has sent shockwaves around the world, especially affecting
oil-producing states. Jack Dalrymple, governor of North Dakota, told CNBC's
"Power Lunch"
on Thursday that oil production has been dramatically affected by oil's price
plummet. "About three months ago, the number of rigs in North Dakota was
195, today the number of rigs is 158," Dalrymple said. "That's the
lowest number of rigs since 2010." Dalrymple added that the drop in oil
could affect economic activity in the state. "It creates concern in the
level of economic activity in our state," he said. "Of course, that
impacts sales-tax revenues and income taxes eventually." The WTI and Brent crude prices have been slashed by about
50 percent each in the past three months, with both reaching six-year lows. While
the fall of oil prices could affect the state's employment numbers in the long
term, employment has not been dramatically hurt in the short term. "We had
such a backlog of job openings in North Dakota that, so far, employers are
having a better chance at filling those jobs," Dalrymple said. "I
don't think that's going to change in the short term."
2
FX Brokers Suffer "Significant Losses" After SNB Surprise, "In
Breach Of Regulatory Capital Requirements" – (www.zerohedge.com) In
a re-run of the catastrophic trading losses that occurred around the Russian
Ruble collapse last month (as we described here and here in great detail), two FX brokers (US-based FXCM and New
Zealand-based Excel Markets) announced tonight that they “can no longer meet
regulatory minimum capitalization requirements," due to "significant
losses" suffered by clients. For FXCM these losses mean a $225
million negative equity balance and they are actively discussing
alternatives with regulators. For Excel Markets, it is over... "we will
not be able to resume business...Client positions will be closed within the
next hour." FXCM an online provider of forex trading and related services
worldwide, announced today due to unprecedented volatility in EUR/CHF pair
after the Swiss National Bank announcement this morning, clients experienced
significant losses, generated negative equity balances owed to FXCM of
approximately $225 million. As a result of these debit balances, the company
may be in breach of some regulatory capital requirements. We are actively
discussing alternatives to return our capital to levels prior to today's events
and discussing the matter with our regulators. The broker's stock has
collapsed...
The
Greek Bank Runs Have Begun: Two Greek Banks Request Emergency Liquidity
Assistance - (www.zerohedge.com) The first time the phrase Emergency Liquidity
Assistance, or ELA, was used in the context of Greece was in August 2011, when Greece was imploding, when its banking
sector was on (and past) the verge of collapse, and just before the ECB had to
unleash a global coordinated bailout with other central banks including global
central bank liquidity swap and unleash the LTRO to preserve the Eurozone. As a
reminder, this is what happened back then: "In a move described as the "last
stand for Greek banks", the embattled country's central bank activated
Emergency Liquidity Assistance (ELA) for the first time on Wednesday
night." "Although it was done discreetly, news that Athens had opened
the fund filtered out and was one of the factors that rattled markets across
Europe. At one point Germany's Dax was down 4pc before it recovered. The ELA
was designed under European rules to allow national central banks to provide
liquidity for their own lenders when they run out of collateral of a quality
that can be used to trade with the ECB. It is an obscure tool that is supposed
to be temporary and one of the last resorts for indebted banks." Raoul
Ruparel of Open Europe told The Telegraph: "The activation of the
so-called ELA looks to be the last stand for Greek banks and suggests they are
running alarmingly short of quality collateral usually used to obtain
funding." He added: "This kicks off another huge round of nearly
worthless assets being shifted from the books of private banks onto books
backed by taxpayers. Combined with the purchases of Spanish and Italian bonds,
the already questionable balance sheet of the euro system is looking
increasingly risky." As a further reminder, this is how cryptically little the ECB has to say about its "last-ditch"
liquidity bailout program:
Casualties
From Swiss Shock Spread From New York to New Zealand - (www.bloomberg.com) Losses
mounted from the Swiss currency shock as the largest U.S. retail
foreign-exchange brokerage said client debts threatened its compliance with
capital rules and a New Zealand-based dealer went out of business. FXCM Inc.,
which handled a record $1.4 trillion of trades by individuals last quarter,
said clients owe $225 million on their accounts after theSwiss
National Bank’s
decision to abandon the franc’s cap against the euro roiled global markets.
Global Brokers NZ Ltd. said the impact on its business is forcing it to shut
down. “I would be astonished if we did not see more casualties,” Nick Parsons,
the London-based head of research for the U.K. and Europe at National Australia Bank Ltd., said by
phone from Sydney. “This was a 180-degree about turn by the SNB. People feel
hurt and betrayed.” Dealers in London at banks including Deutsche Bank AG, UBS
Group AG and Goldman Sachs Group Inc. battled to process orders yesterday when
the SNB surprised markets with its announcement on Thursday morning in Zurich.
The franc surged as much as 41 percent versus the euro, the biggest gain on
record, and climbed more than 15 percent against all of the more than 150
currencies tracked by Bloomberg.
Swiss
National Bank's Soft-Spoken Jordan Drops a Seismic Shock on Global Markets - (www.bloomberg.com)
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